The Day One Agenda

[stevenkesslar]

This is a really fascinating series of articles.  (And it's also even more long-winded and detail-oriented than me!)

Arguably, it solves the problem of what happens if we elect a Democratic President, and we end up with Senate Majority Leader Mitch McConnell.

The Day One Agenda

Quote

The Prospect has identified 30 meaningful executive actions, all derived from authority in specific statutes, which could be implemented on Day One by a new president. These would not be executive orders, much less abuses of authority, but strategic exercise of legitimate presidential power.

Without signing a single new law, the next president can lower prescription drug prices, cancel student debt, break up the big banks, give everybody who wants one a bank account, counteract the dominance of monopoly power, protect farmers from price discrimination and unfair dealing, force divestment from fossil fuel projects, close a slew of tax loopholes, hold crooked CEOs accountable, mandate reductions of greenhouse gas emissions, allow the effective legalization of marijuana, make it easier for 800,000 workers to join a union, and much, much more. We have compiled a series of essays to explain precisely how, and under what authority, the next president can accomplish all this.

This kind of policy and political strategy would be tailor made for a President Warren in particular.  One of the reasons I like her is she has the biggest Rolodex in Washington.  And it works two ways - up and down.  She can and does go up to the ivory towers and talk to the legal eagles and policy experts and ask, "How does this work in theory?"  And she can and does go down to the grassroots Black female activists who actually work in the grassroots and ask, "How will this actually work in practice?"

Bernie and Pete and Kamala might be willing and able to pull off versions of this.  I don't think Biden would even be interested.  

There are supposedly 30 individual essays on each of these good ideas.  I could only find two in the "Day One" series: one on student loan forgiveness, and one on banking and corporate reform.  I'm only going to post the one on Wall Street and banking reform, because I don't think the stuff on student loans would be as of much interest here.  But I hope they are going to do a whole series of these.  Loads of good ideas.

Overhaul the Business of Wall Street

This particular article on Wall Street is itself an argument for a Warren Presidency, I think.  She did overcome all odds to "mother" the Consumer Financial Protection Bureau, including navigating political opposition by what I view as the "bank whores" within the Obama Administration itself.  

I actually believe that if somehow we could redo history and we had a President Warren from 2000 to 2008, we'd be living in a very different United States.  First, there would not have been an Iraq War.  Second, there would not have been a predatory lending crisis that led to a Great Recession.

I was present at the creation of some things in the 1980's.  I helped organize lobby days on Capitol Hill to fight for and defend the Community Reinvestment Act (CRA), which is mentioned in the article above.  I organized the "hit" on Fannie Mae where about 1000 people took over their DC corporate headquarters and forced them to negotiate what turned into, initially, a $1 billion Community Home Buyers Program.

What Bill Clinton did in the 1990's was a case study that the central thesis of this series is right.  What Presidents can do using their own authority for the good is amazing.  He took all these things that had been happening at the grassroots, centered around fights with banks over the CRA.  And he turned them into a national home ownership and wealth creation strategy.  It worked brilliantly.

Even in the peak of growing Black home ownership, the net worth of Blacks was a pittance compared to the net worth of Whites.  But depending on what statistics you look at, as a result of what Clinton did - pushing home ownership - Black net worth as much as doubled.  Again, that's easy to do when you are starting from a very low place.

If you want to hear Warren at her best, listen to her take on what the predatory lenders did.  She is absolutely right.  You can't blame any of this on Clinton, because it didn't happen until 2006 or 2007.  We had a recession in 2001, and people who bought homes in the Clinton years pretty much sailed through just fine.  (I bought my first two rental homes in 1997, so I know this from personal experience.  If you can get through the first five years, you are usually okay.)

What Warren talks about is how the predators came in in the early 2000's and started making shitty home equity loans to people that were pretty much set up to fail.  And if you look at when it really got out of control, it was after 2004 - when the Republicans controlled the White House, the Senate and House Banking Committees, and all the regulatory agencies.  It's a bit too black and white to say it this way, but my view is the Republicans told the predators, "Do whatever you want. Make big gobs of money at their expense."

If you go back, Warren (and Bob Shiller, by the way) were two of the academics arguing at the time that this was going to end very, very badly.  And they were right.  

So two points.  Smart people did see it coming.  And we should not underestimate the ability of a President to do harm, or to do good, simply by using the authority the American people give to them.

Edited September 23, 2019 by stevenkesslar
typo

[AdamSmith]

Superb.

One footnote: Clinton did preside over the dismantling of Glass-Steagall, which was as much the source of the Great Meltdown as was the rash of subprime mortgages and their subsequent metastasizing throughout the whole financial system through being repackaged as credit derivative swaps etc etc.

So to give the devil his due.

[RA1]

A banker friend of mine (there are not many that might qualify) saw it differently.  He said the government was "forcing" bankers to make real estate loans that did not otherwise qualify.  Maybe strongly encouraging is a better verb.  

Best regards,

RA1

[stevenkesslar]

2 hours ago, RA1 said:

A banker friend of mine (there are not many that might qualify) saw it differently.  He said the government was "forcing" bankers to make real estate loans that did not otherwise qualify.  Maybe strongly encouraging is a better verb.  

Best regards,

RA1

Sorry to pry.  But is your friend named Sean Hannity?

This is a perfect example of why Fox News is the Fake News capitol of America.  Sean Hannity doesn't have a fucking clue what he is talking about.  And it's worth talking about, because it's also a perfect example of the cruelty and ignorance that Trump is using to march his party off a cliff.  Just like the Republicans led off us a cliff with Iraq and subprime a decade ago.

And on this one, I know my shit.  I could post the books and Pulitzer Prize winning series I have been quoted in on the history of racial redlining.

So let's start with this.  Sean fails at Journalism 101. It's not The Community Investment Act, which would be CIA.  It's the Community Reinvestment Act, or CRA.  The distinction matters, since the concept is that banks have an "affirmative obligation" to reinvest in the communities they take money out of.  This isn't gifts to poor criminals.  This is reinvestment in working class communities.  In your words, this is capitalism. (Remember, now.  Elizabeth Warren knows this issue inside out, like I do.  And she's a capitalist, bless her heart.)

Michael Moore did great.  His first point is spot on.  If a law passed by a moderate like Bill Proxmire in 1977 forced the government to make home loans to people that couldn't afford them, why did the crash not happen in 1978, or 1979?  Sean has no answer for that.

The irony is if Sean was speaking the truth - which he is not - this interview happened 32 years after the CRA was passed.  Do the math.  Most people get 30 year mortgages.  So even if Sean was correct, which he's not, the people that banks were forced to give bad mortgages to in 1977 or 1978 or 1979 would have had their loans paid off by right around 2009.  Mortgages don't fail when people finally have their mortgages paid off.  That dog won't hunt, Sean.

I once was quoted by media that used AP all over the country because I had a great zinger at Congressional testimony.  "Your chances of being a bank that fails a CRA exam are smaller than your chances of dying in a plane crash."  So Moore is right on that, too.  Nothing happened under Reagan and Bush 1 because the law was not enforced.  Which goes to my whole point in this thread, about what Presidents can do if they have a will to.

In some ways, that was good news, in retrospect.  I think of community organizing and community development as a form of capitalism.  So during the 80's I was organizing against folks like GE Capital and Fannie Mae and the Mortgage Insurance Companies of America.  Which eventually led to multi-billion dollar community reinvestment partnerships.  And they worked.  So at the grassroots, we were being like Elizabeth Warren.  We were coming up with plans, and figuring out what worked.

Clinton's timing was perfect.  By the time he took power, a lot of really good work had been done, and a lot of really good partnerships had been built.  In one week in in the late 1980's, I recall me or my boss going to speak at  press conferences on pilot programs with Dick Gephardt, George Voinovich, and Dan Rostenkowski.  If I recall right, my boss actually got to fly in a private jet with Rostenkowski to announce this program.  With the CEOs of Fannie, GEMICO, etc.  It was a big deal.  And that was just one piece of many - the piece I know best.  

So Clinton built on all that and nationalized it.  And it worked great, as the chart I posted above showed.  So the question is:  if this is Clinton's fault, why did it blow up at the end of W.'s second term?

If you understand mortgage financing, the biggest risks come in years 3 to 5.  If you add a recession into the mix, that makes a difference.  The biggest reasons you lose your home are job loss, or divorce.  So having a recession in 2001 was a real stress test for working class Blacks and Hispanics and Whites that bought homes in the Clinton years - like 1997 or 1998 and 1999.  And you know what?  Mostly, people sailed through.  Home prices sagged a little, but they didn't plummet.  

I can tell you why, from personal experience, not only as an organizer but as a landlord.  I bought my first two rentals homes for about $100,000 each in 1997, using mortgage financing that would have been considered "subprime" at the time - meaning edgy, but not crazy.  By 2001, I had some equity.  There were months when I struggled to make the mortgage payments, like if the rent was late.  But I did whatever it took (hey!  I became a world class whore!), and I got by. 

Even if I couldn't pay the mortgage, I could have avoided foreclosure by selling.  By 2007 when the shit really hit the fan, those two homes were worth well over twice what I bought them for - because of the bubble.  They both went down in value about 30 % during the crash.  But they never got close to what I bought them for, let alone what the mortgage was for.

What really went wrong is that in 2004, 2005, 2006 you had predators running amok making predatory loans.  And they were more home equity loans than purchase loans.  Warren is right on that, too, if you listen to her and want to knows the facts, as opposed to Fox Fake News.  The predators saw an opportunity to steal the money.  And they did.

I think it's fair to blame Democrat Barney Frank a little, since he chaired the House Banking Committee up to 2004.  To me, he sounded willfully ignorant.  Democrat Chris Dodd, who chaired the Senate Banking Committee, should have gone to jail.  He was a "Friend Of Angelo's", meaning the CEO of Countrywide Mortgage, which was ground zero for predatory lending.  But most of these loans were made when Republicans controlled the White House, the Senate, the House, the Fed, the FDIC, the OCC, HUD, and all the other federal regulatory agencies.  So my view is it is fair to say they are the ones that let the predators run amok in 2004 and 2005 and 2006 and 2007. 

Again, it takes 3 to 5 years.  It's no shocker that loans originated in 2005 or 2006 went bad in 2008 or 2009.  Even more so when you set the mortgages up to fail, like Moore stressed, with teaser rates and balloons.  It was utter and total fraud, and lots of bankers should have gone to jail.  Warren is right about that, too.  And she was right to fight like hell for a Consumer Financial Protection Bureau, which hopefully (unless it's run by Mick Mulvaney) will stop this from happening again.

Ironically, the problem is more like the opposite of what Fake News Sean Hannity said it was.  This was not about bad people that the government forced banks to give bad loans to in 1977.  This is about good people who bought homes in 1997, under Clinton, like me.  And by 2007, if the predators were able to, they conned some of those people out of their money and their home.

Now, in fairness, Sean is right about one thing.  Nobody forced these home owners to take out predatory home equity loans.  Again, I can speak to this from personal experience.  At one point in Sacramento 3 of my 4 tenants were all former home owners who had lost their homes to predatory lenders.  One was a Black family, one was a Hispanic family, one was a White family.  It hit working class and middle class people of every race.

When the Black tenant told me she was in a short sale when she filled out the rental app, I went liberal and said something about how I felt the banks had really screwed people bad.  That was enough to start her sobbing, because the pain and humiliation went that deep.  So you can call her stupid, or whatever.  But she was a wonderful church woman, and a great tenant.

The White couple had bought their home back in the 90's, like when I did if I recall right.  So I was confused.  I asked, "You must have had equity?  If you couldn't make the mortgage payment, why didn't you sell?"  The answer went something like this:  "Remember all those lenders that called you up, or knocked on your door, and asked you if you wanted to take that trip to Europe, or buy that boat or that vacation home?  Well, we did."  It didn't help that the predatory loan had a teaser rate that made it doomed to fail from the day it was originated. But the government was run by Republicans then, and they let the predators just make a gazillion doing it.

This is exactly why we need somebody like Warren in the White House. I'm 1000 % sure the predators will try to do it again, if we let them.  And you think Fake News Sean and Bankruptcy King Donald or Mick Mulvaney or Steve Munchkin are gonna stop them?

Give me a fucking break, Sean.
 

 

Edited September 24, 2019 by stevenkesslar
typo

[stevenkesslar]

5 hours ago, AdamSmith said:

One footnote: Clinton did preside over the dismantling of Glass-Steagall, which was as much the source of the Great Meltdown as was the rash of subprime mortgages and their subsequent metastasizing throughout the whole financial system through being repackaged as credit derivative swaps etc etc.

So to give the devil his due.

I will.

That's the best book written on the financial crisis, I think.  McLean is a former WSJ reporter, if I recall right.  Her reporting and detail is just incredible.  It is an intentionally top down look, so she focuses more on the CEOs and politicians than the grass roots.  And it is a horrible indictment.  And it comes down to a three letter word:  EGO.  And actually maybe another four letter word:  MALE.  She's a smart woman  (her book on Enron, who I personally spent 4 years organizing against, and winning, was called The Smartest Guys In The Room). 

So the question is: why would incredibly powerful and rich men like Stan Greenberg and Angelo Mozilo actually destroy the companies they built from the ground up?  McLean's answer:  because they were big men, with big egos.  They all thought their shit didn't stink.  And all these people under them made shit loads of money.  She says there was a saying at the time:  IBG, YBG.  I'll be gone, you'll be gone - when the shit hits the fan.  That explains it all, I think.

Bill Clinton and Bob Rubin and Alan Greenspan belong on the list of big guys with big egos.

That's Brooksley Born, who was a Clinton appointee who ran the Commodity Futures Trading Commission (CFTC) from 1996 to 1999.  That is the agency that, in theory, could have been on top of all this incomprehensible shit happening with derivatives of mortgages being traded around Wall Street and the planet. And she was pushing for tougher authority to stop exactly the kind of bad shit that ended up happening in the next decade.

McLean, who I think is a centrist feminist, describes a key meeting in the Clinton years where Greenspan and Bob Rubin were in the room.  (Clinton wasn't.)  Rubin, who had a reputation as Mr. Nice, is the one who knee capped Born.  It's not clear from the reporting that Clinton even knew about that knife fight.  He offered to reappoint Born.  She apparently felt if she wasn't going to be allowed to do her job, it wasn't worth it. 

Again, this is why we need somebody like Elizabeth Warren in the White House.  She knows how to fight with knives and win.

In fairness, can you blame Clinton for crimes committed in 2004 and 2005 and 2006 and 2007?  Even if Born had gotten everything she wanted, some Republican would have been running the CFTC under W's watch.  Just like they ran the Fed, the FDIC, the OCC, the Treasury, everything. 

As Michael Moore said, they were not interested in enhancing the rule book.  They were interested in throwing the rule book out.  

What would have happened if this had all come down on Clinton's watch?  We'll never know.  But the point is:  it didn't.  You can't blame what happened in 2008 on what he did in 1998.  You have to blame it on what W. tolerated, perhaps even with the best of intentions, in 2004, 2005, 2006, 2007.

Will Elizabeth Warren tolerate this happening on her watch?  Call me naive, but I think she's the last fucking person in the world who would.

 

Edited September 24, 2019 by stevenkesslar
typo

[RA1]

I have never watched Hannity.  I was referring to a local to me banker.  Likely it was the Republicans that caused all those losses.  Their policies certainly caused me a great deal of difficulty.   That does not make me a Democrat or a Republican, I lean towards Libertarianism.  

You are apparently living the life of a capitalist.  Good luck with that continuing if Bernie or Warren is elected And their programs are enacted.

Best regards,

RA1

[stevenkesslar]

5 hours ago, RA1 said:

You are apparently living the life of a capitalist.  Good luck with that continuing if Bernie or Warren is elected And their programs are enacted.

If it were 2016, I'd take the bait and talk about Bernie. 

But I won't now, since the trend is that he is sort of (barely) holding on, and Warren is rising.  So it is more interesting to talk about her.

First, she pretty much stops Trump's best zingers in their tracks.

Examples:  

Trump says.  "You're Pocahontas."  Warren says, "Thanks, and you just proved you're a racist."

Trump says.  "I'm a capitalist.  You're not."  Warren says, "Funny thing is, I'm a capitalist, too.  Perhaps you mean you're corrupt, and I'm not."

If you watch that clip above of Warren at a committee hearing, it explains how I think she calls people into the trenches and wins.  It's not that she's against capiatlism.  It's that she wants capitalism (and banking, and the mortgage industry) to work for everyone - not just the fat cats.

Having flipped a few homes that I sold to low-income families (one was White, one was Black, and both famiies should have over $100,000 in equity today, if they did not use the home as a piggy bank), I just love this example:

Trump slams 'total hypocrite' Elizabeth Warren

Quote

In a tweet Wednesday morning, Trump alluded to past reported instances where she benefited from the purchase and flipping of foreclosed homes in the 1990s. During her senatorial run in June 2012, the Boston Herald reported that Warren "rapidly bought and sold homes herself, loaned money at high interest rates to relatives and purchased foreclosed properties at bargain prices" in her native Oklahoma City.

So it's clear, that article is from May 2016, before Trump was elected.

You just got to love it.  After Trump U and all the bankruptcies and law suits and fair housing complaints, Trump is going to go after Warren for being scammy on real estate?  Give me a fucking break!

I won't go any more into the details, other than to say I pray Trump makes this a campaign issue.  The more you get into it, the more you learn that, "Duh!  She's a capitalist."  Just not one that loves to rip people off.

 

Edited September 25, 2019 by stevenkesslar