This is not a revelation, because I wrote about it in great detail before the 2010 midterms, sounding warnings for months and months that Pres. Obama buying into the Right’s economic argument would end in big trouble for us all.
The connection between the foreclosure crisis and rampant unemployment is well known by economists and the administration. Diving home values and heavy debt burdens force cutbacks in both consumer spending and tax revenue for local governments. These reduced spending levels and lower government revenues force layoffs in both the public and private sector. And those layoffs, in turn, spur more foreclosures. A July 2010 report from the International Monetary Fund suggested that foreclosure problems added 1.25 points to the unemployment rate — or more than 10 percent. On Thursday, President Barack Obama warned House Democrats in a private meeting that the housing situation could drag down the entire economy. His stated concern about foreclosures, however, doesn’t match up with the administration’s public response. – Huffington Post
Unsurprisingly, it was foretold by Paul Krugman as well:
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.
… 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.
Barack Obama never pretended to have a progressive agenda, but what is clear is that his rightward leanings are mimicking the trouble we’d have if a Republican president was in the White House.
He didn’t even offer a fight on taxes before the 2010 midterms, which was followed by capitulating and compromising on Bush tax cuts. Now he’s offered a grand gesture to House Democrats saying he won’t extend them again, but it comes way too late.
Democrats have every right to be furious at Pres. Obama’s economic message and policies.
Rep. Dennis Cardoza (D-Calif.) said Obama’s approach to the foreclosure crisis has been “an absolute failure” and predicted it will continue to drag down the economy unless he changes tack.
“For the life of me, I can’t figure out why a community organizer who says he cares about families, who says he cares about communities, has just turned his back on one of the biggest problems in America,” said Cardoza, who co-chairs the Democratic Caucus Housing Stabilization Task Force. “The way they get defensive when you point out it’s been a failure just underscores to me they don’t have a clue about what to do.”
Cardoza’s central California district has been hit hard by foreclosures. The three cities he represents — Modesto, Stockton and Merced — all rank in the top 10 cities with the highest foreclosure rates in the country. Three out of five homeowners in his district are “underwater,” owing more on their home loans than their houses are worth.
“I don’t blame [the administration] for causing the housing crisis,” Cardoza said. “But at two-and-a-half years in office, if they can’t figure out something to do soon that turns us around, I guarantee you they will pay for this at the ballot box.”
Pres. Obama’s formulating his deficit commission was the nail in the economic argument, because it solidified the Right’s talking points that the deficit is all important in a recession when spending is required. It opened the door for Paul Ryan’s Medicare scheme that gave the Dems a boost with NY-26, but put entitlements on the table in the first place.
No one is more responsible for the conversation about deficit reduction over revenue, while ignoring the foreclosure catastrophe, and giving Republicans the floor on austerity, than Pres. Obama. If he doesn’t figure out how to turn it around he deserves to lose his job.
On the foreign policy front, if Pres. Obama doesn’t come up with real reductions in troops in Afghanistan, a policy that is breaking us, rumored to be anywhere from a paltry 5,000 to as high as 15,000 (the minimum that should be considered), his leadership is unworthy of the challenges we face. (But let’s not kid ourselves that Mitt Romney or Tim Pawlenty are up to the job either.) Leon Panetta at the Pentagon is a hopeful sign, as he’s an OMB guy and a deficit hawk, which in the SecDef position could be important, but the election can only foreshadow what might come in a second term. Getting out of Iraq is another point of contention, but instead we get Sec. Clinton opening up the Iraq cookie jar to U.S. businesses, though considering all preemption cost this country getting something back isn’t the worst of Obama’s plans.
Of course, you can’t talk economy without mentioning health care fee-for-service costs that remain a huge drag; so Obama got the kudos without the results needed, leaving us all with a hangover and a lot more that needs to be done, with no will to tackle it.
The economic news today brings with it the reality of what could have been done earlier, starting with corporations who aren’t paying their fair share of taxes, but also includes targeting mill-billionaires to create a higher tax bracket for the super wealthy. It’s attacking the problem through revenue that is broadly accepted by the American people as being fair. Channeling Bill Clinton’s tax policy when everyone knew the “recovery” would be fragile certainly made a hell of a lot more sense than sucking up to the Republican economic model, which is what Barack Obama did instead.
Now Obama’s only option is trying to change the narrative, because he can’t change the reality that may not have started on his watch, but which he’s managed as a Republican, with the results similarly catastrophic.
As Jared Bernstein has said, who last month joined Center on Budget Policy and Priorities (after serving in the White House), the “cut spending craze” has got to stop, as it “threatens to make an already tough situation worse.”
Wasted wisdom, because Pres. Obama’s not listening.
Screen capture from Huffington Post.
Barack had a chance to be FDR, and he blew it. Blew it! Instead, he thought it more important to push his namby-pamby idea that he could bring everybody together and sing around a campfire. He’s a puss. You elect somebody with a big ego and no experience, and what do you expect.
I’m galled that I have to vote fucking Republican to help defeat him. He should be challenged in his own party.
What a way to start a weekend … and summer.
Foreclosures; and underemployment, unemployment, or as lambert says, DISemployment. Obama did face this crisis when he walked into the WH. But as you say, it’s all his now. I doubt he, or anyone else, could have completely turned it around in this amount of time. But his decisions, of course, have made things worse.
He’s done what he wants to do. I don’t know how any of this can be a surprise.
So, Obama is re-elected, as still seems most likely, and he keeps doing the same Right thing. Or an openly Republican contender wins the WH, and does the same Right thing, with probably more enthusiasm.
Agree 100%
But lets not forget that the Dems in Congress during Pres Obama’s first two yrs were also a major part of the problem. The progressive caucus in both chambers were toothless tigers-They never really fought for true Democratic principles and priorities. They continually conceded their progressive positions and signed off on conservaDem framing and legislation. Lets face it the President and the Dem Congress were basically the former moderate wing of the Republican Party and they governed accordingly.
They showed no courage, afraid to be Democrats. Just look at what went down with the Bush tax cuts, they were afraid to put the Republicans in a box before the mid-terms. I could go on.
The last time The Dems had a prominent Dem out in front fighting for Democratic Party principles was when Howard Dean led the DNC. The Dems should be out there pumping up the success of the auto bailout, they should beating up the Repubs daily on the Repub goal to end medicare, Where are the DC Dem women in the constant assault on womens rights in the states-they should be out front leading that battle not waiting for the Dem Party establishment to fight that battle
Who is leading the charge now- no one. The Pres is to timid to fight or rather he still thinks he can work with the Repubs to get something accomplished and therefore doesn’t want to “hurt their feeelings”- pure political incompetence and malpractice.
The DC Dems should take a page from the Wisconsin Dems- when you fight for the working class and poor, and actually behave like Democrats-the electorate will rally. The pure meaness of Repub governors like Scott in FL, Walker in WI, Kasich in OH, et al are gifts from heaven to the Dems. But are they doing anything about it ?-no, just cricketts.
The current Dem Party in DC is pathetic. There are openings you can drive a truck through to beat up the Repubs and gain significant advantage. But what do we get-silence.
True, the President owns the economy, but let’s not forget he was aided and abetted by the Dems in the House and Senate.
And the opportunity to change the debate, the framing of issues,and the direction of the country was wasted.
A strong president brings his party to him and steers a path. I’ve never let the Democratic Congress off the hook, but let’s also remember that Speaker Pelosi passed a lot of liberal legislation that Harry Reid wouldn’t touch & Obama could have cared less.
Obama is *supposed* to lead his party with purpose. The only purpose he has shown is his strong penchant to tack towards the right. That’s on him.
In fact, what dragging Obama has done to Congress has been in the conservative direction. Dennis Kucinich’s airplane ride is a case in point. He beats on the hippies, and kisses up to the bankers.
Anyone who doesn’t understand by now that these are Obama’s priorities hasn’t been paying attention to what he’s done.
Community organizing was just a stepping stone for Obama. In a New Yorker article that I mentioned a while back ( published shortly after the ’08 election ) Obama is shown to be a man on the make. He met all the right people and hung around all the right places to get where he is. At the Harvard law review they expected big changes from him and got nothing. In the state house and in congress he was the american equivalent of a back bencher. Most telling, their was a very old community bank in Mr. Obama’s old neighborhood in Chicago, it specialized in lending to low income people but did not do sub prime. When it was in danger of failing Obama did nothing to save it. As for the Democrats, so desperate to regain the majority, they recruited blue dog democrats to run in swing states. To bad, so sad; blue dogs are two faced republicans.
“Community organizing was just a stepping stone for Obama.”
I have suspected this for a long time, though I hadn’t seen the article you’re referring to.
Another major problem is that there is really no heavy weights in Washington DC not like there used to be. Massaschusetts Senator Ted Kennedy, and West Virginia Senator Robert Byrd to name a few that could really bring the President’s feet to the ground. There used to be some very powerful Senators that could stand up to the Presidents without getting pushback. When these guys talked, you listen PERIOD. Boy, How I them, and now we have a bunch of newbies that have no power and really not listened too much and don’t balance the power between the branchs, the way the founding fathers wanted and wrote. I am also worried about jobs in this country and I am afraid its going to get way worse if something is not done soon.
It’s Obama’s economy now…he (along with many others) should have realized this on his first day in office. Many Democrats were and some are still stuck on Bush. Not that it is excusable how he handled the economy (and he deserves a lot of blame), but when you get the job, the power, everything is on you. Even now when watching the news and reporters ask Democrats a question about the new unemployment number, the default anwer is Bush.
As for the housing mess, people are now just realizing that the economy and the housing market are entertwined? It too late for that revelation. It’s too late to do anything like Clinton proposed. It just has to run its a long, slow course.
There is a tale of two economies, because the people who really like him still are doing just fine thank you.
Followed your link to “The Tale of Coup Cities” — enjoyed the read. Thanks.
Well, this problem goes back to the primaries. Obama was never interested in doing anything about the economy. He rode in on being “anti Iraq War” which ironically we are still in. Obama was the darling of the “latte set” who only cared about the Iraq War and not the economy. The people who had been suffering during the Bush years saw right through his crap.
Now for that stupid shortsightedness of the party, we are going to have to continue this crap for another four years under a GOP president who will continue the “austerity” mode until we have 20% unemployment as the lowest UE number. Thanks RBC and all the other bozos who thought pushing Obama was a great idea. I guess karma’s a bitch will really come back on them.
“Tale of two economies” — that’s even better than the now-tainted “Two Americas” rhetoric.
The rhetoric was good, and it’s as true as it ever was. What’s tainted was the rhetorician. It was the thing I liked most about Edwards – he clearly got that this was true. I really don’t think any of the other candidates for President got that, nor do any of the likely ones now.
Cujo59….I think it was Elizabeth Edwards who go it.
I think they both did. Elizabeth probably had an influence on John’s perceptions, and may have been the one who made him realize that he should make the Two Americas idea a central theme of his campaign. Still, he came from a lower middle class background. He knew what it was like.
I’m with Lake Lady. Edwards’ “son of a mill worker” did click for him as an orator, but I wish he wasn’t the one who popularized the “Two Americas” rhetoric, because it was really good and now, whether rightly or wrongly, it’s associated with being a phony. Plus it was Elizabeth who I always thought really intrinsically knew how to walk and talk like a liberal populist. It was Elizabeth who spoke to me. She always looked like she eat, sleeped, drinked liberalism and could talk/walk about the middle class and workers, women, lgbt, minorities, etc. in her sleep. She got out there and blogged on lefty blogs and forums. She lit up in a crowd and looked like she could take on any issue raised to her on the spot and discuss it with such depth. And, she *fought* Republicans, she didn’t waste time trying to hold their hands and do kumbayah. She was a proud liberal partisan. She just had that spark. She should have been the Edwards running for president.
Game Change, for whatever the yellow salacious paper it was printed on was worth (or not-so-much-worth), said she’s the one who pushed the campaign populist left, seemingly in extraction for her silence about his affair. I don’t trust the book’s version of events on its own merit, but I could see that very well being the case.
Its pathetic. go to salon and read the bit on george hw bush’s 92 campaign. this feels the same. every month bush would say see its getting a little bit better now. but clinton would say- people are hurting and its not getting better. too bad the gop doesnt have a clinton like guy there with compassion etc. telling people we hit a bump or whatever is nonsense. it all came to the stim bill for obama-once he watered it down to 800 mil many economists said we are screwed. it should have been 3 tril. 3. with economy a stake, his numbers then at 70pct approval why choose such a path almost sure to doom you and your country?
with al the deficit talk obama has himself in a box- looks detached and the gop looks mad.
watch those 2 corporate whores hoyer and biden in their dc realm craft a debt agreement so sick obama will have even mor eproblems- and so will we.
also there is no warm sunny figure out here to console a hurting nation. its odd- lots of cold stiffs thought. obama appears cold. the entire gop field is ice. austerity has no love for us. a stone cold natl leadership. were is the caring? that is what people miss right now. fdr had eleanor out there consoling the hurting america. bill clintonwas a master on empathy. where is the empathy?
We just closed the application process in my little city for City Administrator. We ended up with 85 resumes!!
These are college degreeded accomplished people.They are from banking, law, engineering, communications, sales, insurance, government. it is heart breaking. Many of them are in their late forties to mid fifties They have lost their way if life. I’m sure they are barely hanging on to their houses if at all,health insurance is outrageous for them unless they are covered by a spouse.
I feel so bad for them. They are trying their very best to re think their skills and apply them to what ever job is available. They are not slackers. Their divisions were eliminated or their branch closed, they lost elective office,their companies were bought out or moved.
I keep having fantasies of standing in the well of the Senate and screaming at them.What the hell are they doing to our country? Are they all dirt stupid or are they souless?
I don’t think we mean any more to Obama than the poor people in the villages of Indonesia that his mother dedicated her life to helping.
These are the same people who lost money on their 401K’s, too. They will need Medicare and Social Security more than ever and the media and Congress iare talking about cutting them or raising the retirement age????? Up is down and down is up, I guess. Most of them have no idea the reality that millions of everyday Americans are living in.
i agree!
I don’t think that “the American people”–or even the country itself– mean anything to our bought and paid-for politicians!