I donated to Barack Obama during the campaign, and voted for him in November. However, I am starting to wonder if this is the Obama we thought we were voting for. In the words of Frank Rich, I am starting to wonder, "Are we being punked?".
I first had an "off" reaction to Obama back in April 2007, rather to my puzzlement at the time:
I kept zoning during his speech and smacking myself upside the head for not being respectful and paying attention. I was told later on that his speech was composed of parts of 3 other speeches he routinely gives, and has given for quite some time. Perhaps I sensed the "roteness" of it. Overall a nice, workmanlike speech.
Obama's was the last speech I expected to "zone" on. I have liked him since he was added to the first "Dean's Dozen", and only more so since his speech at the Democratic Convention that year. Did I subliminally detect some "off note", I wondered?
Occasionally, during later speeches, I would notice that if the crowd unexpectedly interrupted him, such as with chanting, he would sometimes look a bit impatient and resume his talking over their cheers, rather than waiting for them to die down. I thought this a bit odd, especially in someone who'd spent time in Black churches, bastion of the call-and-response interaction between a speaker (the minister) and his audience (the congregation).
But I've always liked him, backed him, and was perfeclty happy when he was elected. I looked forward to a season of clean-up of the rotten mess the rethugs had left of our country, and our financial system. And it is here that my doubts have begun.
- He and Congress did not reinstate Glass-Steagall or the other Depression-inspired regulations on the banking system that were removed over the last 30 years, which allowed this mess to occur.
- He and the Democratic Congress have not taken a firm hand on the big banks and their rotten assets. Many urged that the "too big to fail" banks should be nationalized and cleaned up; but that has not happened. The Four Banks of the Apocalypse (Citi, Chase, Wells, and Bank of America) are in pretty much the same configuration they were in Fall of 2008. Meanwhile, the Wall Street firms we bailed out with our tax dollars turn around and use that same money to pay their executives outrageous bonuses.
- In fact, Obama has appointed a number of Goldman Sachs and other Wall Street insiders, such as Tim Geithner, to crucial economic posts in his administration. As New York Fed chairman, Geithner was in the center of the original [censored]storm.
- Instead of real housing market cleanup, there's been a string of "extend and pretend" legislation, foreclosure moratorias, and bogus loan "mods", all of whose only real function is to maintain the bubble-inflated valuations of these mortgages on the banks' books. Dick Durbin and some others in Congress have attempted "cram-down" legislation <super>[1], [2]</super>, which would enable mortgage balances to be renegotiated-- but that legislation has been shot down. I have not seen Obama pushing hard for it. (He's spoken in favor of it in the past.) Maintaining these mortgage balances at bubble-era highs guarantees at a minimum that the poor homeloaners will be debt slaves for life. Rather than just "stop" foreclosures, we should reduce the balances to pre-bubble valuations or current market valuations of these houses. Then the people would be able to afford the payments, or afford to sell the houses (not "underwater"), and others would be able to afford to buy them.
(Disclosure: I am in California, and want to buy a place of my own. But the decline of prices off their ridiculous bubble highs has been stalled out by all these shenanigans, and the resulting artificial scarcity of decent places for sale. I don't necessarily need for millions of poor shmoes to be foreclosed upon. I just need the price of decent housing to drop within my reach.)
- Meanwhile Obama has appointed a former Monsanto ally to head the USDA, boosters of genetically-modified crops in charge of food safety, and a pesticide trade industry spokesman for U.S. Trade Representative. Overall, his appointee record regarding our food supply and food safety has been mixed at best.
- Even the centerpiece, health care for all, has a worm in its fruit bowl. The proposed "solution" to all those people who don't have health insurance, because they can't afford it? Force them to buy coverage, and fine or jail them if they don't! WTF, indeed!
- Given the backdrop of these other things, this piece published on FreeRepublic seems somewhat more plausible to me. It purports to be a first-person account, in a personal email, by a high-level mortgage broker of their attendance at an industry-leaders' conference this month. Normally, I take freeper posts with a grain of salt the size of a Rubik's cube. But the following statement about what a Treasury Department representative said to them about commercial mortgages, jibes very well with residential housing data I've been seeing posted on various housing-market blogs for months:
"Here is the real stunner. A senior person at Treasury said to a small group of us that it is now official Treasury policy to extend and pretend on real estate loans. In other words, the policy statement from last week says, if you can make an analysis that says even if the current value is less than the loan, if you can do a spreadsheet that shows if you extend for 3-5 years, and if the economy gets better, and if the loan can be amortized down to where the loan is no longer more than the value, then the lender does not have to take an impairment -write down. Loans are to be modified by rate reductions, deferral of reserves, deferral of amortization or what ever.
Just NOT principal reduction. This is just like they are doing in housing.
Giant make believe. The free market seeking an equilibrium price is no longer economic policy. In short, the working of the free market is suspended. She went on to say it was administration policy that they will create new employment and by doing so they will boost the economy, and so then real estate values will return to old levels.
There were 50 of the most senior and smartest real estate people in the room. They ripped her to pieces. It looked like one of the town hall meetings of August, except everyone there was a very senior, polished professional. At one point everyone was calling out or moaning at her.
It was clear to all she had been given a few talking points and she was told to stick to them no matter how foolish she looked. The group told her in no uncertain terms this is terrible public policy. They said for jobs to be created you need to lower rents so the cost of occupancy was at a level to encourage more hiring. If the loan is kept at old levels and building values not reduced, then landlords can't reduce rents to where they need to be to make taking space by tenants economically viable. Retailers costs remain higher than they should be making it harder to lower prices to induce sales. So there is a massive make believe going on. When I pressed the issue of political interference she said -what do you want us to do, bankrupt all the banks?
That is the choice.
What does this tell you?"
(emphases mine)
So in other words, what this writer claimed to his retired Goldman Sachs friend in the email, was that Treasury was sanctioning and even urging banks to commit accounting fraud on a nationwide scale, just so they can avoid going down like Lehman Brothers.
Is this true, I wonder? Is it sanctioned by Obama? With all the industry appointees in his administration, and all the twiddling that industry has done to items such as the health care bill, is he really ever going to crack down on the greedbags that got us into this mess? Or is he in their thrall? Or worst of all, is he in league with them?
Are we being punked?