republican presidential candidate

Blame game won't help distressed homeowners

There’s a big pile-on, calling for President Obama to fire the housing bureaucrat who’s blocking the latest administration housing initiative to reduce principal for underwater homeowners.

Ed DeMarco, who heads the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is a Republican holdover appointed by President Bush.

Though DeMarco is supposed to be only acting head of the agency, President Obama has never replaced him.

Now DeMarco is refusing to allow Fannie and Freddie to implement a recent initiative that would offer principal reduction to homeowners who owe more or their mortgages than their homes are worth since the housing bubble burst.

DeMarco’s position is full of holes: he’s worried that if the government doles out principal reductions to some homeowners, homeowners who don’t qualify will lower their incomes and get behind on the their mortgages just to get in line for a principal reductions. And DeMarco claims that principal reduction would be bad for taxpayers, even though his own agency’s research proves him wrong.

Lots of smart folks, including the New York Times’ Paul Krugman, are calling on the president to fire DeMarco. For Krugman and the Democrats, it’s just the latest example of Republicans blocking the President and the Democrats at every step from fixing the economy.

It’s certainly true that Republicans have done nothing themselves to get the economy going and focused solely on demonizing the president and the Democrats.

But do you remember that fiery speech the president gave blasting the presumed Republican presidential candidate, Mitt Romney, for his do-nothing approach to the foreclosure crisis?

Do you remember the president’s strong speeches blasting Republicans’ efforts to blame the foreclosure crisis on borrowers rather than the big banks?

Neither do I.

Is it the Republicans’ fault that the president and his administration have pursued one failed strategy after another that propped up too big to fail banks while not substantially helping homeowners?

Is it Republicans’ fault that the president abandoned one of his campaign promises and failed to push for what could have been one of the most effective strategies to force intransigent banks to renegotiate with strapped borrowers – so-called judicial cram-downs of mortgage debt in bankruptcy court.

That would have allowed bankruptcy judges to reduced mortgage debt as they can other kinds of debt. But it would have accomplished the larger purpose of encouraging bankers to renegotiate with borrowers before they ever got to bankruptcy court.

Only now, after more than three years, when there is a real, live Republican to blame, has Treasury Secretary Timothy Geithner come out swinging – not with aggressive new policies, but against DeMarco.

Two astute observers of government response to the foreclosure crisis, David Dayen at Firedoglake and Yves Smith of Naked Capitalism have pointed out that the Obama administration has been slow to embrace principal reduction in the first place or to convince the public that it’s needed.

In addition, the administration needs to do more to overcome another huge hurdle: under the tax law, the amount of principal reduction will be taxable when a temporary exemption expires at the end of the year.

By all means, the president should fire DeMarco. He should embrace a fight with Republicans when they try to block a permanent appointment to the post. But that should only be the beginning. He should also fire Tim Geithner, who has directly overseen so many of the administration’s previous attempts to deal with housing, which range from the merely feeble to incompetent and downright disastrous. As Neil Barofsky points out, it’s Geithner himself who has stood in the way of principal reductions previously.

If the president and the Democrats are just interested in politics, using DeMarco as a scapegoat will probably help them score some points. But if they’re serious about using principal reductions, the president needs to tackle the opposition directly and convince the public that principal reduction can be a useful tool. And President Obama needs to confront the arguments against them forcefully, whether those arguments come from foot-dragging bankers and investors or dug-in Republicans.

Obama and Romney share bed with a monster

How’d you like your own private court, tilted in your favor, where you could take your complaints against the government?

Pretty sweet deal, huh?

That’s exactly what a bunch of corporate lobbyists are setting up in secret right now, under the guise of negotiating a massive new trade agreement called the Trans-Pacific Partnership.

And this slimy secret deal is being pushed by the Obama administration.

It’s a complete betrayal by President Obama, who as a candidate campaigned strongly against previous secret trade agreements, like NAFTA, that cripple government’s ability to enforce their own worker safety, environmental, public health or financial regulation. In an effort to distinguish himself from his primary opponent, now Secretary of State Hilary Clinton, the president said: “Ten years after NAFTA passed, Senator Clinton said it was good for America…Well, I don’t think NAFTA has been good for America — and I never have.”

As a candidate in 2008, President Obama also said: “We can’t keep passing unfair trade deals like NAFTA that put special interests over workers’ interests...”

Since he became president, he’s signed trade agreements with South Korea, Panama and Colombia. But the TPP, which includes along with the U.S, Australia, Brunei, New Zealand, Singapore, Chile, Peru and Vietnam, and Malaysia, is the first trade deal created solely on President Obama’s watch. And it’s being concocted just like previous trade negotiations: with the corporate lobbyists firmly on the inside and the rest of us, as well as our elected representatives, shut completely out.

If you’re waiting for the Republicans to raise a stink, don’t hold your breath.

Mitt Romney has already said the Trans-Pacific agreement should be pushed through as quickly as possible. The Republican presidential candidate’s support for TPP is also a foul betrayal – of all the free market principles he supposedly holds so dear.

Last week, Public Citizen’s Global Trade Watch ripped the cloak of secrecy that surrounds the TPP when it got hold of a document that detailed the secret court and leaked it.

I wrote about the dangers of the TPP back in April, calling it a “free trade Frankenstein,” a monster that in fact is not free and has nothing to do with trade. It should be called a “corporate bill of rights” that grants big business all kinds of special privileges to stomp on the rights enjoyed by the rest of us.

Lori Wallach, Global Trade Watch’s executive director, compared the TPP to another monster, one that also flourishes in the dark.

Wallach told Democracy Now that “these agreement are a little bit like Dracula. You drag them in the sunshine, and they do not fare well. But all of us, and also across all of the countries involved, there are citizen movements that are basically saying, `This is not in our name. We don’t need global enforceable corporate rights. We need more democracy. We need more accountability.’ ”

Wallach pointed out that under similar provisions in NAFTA, special “trade courts” have forced governments have paid out $350 million to corporations which claimed to have been wronged by a variety of zoning laws, bans on toxic materials and logging regulations.

Shame on President Obama for reversing himself and hatching this monster in the dark. Shame on Governor Romney for slithering into bed with it so cozily as if it was a beauty queen he couldn’t resist.

The time to stop it is now.

The way these trade deals work is that the administration jams it through Congress with no debate allowed on its various provisions, only an up or down vote.

Does this sound anything like democracy?

Ironically, the TPP “negotiations” resume the 4^th of July weekend at the Hilton Bayfront in San Diego.

If you’re in the neighborhood, stop by and suggest that the “negotiators” should do their patriotic duty and deliver the wretched mess where it belongs – to the nearest toxic waste dump.

If you’re elsewhere, let your congressional representative know you won’t be fooled by “free trade” anymore, and neither should they.

We know a monster when we see one.