2010 Didn’t Have to Be a House Rout

Republicans are on the verge of broad wins next week for one big reason: independent voters are ready to boot Democrats from office, according to a new POLITICO/George Washington University Battleground Poll. Expressing deep dissatisfaction with President Obama’s policies and performance, independents have increasingly sided with conservatives in the belief that government grew too large, too fast under Obama—and that it can no longer be trusted. In the final pre-election Battleground Poll, Republicans hold a 14-point edge among independents and lead overall, 47 percent to 42 percent, in the generic ballot match up. – Independents Side with GOP

Well, if you’re going to hit the foreign menace button this is the way to do it. “Citizens Against Government Waste” put it together, with James Fallows, a China expert, weighing in that there isn’t much truth to it, because China relied on the same techniques we are to get our of their recession. I once again find myself reminding Mr. Fallows of the first commandment in American campaigning: truth in political negative advertising has nothing to do with it. The Right continues to outplay Obama and the Democrats on every messaging angle there is to mine, though it didn’t have to turn out as badly as is likely to happen. There is a message for Dems that would have made a difference, even with the dismal economic reality.

Maybe Pres. Obama, Tim Kaine and the Democrats can go to school on the ad above, though it’s way too late for the midterms, which on messaging they’ve run like rank amateurs. The Obama-Kaine contingent should have taken note on how Joe Sestak closed the gap; by talking about Republican Tea Party members wanting to change Social Security and Medicare, obliterating the social safety net. At least Sestak, if he gets to the Senate, will fight for Social Security. I’m not sure Democratic elites will.

It’s impolitic to point out, but Pres. Obama and the Dems should have followed Hillary’s lead, starting with tackling the mortgage foreclosure fiasco, which she campaigned on hard. In fact, she laid the blueprint out for Dems to follow, which coupled with Social Security and Medicare pledges would have set them up in the midterms to be on the side of every working person and family in the country, while also saying to women, we’ve got your economic back. It’s the argument that has served Joe Sestak well, though nothing can save Democrats since the national message from Obama central is so muddled.

Hillary from March 2008:

2.2 million foreclosure notices went out last year – up 75% from 2006. Communities of color have been especially hard hit. Subprime loans are five times more common in predominantly African American neighborhoods than predominantly white ones. And 41% of loans to Hispanics are subprime compared to only 22% to whites. But this crisis isn’t just about the more than 2 million households at risk of losing their homes and, of course, 2.2 million foreclosure notices means many more people than that because obviously you have homes where anywhere from two to ten people live. It’s about the tens of millions of families who have lost value in their homes.

When I talk about the home foreclosure crisis, sometimes people, I can tell, look at me a little skeptically because they, I can tell, they’re thinking to themselves, I didn’t buy one of those mortgages, I don’t have an ARM, I’m not at risk. But, in fact, that is just not the case. Home prices dropped almost 9% last quarter. Home prices for everyone. If you have paid off your home, if you have a fixed rate mortgage with a manageable interest rate, you have suffered the steepest decline on record. That means families have lost at least $1.9 trillion in housing wealth so far, nearly two-thirds of the size of the entire United States government budget. And today, nearly 9 million families are struggling with mortgages that are under water. They actually owe more for their mortgages than their homes are worth. So what was once their biggest financial asset is now a financial liability.

The housing crisis is also a crisis for our cities, our towns and our neighborhoods. At least 41 million homes will lose value because of foreclosures in their neighborhoods, including 1.7 million homes right here in Pennsylvania. Abandoned homes and boarded up neighborhoods mean higher crime rates, lower property values, and plummeting tax receipts for cities and towns across America. Now, a year ago in March 2007 I called for immediate action to address abuses in the subprime market, and I laid out detailed concrete proposals for how to do so. I warned this administration that the problems in subprime mortgages would soon spill over into regular mortgages. The response from our president? Well, his Treasury Secretary told Congress that the problem was, quote, “contained.” And president himself assured us there would be a, quote, “soft landing for the housing market.” The housing crisis then spread from subprime to traditional mortgages. And in August of last year, I warned the administration that the housing mortgage crisis would soon ripple out throughout the entire economy. Again, I called for immediate action and laid out concrete proposals to prevent foreclosures and help states hard hit by this crisis.

I also called for tighter regulation of the housing market, starting with unscrupulous mortgage brokers who were taking advantage of our families. I would require mortgage brokers to disclose right up front that they’re paid based on the size of the mortgage they sell, to put buyers on notice. I would work with states to develop strong, meaningful broker licensing standards to screen brokers and govern their conduct and I would require all brokers to register with the federal government so that home buyers can do their own background checks to ensure they’re dealing with someone who will deal fairly with them.

I also called for greater regulation of mortgage lenders. I would eliminate the prepayment penalties that lead to such high rates of default. I would require lenders to take into account the borrower’s ability to pay property taxes and insurance fees when deciding whether to make a loan in the first place. Too many loan lenders haven’t made that part of the calculation and too many families don’t know that they need to budget for these expenses. In October, I proposed legislation, the Foreclosure Rescue Fraud Act, that imposed new criminal penalties on lenders who were taking advantage of people, offering foreclosure rescue schemes that lure families in, take their money and do nothing to help them.

I’ve also proposed that we amend the bankruptcy code to give judges the discretion to write down the value of struggling families’ homes. Believe it or not, bankruptcy judges can write down the value of many other things to help families pay off their debt, but not their homes. They can write off the value or write down the value of second homes, which seems kind of ironic to me. Making this amendment to the code will help families in bankruptcy pay off their mortgages and stay in their homes.

Coverage when Clinton spoke out on the crisis, March 2008:

Clinton, seeking primacy on an issue crucial to working-class voters who are her core supporters, proposed that the Federal Housing Administration buy and restructure mortgage debt and called for a new $30 billion federal fund to help state and local governments fight foreclosures.

The New York senator, who a year ago proposed a moratorium on mortgage foreclosures and more recently a five-year freeze on interest rates, acknowledged that such action could be described as a bailout. But she cast her proposal as a populist parallel to last week’s relief for investment banker Bear Stearns by the Federal Reserve, saying “it’s now time for equally aggressive action to help families avoid foreclosure.”

“Our housing crisis is at heart an ‘American dream’ crisis,” she told a group of students, faculty, and political figures at the University of Pennsylvania. “Your home isn’t just your greatest asset, your greatest source of wealth – it’s your greatest source of security.”

Clinton has repeatedly recommended a more active role for the federal government in the housing market than has Obama…

From Paul Krugman:

True, Mrs. Clinton’s suggestion that she might convene a high-level commission, including Alan Greenspan — who bears a lot of responsibility for this crisis — had echoes of the excessively comfortable relationship her husband’s administration developed with the investment industry. But the substance of her policy proposals on mortgages, like that of her health care plan, suggests a strong progressive sensibility.

Maybe the most notable contrast between Mr. McCain and Mrs. Clinton involves the problem of restructuring mortgages. Mr. McCain called for voluntary action on the part of lenders — that is, he proposed doing nothing. Mrs. Clinton wants a modern version of the Home Owners’ Loan Corporation, the New Deal institution that acquired the mortgages of people whose homes were worth less than their debts, then reduced payments to a level the homeowners could afford.

Finally, Barack Obama’s speech on the economy on Thursday followed the cautious pattern of his earlier statements on economic issues.

I was pleased that Mr. Obama came out strongly for broader financial regulation, which might help avert future crises. But his proposals for aid to the victims of the current crisis, though significant, are less sweeping than Mrs. Clinton’s: (Mr. Obama) wants to nudge private lenders into restructuring mortgages rather than having the government simply step in and get the job done.

Mr. Obama also continues to make permanent tax cuts — middle-class tax cuts, to be sure — a centerpiece of his economic plan. It’s not clear how he would pay both for these tax cuts and for initiatives like health care reform, so his tax-cut promises raise questions about how determined he really is to pursue a strongly progressive agenda.

All in all, the candidates’ positions on the mortgage crisis tell the same tale as their positions on health care: a tale that is seriously at odds with the way they’re often portrayed.

Mr. McCain, we’re told, is a straight-talking maverick. But on domestic policy, he offers neither straight talk nor originality; instead, he panders shamelessly to right-wing ideologues.

Mrs. Clinton, we’re assured by sources right and left, tortures puppies and eats babies. But her policy proposals continue to be surprisingly bold and progressive.

Democrats are in worse shape because of Obama and the Democratic Party message. It allowed conservatives an opening they should never have been given. The trouble is that Pres. Obama believes in entitlement tinkering and a Debt Commission, so he’s really a lot more in line with the Right than the Left. However, it’s not out of ideological purpose, but instead about political calculation, which is the only thing that drives the Obama White House.

Edward Luce’s latest piece is instructive, with this section dead on, which many of you will recognize as what I’ve been writing for since Obama started to rise. From just one post I wrote in May 2007, though there were many before this date:

Again, I’m all for getting along to get things done. However, when Democrats are in charge the Republicans need to know it. Otherwise, why get elected in the first place? With George Will actually saying that there’s something Reaganesque about Obama’s sunny disposition and lack of vitriol, excuse me, but can anyone argue this wouldn’t be a gift to conservatives? Or maybe the torch is going to be passed to a different kind of politician ushering in a new kind of politics to America. Someone that brings consensus and kumbaya to the White House so Democrats and Republicans can join hands and finally walk side by side, with deals made so everyone is happy. If that’s the case there will be one outcome. The Republican Party will get up off the mat, dust themselves off and then the conservatives will stab us in the back with a smile on their faces, and this once in a generation opportunity to finish off the wingnuts so they’ll truly have to start a twenty year rebuilding process will pass us by. If Obama is president when it happens it’s likely he won’t know what hit him until it’s too late for us all. Tell me how a Candidate Kumbaya would be good for Democrats, because right now I’m just not seeing it at all.

Now, this From Luce:

One reason why Obama’s rhetorical powers have suffered such diminishing returns is because people on the left have become almost as cynical about his core motives as those on the right. On the left, people felt passionately that he shared their liberal instincts. Now, they are sceptical. On the right, people believe Obama is a closet socialist, or worse. They remain convinced. The views overlap only in their assumption of Obama as a man with deep philosophical wellsprings. Neither stands up to scrutiny.

Neither can account for Obama’s frequently shifting positions on almost every subject with which he grapples. One day he is berating Wall Street titans for their corporate greed. The next, he is arguing that we should not begrudge bankers their vast bonuses. In public, Obama asserts that defeating (now “degrading”) the Taliban is critical to America’s security. In private, he says it is worth a go but not for long.

[...] Some of the blame for that should go to Obama’s inner circle, whose grip on the Obama brand does not yet appear to have loosened. Dubbed by Jim Jones, Obama’s national security adviser, as the “water bugs”, the “mafia”, “the campaign set” and “the Politburo”, the inner circle comes almost wholly from Obama’s campaign. Tellingly, none – including Obama – are policy wonks. All, like Obama, are experts in campaigns. None, with the exception of Rahm Emanuel, Obama’s former chief of staff, had a day’s worth of government experience. …

I could go on, but will save you what I’ve already written on emotion driving politics, something that Mr. Obama knew in ’08, but since his compromising bipartisan presidency kicked in has been sacrificed on the alter of compromise.

One of the chilling things about the China ad at the top, as Ben Smith also noted last week are the subtitles. It goes to that mushy place of fear in people wondering about American greatness, while hitting the xenophobia in our culture today. People freak about Spanish being spoken, so the thought of presenting Chinese translated into English will make the heads of conservatives explode. It also hits on what Joe Klein said he heard many people say during his trip around America. China rising over America scares many people today.

Who knows, considering all the push pack on NPR about Juan Williams’ fears about Muslims on a plane, the ad could scare a lot of liberals too, especially the white working-class who will vote for Joe Sestak, but never warmed to Barack Obama because he never tried to reach them or understand the angst blue collar workers have about the jobs that keep a roof over their heads.

The China ad hits a core belief that America is shrinking before the world, but also that we have no leaders currently in power that are doing anything about it, because they simply don’t know how and even if they did don’t have the fortitude.

We need more Harry S. Trumans when all we’ve got are a bunch of Tim Kaines.

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