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How Hillary Turned Her Support for Welfare for Banks into an Auto Bailout Attack

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For a campaign that has spent days insisting Bernie Sanders should not launch attacks against her, the Hillary Clinton campaign sure engaged in some dishonest hackery last night.

During the debate in Flint, Hillary attacked Bernie for “vot[ing] against the money that ended up saving the auto industry.” She was talking about a January 15, 2009 attempt to withhold the second $350 billion of TARP funding that failed (here’s the resolution); Bernie voted not to release those funds. But the vote was not directly about auto bailout funding. It was about bailing out the banks and funding what turned out to be completely ineffective efforts to forestall foreclosures.

It is true that Bush’s failure to fund an auto-specific bailout meant that TARP funds got used to fund the $85 billion auto rescue (Bush had already spent some money on the auto companies — basically just enough to ensure they’d go under on Obama’s watch, but not enough to do anything to save them). But that’s not what the vote was (and there might have been enough money for the auto bailout in any case).

Larry Summers’ two letters in support of the additional funding (January 12, Janaury 15) in support of the additional funding certainly didn’t describe it as an auto bailout bill. He mentioned “auto” just three times between the two of them. In the January 12 letter, in support of auto loans to consumers, and in the January 15 letter, limits on what I believe is a reference to GM Finance (now Ally)’s Christmas holiday move to turn into a bank so it could access funding. Contemporary reporting on the vote also did not mention the auto bailout (though there had been discussion that it might be used the previous month).

Moreover, there had been an auto bailout vote in the Senate (on a bill already passed by the House) on December 11, which failed. Both Bernie and Hillary voted in support.

So while Hillary’s attack was technically correct — Bernie did vote against giving Jamie Dimon more free money, which had the side effect of voting against the second installment on the fund that would eventually become the auto bailout — he did not vote against the auto bailout.

But Hillary’s attack did its work, largely because national reporters appeared completely unaware that they were fighting about TARP much less aware that there had been votes in December that directly pertained to the auto bailout. Even some local reporters now appear unaware of what went down in 2008-9. John Podesta helped matters along by sowing confusion in post-debate speeches.

Here’s one of what will end up being several exceptions to the shitty reporting on this that will come too late for people to figure out what actually happened.

During the testy exchange over the auto bailout, Clinton called Sanders a “one-issue candidate” for voting against the release of $350 billion in Jan. 15, 2009, to continue funding the bailout of the nation’s banks and mortgage lenders.

Sanders joined seven Democratic senators in voting against the second wave of TARP funds. President Barack Obama ended up using some of TARP to fund the $85 billion rescue of GM, Chrysler and their auto lending arms.

“If everybody had voted the way he did, I believe the auto industry would have collapsed, taking 4 million jobs with it,” Clinton said.

[snip]

David Axelrod, a former top adviser to President Barack Obama, questioned Clinton’s attack on Sanders’ voting record in the middle of the debate.

“It wasn’t explicitly a vote about saving auto industry,” Axelrod wrote on Twitter.

U.S. Sen. Debbie Stabenow, a Clinton supporter, said after the debate that senators, including Sanders, were aware the TARP money would be used to aid the domestic auto industry.

“A lot of folks said we shouldn’t do it because somehow it was helping the banks,” said Stabenow, D-Lansing. “It was the auto bailout we were talking about. I was very clear with colleagues that we had to do this.”

Stabenow’s comment, incidentally, is proof that the money shouldn’t have been granted as it was (it wasn’t spent on auto companies until much later). While she’s right that there had been public discussion of spending some money on the auto bailout, there obviously was still so little limiting what the Executive could do with the money that there needed to be nothing explicit supporting the auto bailout to make it happen. The flimsiness of the guidelines is one of the things that enabled the Obama Administration to avoid providing real foreclosure relief, choosing instead to “foam the runway” for banks.

Don’t get me wrong. Bernie did a number of other things at the debate that hurt him last night, such as his comment about ghettos that suggested all African Americans are poor and no whites are. I think, too, the optics of his efforts to stop Hillary from interrupting him as well as his own gesticulating while she was making responses will go over poorly.

But the auto bailout attack was a pretty shameful ploy, one that otherwise would make it fair game to really hit on Hillary’s own actions in a way Bernie has not yet done. That said, it was also a probably perfectly timed attack, because it will ensure victory for Hillary on Tuesday, eliminating one of the last possibilities that Bernie might really challenge Hillary.

Update: As it turns out, Hillary should be attacking Stabenow according to her own standards, because Stabenow voted no on the first TARP vote that actually paid for the first tranche of funding to the auto companies. (Here’s the second, January 2009 one.)

The Democrats’ “Diversity Problem”

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There was a bit of a stink after Chuck Todd suggested the Democrats wish they had the diversity the GOP showed at the RNC this week. Josh Marshall said it was, “one of the stupidest things I’ve ever heard anyone say.” And then Marshall and Todd debated about it over Twitter. At which point Todd made it clear that he was reporting what the Obama campaign had said to him.

And this is reported material btw, not pundit speculation.

Marshall pointed out how diverse the Democratic party is.

Dude. Actually, let me rephrase that … DUDE. Black prez. 2 asian-am sens, 1 Hisp sen, black gov. (1/3)

2 huge caucuses of hispanic & af-am lawmakers in House, do u really believe the dems “had to go” to a red state to (2/3)

To which Todd repeatedly suggested that this came from the Obama Administration and claimed he was talking about “high profile” positions.

how many govs and senators do the dems have on this front? That was my point. High profile positions

ask the Obama campaign if they wish they had govs and sens as diverse as GOP right now.

Now, frankly, I think Chuck Todd’s problem–in this particular instance–is that he repeated what the Obama campaign said to him, rather than pointing out how crazy the Obama campaign is. It’s not just diversity they want, it’s the right kind of diversity.

Which brings me to the Sunday shows, which include the following lineups–which presumably were made with the significant input of the Obama Administration. (h/t Elliott)

ABC’s This Week:  White House senior adviser David Plouffe.

 

CBS’ Face the Nation:Gov. Martin O’Malley (D-MD), former New Mexico Gov. Bill Richardson and Obama Deputy Campaign Manager Stephanie Cutter.
 

CNN’s State of the Union: Los Angeles Mayor Antonio Villaraigosa, Gov. Bev Perdue (D-NC), and Gov. Martin O’Malley (D-MD). Then, Obama Senior Campaign Adviser Robert Gibbs. Senior Romney Campaign Adviser Eric Fehrnstrom.
 

Fox News Sunday:DNC Chair Los Angeles Mayor Antonio Villaraigosa, Obama Campaign Senior Advisor David Axelrod.
 

NBC’s Meet the Press:Chicago Mayor Rahm Emmanuel.

The Latino Mayor of Los Angeles, a tainted but Latino former Governor of New Mexico, lots of dickish top campaign advisors, dickish Rahm, Governor O’Malley (who’s been a superb campaign surrogate).

And just two women, one Stephanie Cutter appearance and one appearance from the Governor of the state hosting the Convention.

Not even DNC Chair Debbie Wasserman Schultz, who whatever else I might say about her is also a terrific media figure. Read more →

BREAKING! EXCLUSIVE! NYT’s Ambiguous Reporting Leads to Logical Conclusions

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I guess John Brennan has figured out that the effort to roll out the Steely Decider campaign has backfired.

How else to explain the almost unheard of tactic from the NYT of accusing those who drew very logical conclusions from its own article of engaging in gossip?

For example, the NYT complains that people read these passages:

This was the enemy, served up in the latest chart from the intelligence agencies: 15 Qaeda suspects in Yemen with Western ties. The mug shots and brief biographies resembled a high school yearbook layout. Several were Americans. Two were teenagers, including a girl who looked even younger than her 17 years.

[snip]

“How old are these people?” he asked, according to two officials present. “If they are starting to use children,” he said of Al Qaeda, “we are moving into a whole different phase.”

It was not a theoretical question: Mr. Obama has placed himself at the helm of a top secret “nominations” process to designate terrorists for kill or capture, of which the capture part has become largely theoretical. He had vowed to align the fight against Al Qaeda with American values; the chart, introducing people whose deaths he might soon be asked to order, underscored just what a moral and legal conundrum this could be.

And concluded that, “President Obama really add[ed] a 17-year-old girl to the counterterrorism “kill list.”

The NYT complains that people read this passage:

David Axelrod, the president’s closest political adviser, began showing up at the “Terror Tuesday” meetings, his unspeaking presence a visible reminder of what everyone understood: a successful attack would overwhelm the president’s other aspirations and achievements.

And concluded that “his political adviser, David Axelrod, really participate[d] in discussions of which terrorist suspects should be targeted in drone strikes.”

In its effort to suggest readers have drawn unfair conclusions from what I assume was NYT’s deliberately vague reporting, it clings to that very ambiguity (ambiguity, I’ll add, which made the article far more dramatic and therefore more widely read).

The article said that Mr. Obama knew he might be asked to add such terrorism suspects to the kill list — but it did not say he had been asked to do it in this case. Nor did it say that he had done so.

Ah, but the article also didn’t say he hadn’t done so, either, did it? So whose fault is it that readers drew precisely the conclusions that the narrative and emphasis of the article created?

The NYT is so intent on impugning those who drew very logical conclusions from its vague reporting that it made this laughably inaccurate claim:

On the left, too, there were thousands of posts with inaccurate claims about what The Times had reported. Many picked up what a blogger for the conspiracy-minded PrisonPlanet.com wrote on the day the article appeared: that The Times had said Mr. Obama had placed several Americans and a 17-year-old girl, all with alleged links to the branch of Al Qaeda in Yemen, on the kill list.

I’m not sure what is most offensive about this. That a newspaper complaining that readers drew inaccurate conclusions from its vague reporting made an inaccurate claim that a libertarian is a lefty? That, in an effort to impugn Alex Jones the NYT decided to label him as a lefty?

Or that neither here nor in the larger article did the NYT breathe one word of that American 16-year old who was killed in a drone strike, Abdulrahman al-Awlaki. Even if this particular 17-year old girl weren’t ever put on the kill list (though she may well have been–the NYT effectively commits a journalistic Glomar by neither confirming nor denying it here), an American teenager was, one whose death goes unmentioned.

I refrained from noting the following when I first wrote about this article, but this odd attempt to ensure the Steely Decider campaign doesn’t backfire makes it pertinent.

First, remember what Scott Shane said when he got called on letting a senior Administration official hide behind anonymity to insinuate those doing independent reporting on drone strikes were al Qaeda sympathizers?

Shane, in written responses to a number of questions that Nieman Watchdog posed to him about the two articles, said he believes this particular quote was not necessarily directed at BIJ, calling it “ambiguous, and I wish I had been able to clarify it.” He added: “Based on all my reporting over the last couple of years, I believe U.S. government officials have in mind not BIJ or other journalists as sympathizers of Al Qaeda but militants and perhaps ISI officers who supply what they consider disinformation on strikes to journalists.”

Apparently, he was helpless in the face of the ambiguity that allowed sources–probably the same one demanding he go back and counter the blowback from this article–to insinuate independent journalism amounted to helping terrorism. But now, he sees fit not to clear up his own ambiguities, but rather to attack those who drew fair conclusions from those ambiguities.

The story must always mean what is most convenient for John Brennan.

Then there’s this. The Administration is currently prosecuting John Kiriakou for leaking information about the torture program John Brennan once championed. The very core of their case–not to mention any pretense that the government didn’t use National Security Letters to get journalists’ sources to identify leads in this case–is a Scott Shane story for which, he said, he had two dozen sources. One of the very first things Kiriakou’s lawyer is going to do, I’d wager, is demand to know who the other 23 sources for the story are so he can prove that some of those people–people like Buzzy Krongard–knew that Deuce Martinez was involved in the torture and interrogation program.

Now, as a threshold matter, the fact that Shane might have been–and may well be–under DOJ surveillance for a leak investigation suggests that every source who spoke to him for the drone story would have heightened awareness of the risk of speaking out of turn. That sucks. It goes to the core of the problem of Obama’s war on leakers, not to mention their claimed authority to use NSLs to get journalist contact information in national security investigations. But because of this Administration’s decision to prosecute a guy who allegedly identified torturers, Scott Shane’s sources–at least those that say things the Administration doesn’t want out there, mind you–may be in a precarious position. Yet people spoke to Shane for this blockbuster article nevertheless.

Furthermore, Shane undoubtedly knows that the Kiriakou prosecution–particularly those 23 sources sitting between John Kiriakou and a fair trial–could get him in a bigger pickle than James Risen is currently in. This makes Shane’s awkward position even worse. DOJ may well get to decide whether to let Kiriakou go free or risk a judge allowing Kiriakou’s lawyer to demand a list of Shane’s sources from 2008.

Now, I’m not blaming Shane on this front. I’m just pointing out what kind of ancillary power the Administration gets from its leak investigations. It may well be that that’s not playing a part here at all. But I do think it worth noting that Shane–and the NYT generally–may be in a position where the same people hiding behind all this ambiguity will have some say over what kind of headaches Shane will face for once using Kiriakou as a source.

The Commercial for John Brennan’s Signature Strike Drone Shop TADS

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Between them, the NYT and the Daily Beast published over 10,000 words on Obama’s drone assassination program yesterday. Both stories rolled out the new acronym the Administration wants us to use: terrorist-attack-disruption strikes, or TADS. Neither of them, in those over 10,000 words, once mentioned Abdulrahman al-Awlaki, Anwar al-Awlaki’s 16 year old American citizen son also killed in a drone strike last year.

And while both stories break important new ground and challenge the Administration’s narrative in key ways, the prioritization of TADS over Abdulrahman in them is a pretty clear indication of the success with which the Administration pushed a certain agenda in these stories.

As I suggested at the end of this post, I think John Brennan hoped to use them to reframe recent changes to the drone program to make them more palatable.

Drone Strikes before They Got Worse

Before I lay out the new spin these stories offer on the signature strikes and vetting process rolled out last month, let’s recall what was included in the drone program before these recent changes, in addition to the killing of a 16-year old American citizen.

According to the NYT, the Administration assumed that, “people in an area of known terrorist activity, or found with a top Qaeda operative, are probably up to no good” and therefore all military age males in a strike zone could be targeted. A former senior counterterrorism official calls earlier drone targeting, “guilt by association.” Of signature strikes in Pakistan, a senior (apparently still-serving) official joked “that when the C.I.A. sees ‘three guys doing jumping jacks,’ the agency thinks it is a terrorist training camp.” And one of Obama’s top political advisors, David Axelrod, was attending targeting meetings, injecting a political taint on the program.

Even with all of that, these stories don’t explain how the intense vetting process they describe resulted in the al-Majala strike that made Jeh Johnson think about going to Catholic confession and “shook” John Brennan and President Obama. Or, of course, how we came to kill a 16 year old American citizen.

So all of that was in place before the recent changes to the drone assassination program made it worse. Don’t worry, though, it’s TADS now.

With all that in mind–Abdulrahman and the guilt by association and the three guys doing jumping jacks–let’s look at how these stories reframe signature strikes in Yemen and White House consolidation of the vetting.

Assassination Czar John Brennan’s Drone Shop

Consider the way the articles describe the targeting process. The NYT–relying on a single source, “an administration official who has watched [Obama] closely”–describes a very aggressive vetting process led by the DOD, then nods to a “parallel” process at CIA in countries where it leads the vetting.

The video conferences are run by the Pentagon, which oversees strikes in those countries, and participants do not hesitate to call out a challenge, pressing for the evidence behind accusations of ties to Al Qaeda.

“What’s a Qaeda facilitator?” asked one participant, illustrating the spirit of the exchanges. “If I open a gate and you drive through it, am I a facilitator?” Given the contentious discussions, it can take five or six sessions for a name to be approved, and names go off the list if a suspect no longer appears to pose an imminent threat, the official said. A parallel, more cloistered selection process at the C.I.A. focuses largely on Pakistan, where that agency conducts strikes.

The nominations go to the White House, where by his own insistence and guided by Mr. Brennan, Mr. Obama must approve any name. He signs off on every strike in Yemen and Somalia and also on the more complex and risky strikes in Pakistan — about a third of the total.

Since for the most part, DOD has managed the Yemen and Somalia strikes, while CIA managed the Pakistan ones, this conflates the vetting for personality strikes targeted at known people and the signature strikes the CIA has targeted against men doing jumping jacks in Pakistan. Somehow, al-Majala and Abdulrahman still got through that vetting process, but the exhaustive DOD one was, for the most part, far more rigorous than the CIA one.

Now compare that description of the DOD vetting process with the one the AP gave on May 21, which it says is “mostly defunct.”

The previous process for vetting them, now mostly defunct, was established by Mullen early in the Obama administration, with a major revamp in the spring of 2011, two officials said.

[snip]

Under the old Pentagon-run review, the first step was to gather evidence on a potential target. That person’s case would be discussed over an interagency secure video teleconference, involving the National Counterterrorism Center and the State Department, among other agencies. Among the data taken into consideration: Is the target a member of al-Qaida or its affiliates; is he engaged in activities aimed at the U.S. overseas or at home?

If a target isn’t captured or killed within 30 days after he is chosen, his case must be reviewed to see if he’s still a threat. [my emphasis]

That is, that free-ranging discussion, the process by which targets could come off the list as well as get put on it? At least according to the AP, it is now defunct–or at least “less relevant.” Read more →

On Gate-Keepers and Pragmatists

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At the beginning of Obama’s term, when he talked about governing as a pragmatist, I perhaps foolishly believed he meant not pragmatism as DC understands it–as a principle-less squishy middle–but as the Pragmatist school of philosophers would mean it–as someone fundamentally open to and respectful of the ideas and viewpoints of all. Mind you, it was clear that his top advisors–especially David Axelrod–used the word pragmatist in the tired old DC way. But out of whatever idealism or naivete, I believed a smart guy from Hyde Park like Obama, who fancied himself an education reformer, couldn’t help but to have internalized the tradition of Dewey.

Thus far in Obama’s term, it hasn’t worked out that way.

That’s because, regardless of what Obama believes or has internalized, Big-P Pragmatism requires a certain kind of process–an openness to multiple viewpoints–and such process has not existed because of the gate-keepers at Obama’s White House thus far.

Now, to Obama’s credit, every single account of Obama’s decision-making includes some description of what a good listener he is. There’s always the scene where Obama listens intently to the disparate viewpoints on a subject, makes those people believe he has heard them with respect, and then makes his decision.

There are the multiple stories that relate events that take place before such sessions, wherein someone–most often Larry Summars but also Rahm–instructs a person in no uncertain terms that they will not be able to present their viewpoint to the President. There are even stories about minor progressive successes–such as Elizabeth Warren getting Obama’s support for the Consumer Finance Protection Board–that include a person finding a clever way around Summers or Rahm.

Now there’s always the very real possibility that for all that Obama fancies himself a Pragmatist, his unacknowledged very real ideological stances won the day. It may well be that Obama will never succeed in behaving as a Pragmatist because he’s just a lot more ideologically centrist than he thinks he is.

But a significant part of the problem is that for most of his term (I suspect, but don’t know, that Pete Rouse was much better on this point), he has had gate-keepers who either are fundamentally ideological beings (Summers) or are the squishy DC kind of pragmatist (Rahm), who prevented him from pursuing a process that allows real pragmatism.

Which brings us to Bill Daley.

I oppose Bill Daley because he has been, ideologically, on the wrong side of just about every issue. I oppose him because the last thing Obama needs is another bankster in the White House. I oppose him because the optics are horrible. I oppose him because when the next JPMorgan scandal hits–there are a number brewing–it will taint the White House by association.

But given my understanding of Obama’s failed pragmatism, I do take Howard Dean’s comments on Daley seriously.

The core issue is the contempt that not just the progressives were treated by–a lot of people were treated by–a bunch of senior advisors around the President who’ve been here for 20 years and thought they knew everything and we knew nothing.

[snip]

It was more than just Gibbs or Rahm, it was the whole mindset that was going on there. That will change dramatically especially if Bill Daley comes in, who I don’t agree with a lot of stuff politically but I do think a) he’s a grown-up and b) he gets that you don’t treat people like you know everything and they don’t.

Now, Dean is a pragmatist (though with none of the intellectual conceit about being one that Obama has). And so while I disagree with Dean’s characterization that Daley qualifies as someone from outside of Washington, I am very struck by Dean’s description of contempt being the key issue here.

The Chief of Staff’s job is to serve as a gate-keeper. Any Chief of Staff (or Economic Advisor in Summers’ case or Vice President in Cheney’s) can use that position to ensure that only their ideologically-favored choices are presented to the President. Or he (always he, it seems) can make an effort to serve the President’s claim to real pragmatism.

I’m not all that optimistic about Daley. All the myth-making about Obama’s bad relationship with the business community and the seeming certainty that hiring a bankster like Daley will fix that suggests that the whole point of this is about even further narrowing the ideological gate through which ideas and people get presented to the President.

But it is true that Obama’s real skill at listening isn’t worth a damn thing if Rahm or Summers are guarding his door. Let’s hope Daley will change that.

The Obama Disconnect: Arlington, Korea and Catfood

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Marcy wrote earlier this morning about David Axelrod’s despicable announcement of Obama’s capitulation to the oligarchs on tax cuts (another lead balloon the Obama White House incompetently tried and failed to walk back). Later this morning, however, were a couple of events that put an even starker gloss on this pig.

First, was this from The Oval:

President Obama is in Seoul, South Korea, where today he said lawmakers in the United States should hold off on comments about his fiscal commission’s proposals to slash the federal budget deficit through spending cuts, ending tax breaks, and a revamping of the Social Security system.

“Before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts,” Obama told reporters.

He added: “If people are, in fact, concerned about spending, debt, deficits and the future of our country, then they’re going to need to be armed with the information about the kinds of choices that are going to be involved, and we can’t just engage in political rhetoric.”

So, Barack Obama is in Korea lecturing Americans to suck it up and embrace the catfood he and the wealthy elite have deemed necessary to feed us in order to pay for their grotesque largesse. Notably, at the same time Vice President Biden was left to be the White House representative at the traditional Arlington National Cemetery ceremony to honor America’s Veterans, where Presidents usually pay their respects and appreciation to veterans and the military. Especially during a “time of war”. Obama couldn’t make it to Arlington for the Memorial Day Ceremony either.

But Mr. Obama could not be present at Arlington this time because he was in Korea. And just what was so pressing in Korea? As Jane Hamsher points out, it is the desire to press for a horribly conceived US-Korea free trade deal:

It would be a truly horrific blow to whatever is left of American manufacturing at a time when unemployment is rampant. But from a political standpoint, fighting for another so-called “free trade” agreement right now has got to represent some kind of death wish for the Democratic party.

Yes indeed, but thus is what we are constantly served by Barack Obama. As Paul Krugman today rightfully termed it, Mush From the Wimp.

You know, it is not just that the arrogant and cluelessly detached President Pangloss is steaming toward a one and done Presidency, it is that he is literally destroying the Democratic Party and liberal ideology in the process and leaving them in his wake.

UPDATE: I guess Obama couldn’t even sell crack free trade to Charlie Sheen the Koreans.

David Axelrod’s Quaint Idea of Middle Class “Security”

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There’s a lot to despise about David Axelrod’s announcement of Obama’s capitulation to the oligarchs on tax cuts, not least that he made this announcement on the same day Obama’s Catfood Commission Chairs started the process of stealing from seniors to “fix” our deficit.

Let yesterday be marked as the day when a nominally Democratic President began to dismantle Democrats’ signature policy achievement, social security, so he could shovel $700 billion to the very rich.

But I was particularly irked by what Axe described as “middle class security.”

“There are concerns,” he added, that Congress will continue to kick the can down the road in the future by passing temporary extensions for the wealthy time and time again. “But I don’t want to trade away security for the middle class in order to make that point.

Here, Axe is defining “security for the middle class” as tax cuts. Not “jobs.” Not “access to health care, not just insurance.” Not “a guarantee a bankster can’t just foreclose on their house with a trumped up piece of paper.” Not “some basic safety net for retirement.” But “tax cuts.”

According to Axe, we have to shovel even more money on the already rich so as to ensure the “security” of the middle class by giving them a tax cut.

And while I agree that raising middle class tax cuts at this point would be bad for the economy, it’s not the worst thing that could happen to the economy.

In fact, the worst thing that could happen to this economy may well be passing legislation that continues to hollow out of the middle class and with it increasing the massive income inequality that continues to subject the American people to the craven demands of a few very rich people. That is, precisely what Axe and Obama have now agreed to do.

These men either don’t know or don’t give a damn about the security of the middle class.

Confirmed: Official Administration Policy Is to Continue Foreclosures

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The Federal Housing Administration Commissioner, David Stevens, has joined David Axelrod in stating that the Administration sees no reason to halt all foreclosures. That’s not a surprise in itself–it was pretty clear that Axe’s statement reflected official Administration policy.

But I’m particularly interested in how Stevens justified this position in an email sent to the WaPo.

“We believe freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is simply not the prudent step to take in this fragile housing market,” he said.

With approximately one in four homes sold in the second quarter in foreclosure, administration officials worry that a moratorium could have a significant impact on the economic recovery.

“While we understand the eagerness to make sure that no American is foreclosed upon in error, we must be careful not to over-reach and apply a remedy that will make the underlying problem of foreclosures worse,” he added.

First, note where Stevens places the benefit of the doubt. If the Administration has no reason to believe foreclosures to be in error, then it will assume they are not. That, in spite of the mounting evidence that the paperwork problem for homes sold during the bubble is systemic.

Foreclosures have been halted in places where there is an easy means (judicial foreclosures) to expose the fraud underlying the bubble era housing sales, or for companies (like Bank of America) that were pressured to vouch for the whole system. But there is no reason to believe the loans Wells Fargo acquired from Wachovia are any more sound than what BoA has on its books; on the contrary, they’re probably worse. But the Administration position is that we should just carry on with the foreclosures, ignoring the evidence of systemic fraud.

Which is probably, itself, just an effort to avoid admitting to the evidence of systemic fraud.

While the interim paragraph in Stevens’ response to the WaPo is not a direct quote, it seems that he is saying the Administration doesn’t want to halt all foreclosures because they don’t want the housing market to lose a quarter of its sales. That is, they seem to believe that the housing market will freeze up if it doesn’t have a ready supply of below market properties to entice buyers who otherwise would be unable or uninterested in buying.

Now, first of all, it’s not entirely clear that the housing market hasn’t effectively frozen up in any case. Things are so volatile it’s not clear that this quarter would resemble the second quarter in any case.

But given everything else, is it really a good idea to encourage reluctant buyers to buy now? (I say that with a house on the market.)

Read more →

The Obama Administration Wants to Ruin Your Neighborhood

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According to this story, the Administration (in the voice of David Axelrod) sees no need to halt foreclosures while the authorities sort out the mess caused by the fraud committed by loan servicers.

“It is a serious problem,” said David Axelrod, who contended that the flawed paperwork is hurting the nation’s housing market as well as lending institutions. But he added, “I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward” because their documents are accurate.

So Axe says “valid foreclosures” should go forward even while he admits that the servicers’ fraud is affecting the housing market.

Think about what that means. He says that foreclosures that are “valid” should go forward even as we learn more and more news about the huge numbers of foreclosures for which there may be no valid paperwork.

So the bank gets a house in foreclosure with purportedly valid paperwork. And then what?

Particularly in non-judicial states, where no one really reviews the paperwork, who is going to reassure potential buyers for that property that the title is valid?

Frankly, as someone in the market right now, I’ve begun looking critically at properties that were sold at any point during the housing boom–particularly those houses built and sold during the bubble. Because nobody knows whether that house has a clean title. And I’m not even shopping foreclosures.

In other words, until someone can do something to distinguish the clean titles from the crappy ones, savvy home buyers aren’t going to–and shouldn’t–be buying foreclosures.

But Axe says it’s a good idea to continue to force homeowners out of their home, even as the market for those homes will disintegrate until the title problem is fixed (and in his comment, he concedes the market is already being affected by this). It’s going to be harder and harder for banks–never enthusiastic property owners–to find buyers to take those homes off their hands. So those lawns will go unmowed, the houses will get vandalized, property tax won’t get paid, and–voila!–all of a sudden your home value is declining, too, making it much more likely you’ll walk away or do something to get out of the dead weight caused by the festering foreclosure problem.

This is just more of the same extend and pretend: put American homebuyers at risk while pretending that the banks did nothing legally inadequate or (more likely) fraudulent during the housing bubble, all in an effort to enable them to avoid paying any consequences for their mistakes during the bubble.

Rahm and Axe: Timmeh Has Got His Groove Back

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What a ridiculous piece of crap this A1 article by Anne Kornblut is, proclaiming that Eric Holder is having a good week.

It parrots conventional wisdom about what a bad time Eric Holder has had–pointing to turf battles he lost, rather than matters reflecting on the success or failure of DOJ itself. And then proclaims that the arrest of Faisal Shahzad makes all those political battles disappear, at least for this week. For Anne Kornblut, it’s more valuable for the Attorney General to win the approval of a bunch of demagoguing political enemies than to get one after another terrorist to plead guilty and cooperate with the government.

Which sort of tells you about Kornblut’s judgment.

But it’s not Kornblut’s judgment that is most ridiculous in this article. It’s Rahm and David Axlerod’s:

Likewise, White House Chief of Staff Rahm Emanuel acknowledged that Holder had “a very good week,” comparing his ups and downs to those experienced by Treasury Secretary Timothy F. Geithner. “A year ago, people were saying Geithner isn’t what he’s supposed to be — and now he has his mojo back,” Emanuel said Wednesday. “The same with Eric.”

David Axelrod, a senior adviser to President Obama, drew an identical comparison in a separate interview, saying: “Washington is a town of ups and downs, and there are other members of the administration — I think of Geithner, for example — who was in the barrel for a while. And it’s just the way this town works.”

So apparently Anne Kornblut felt her little theory that Eric Holder had a good week was important enough to ask the White House Chief of Staff about.

Really, Anne? That’s what you waste Rahm’s time with? Rather than, say, a question about the coordination between Janet Napolitano and John Brennan on terror strikes and oil spills, something that is not only part of the Chief of Staff’s job description but actually matters?

Apparently, though, both Rahm and Axe not only took her call to answer such an inane question, but they gave her … exactly the same answer. “Sure Anne, Holder has had a good week, but have you noticed what a good week Timmeh is having?” That is, both of them magically turned her inquiry about Holder’s mojo into a question to highlight what they claim to be Tim Geithner’s mojo.

Really, Rahm? Really, Axe?

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