Team Obama Opposed Elizabeth Warren Nomination

I like to see how Obamabots frame this. Huffington Post reporter
Shahien Nasiripour cites sources that the Obama administration never had any intention of nominating Elizabeth Warren for the Bureau of Consumer Financial Protection. In 2010, Sen. Bernie Sanders asked President Barack Obama if would nominate Warren.

Last summer, during a White House meeting with first-term Senate Democrats, Sen. Bernie Sanders, an independent from Vermont, asked Obama whether he'd nominate Warren for the role.

Obama held up a half-full glass of water and told him: "That's the problem with you progressives. You see this as half-empty."

Obama's tone towards Sanders makes it obvious that the president does not view himself as a progressive. Wall Street got a bailout. Americans are being foreclosed upon through illegal means. The President campaigned on change and gets pissed when people call him out for protecting the dysfunctional financial system.

Rahm Emanuel made it clear that he did not want Warren confirmed.

Last July, the night before a Senate vote on the administration-backed bill to reform financial regulation, Sen. Ben Nelson (D-Neb.) told reporters that he was still unsure how he’d vote and was concerned about who might be named to run the soon-to-be-created consumer unit.

Hearing the news, Emanuel took the temperature of the administration on Warren's nomination and reported back to Senate Majority Leader Harry Reid that it was cool, according to Senate sources with knowledge of the call.

“We don’t like her either,” the then-White House chief of staff told the Nevada Democrat.

Ben Nelson's lack of support was unsurprising. Chris Dodd. Part of Dodd's problem was Warren publicly pushed back against Dodd to not soften the financial reform bill. Dodd was obsessed with getting bipartisan support for a financial reform bill that no Republican had any intention of voting for. What is it about Beltway Democrats that are obsessed with bipartisanship?

Treasury Sec. Tim Geithner is pro-corporatist. It wasn't surprising that he didn't support Warren's nomination. Warren also took Geithner to task for not knowing where money for credit default swaps went. AIG sold swaps and then couldn't cover the bets when the market crashed.

More on Rocket Docket Scam

I blogged about the "rocket docket" foreclosure courts in Florida. There is good indication that the David J. Stern law firm forged foreclosure documents. Judges in Florida foreclosure courts have been known not to review foreclosure documentation before evicting a homeowner. The problem became public thanks to Matt Taibbi's reporting in Rolling Stone.

Apparently, the problem has garnered the attention of the Treasury Department. Phyllis Caldwell, Chief of Homeownership Preservation Office, testified before the Senate Finance Committee.

The reports of "robo-signing", faulty documentation and other improper foreclosure practices by mortgage servicers are unacceptable. If servicers have failed to comply with the law, they should be held accountable. The Administration is leading a coordinated interagency effort to investigate misconduct, protect homeowners and mitigate any long-term effects on the housing market. While Treasury does not have the authority to regulate the foreclosure practices of financial institutions, nor to ensure that those practices conform to the law, it is working closely with agencies that do have such authority.

The Financial Fraud Enforcement Task Force, a broad coalition of law enforcement, investigatory, and regulatory agencies that brings together more than 20 federal agencies, 94 U.S. Attorneys Offices, and dozens of state and local partners, is working to ensure that foreclosure practices are thoroughly investigated and any criminal behavior is prosecuted. The Federal Housing Administration (FHA) has been reviewing servicers of loans it insures for compliance with loss mitigation requirements. Additionally, the Office of the Comptroller of the Currency has directed all large national bank servicers to review their foreclosure management processes – including file reviews, affidavit processing, and signatures – to ensure that the processes are fully compliant with all applicable state laws. The other independent banking regulatory agencies are doing similar reviews of institutions under their jurisdiction. Attached to my testimony is a fact sheet providing more detail concerning the activities of the coordinated interagency effort.

I hope Caldwell cracks down on these bogus foreclosures. We could be talking about millions who were thrown out of their homes because of shady legal practices.

Why Geithner & Summers Should Be Fired

I wrote this post on Twitter about John Boehner calling for President Barack Obama to fire Tim Geithner and Lawrence Summers.

@thereidreport Boehner asking for Geithner to be fired would have progressives press for a more Left-leaning Sec o Treasury.

Geithner backed executive bonuses for AIG bonuses. AIG CEO Edward Liddy told Congress Geithner knew about the bonus money executives were going to reward themselves. Time reported the New York Federal Reserve informed Geithner of the bonuses before the March 10, 2009 date Geithner gave Congress.

Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned "full details" of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.

Dodd tells CNN that the Treasury Department told him to take out amendment limiting executive bonuses.



As head of the New York Federal Reserve, records show Geither told AIG to take out references to key deals from regulatory filings. This is extremely unethical for a public servant to do. At the New York Federal Reserve, Geither negotiated the AIG bailout plan. Geithner is more aware than most of the financial troubles AIG is facing. Geither placed protecting AIG above the American public.

Geithner used AIG to funnel bailout money to cover Goldman Sach's naked credit default swaps losses. Goldman Sachs played a significant role in the mortgage meltdown. Goldman Sachs betted against the housing industry and attempted to collect on the CDS. AIG was too extended to pay when the 2009 Wall Street meltdown occurred. Both AIG and Goldman Sachs did a nose dive and the taxpayers were left with the bill. Geithner's response has been to protect these institutions from oversight.

Jon Walker of Firedoglake explains why firing Geithner and Summers is bad politics for the Republican Party.

House Minority Leader John Boehner (R-OH) has recently called on President Obama to fire Treasury Secretary Tim Geithner and Director of the National Economic Council Larry Summers. Now I don’t know how Boehner’s mother raised him, but where I come from, that behavior would be considered downright rude. Where is the gratitude? I think John of Orange owes them an apology. Trying to get the two individuals whose actions played a major role in assuring that Boehner will be promoted (to the position of Speaker of the House after Republicans win big this November) fired is just bad manners in my book. If it weren’t for Summers’ terrible economic projections and horrible advice, combined with Geithner’s equally bad counsel, consistently putting the prosperity of Wall Street over main street while horribly mismanaging the HAMP program, Boehner would not be close to measuring the drapes for the Speaker’s office.

Summers favors the current banking monopoly and urged Bill Clinton to sign the Gramm-Leach-Bliley Act. As President of Harvard, Summers made the sexist statement that women do not have the same "aptitude" as men to succeed.

Unfortunately, Geithner and Summers hold too much sway over the President. It is ashame because this maybe the only time I will ever agree with Boehner.

Change I Don't Want to Believe In

I want President Obama to fire Tim Geithner, but this isn't what I call change.

Speculation has also begun about potential employment for Dodd in the Obama administration.

For instance, several Democratic Senate aides noted that Treasury Secretary Timothy Geithner is an extremely unpopular figure in the Senate. Geithner has also taken the brunt of the criticism for the administration’s handling of the economy and, these sources speculated, if the country’s financial picture does not brighten before Election Day, he could be the first secretary to leave the administration.

Although Dodd would appear to be well-situated to take control of Treasury if the position were to open, it may not be smooth sailing for his nomination.

Dodd has been a recipient of the financial industry's generousity. Below is a list of the twenty organizations that been given the most money to Dodd's campaign. ActBlue is the only group that can be described as liberal. If Dodd does become Sec. of Treasury at least he will know all the lobbyists from the major banks.

1 Citigroup Inc
2 SAC Capital Partners
3 United Technologies
4 Royal Bank of Scotland
5 ActBlue $209,000 $209,000 $0
6 Bear Stearns
7 American International Group
8 Merrill Lynch
9 Goldman Sachs
10 Credit Suisse Group
11 Morgan Stanley
12 Travelers Companies
13 JPMorgan Chase & Co
14 The Hartford
15 Hartford Financial Services
16 St Paul Travelers Companies
17 General Electric
18 FMR Corp
19 Ernst & Young
20 Bank of America

Chris Dodd Retires, Blumenthal In

Good news for Democrats: Sen. Chris Dodd will not seek another term. Connecticut Attorney General Richard Blumenthal will run in the Senate primary. Blumenthal has a 78 percent approval rating in the state. It is no secret Republicans were looking to puick off Dodd's seat. Blumenthal makes that task extremely difficult.

Public Policy shows that Blumenthal even polls well with Republicans.

Democrats - 71 percent

Independents - 60 percent

Republicans 37/35 margin

Dodd Fact-Checks Republicans

Sen. Chris Dodd blasts Republicans for false claims that they were not included in the health care bill writing process. Dodd proves this by noting Sen. Mike Enzi wrote 41 amendments to the Senate bill. He notes the irony of Republicans wanting to help write a a public option health care bill. Republicans stating from the get go they would not vote for any bill containing the public option.

Is This Change?

Treasury Sec. Tim Geithner has funneled repaid bailout through AIG to pay Goldman Sach's naked credit default swaps. Repaid bailout money was suppose to be given to community banks to loan out to small businesses.

The President increased the Defense Department budget by 4 percent.

The White House has been against Sen. Chris Dodd's attempts to reform the Federal Reserve. The current administration desperately wants to protect the status quo of the financial and insurance sectors that caused the recession.

So must for "change." I know we are in a economic crisi but it would be nice if Obama pretended to care about spending. Actual caring is another matter.

Why Reforming the Banking Industry Is Most Important Issue

Reforming the banking industry is the most important matter facing America. The issue takes precedence over health care. There is of financial safety net to more systemic risks from occuring. The Senate Banking, Housing and Urban Affairs committee is tackling the problem. Chairman Chris Dodd has unveiled the ambitious Restoring American Financial Stability Act. The bill would stop regulatory and prevents financial institutions from becoming too big to fail. The bill is already being opposed by the banking industry and Senate Republicans.

Dodd has a long way to go if he wants to win support from the Republican leader. Senate Minority Leader Mitch McConnell (R-Ky.) came out swinging last week, sharply criticizing a proposal he said was not supported by any Republican.

“I don’t think the public is clamoring for us to pass yet another thousand-page bill, and I’m not sure where they’d find the time to do this on the Senate floor, since it’s obvious health care’s going to be the dominant issue for the coming months,” McConnell said.

Republicans do not want to see reforms of the deceptive lending practices being used on mortgages and credit cards. That is exactly what the proposed Consumer Financial Protection Agency would do. The agency would operate as an independent watchdog and inform the public and have the power to stop "hidden fees, abusive terms, and deceptive practices." The bill would end the oversight role of the regional Federal Reserve banks. The banking industry picks those regional Chairman. Former Federal Reserve Bank of New York chairman Tim Geithner has been against a proposal to make the chairmen federal appointments. Dodd proposes a single Federal Bank regulator.

Eliminates the convoluted system of multiple federal bank regulators to increase accountability and end unnecessary overlap, conflicting regulation, and “charter shopping;” keeps in place the healthy dual banking system that governs community banks.

A huge potential hurdle to the bill's passage is a allowing shareholders to have a vote in executive compensation and corporate affairs. Dodd wrote legislation that would cap the executive bonues, of companies receiving bailout money, at $100,000. Geithner had the provision stripped from the legislation. Dodd took heat and Geithner didn't admit he was responsible. Only after Dodd told the media that the Treasury Department pushed to strip the provision was when Geithner stepped forward.

The Dodd bill would give the newly created Consumer Financial Protection Agency the power to investigate and enforce banking regulation. Dodd's idea is this will consolidate federal agencies and decrease red tape. The FDIC and the Federal Reserve will give up their regulatory responsibilities.

The FDIC will focus on its jobs as deposit insurer and resolver of failed institutions, retaining backup examination authority over troubled banks and gaining additional authority to accompany the new agency on examinations of healthy banks and holding companies to ensure it has sufficient information to perform its insurance functions. The Federal Reserve will focus on monetary policy without being distracted by responsibilities for bank oversight and consumer protections. The Federal Reserve will continue to play a key role in assessing financial stability and have guaranteed access to financial institutions and any needed information.

The White House is not thrilled with Dodd's proposal.

Austan Goolsbee, who sits on the White House's Council of Economic Advisers, said he felt some "nervousness" about Dodd's proposal to create a committee independent of the Federal Reserve to oversee risks in the financial system and police potential threats to the economy.

"The administration's view is that systemic institutions ought to be governed by the Fed," Goolsbee said. A different group could be charged with looking at problems on the horizon, "The Dodd version is 'let's combine both of those and create some new agency,'" he said. "I am a little worried that to create that new agency would take a long time and by the time you got to that we are back into this world."

This is the same White House that has been telling Harry Reid to drop the public option, but still supports mandating that every American buying health insurance. The White House is pro-corporatist. The Republicans look at Wall Street as their true base. Reforming the financial industry should have been the first issue both parties addressed when President Obama was sworn into office. America does not have the money for another bailout and the economy is (finally) recovering too slowly. The anger from progressives and tea party protesters is from Washington's bailing out the banking industry. People are scared and turning to clowns like Glenn Beck and conspiracy theories for answers. The public needs to get behind the Restoring American Financial Stability Act. Free markets are a wonderful thing. However, another economic meltdown is not an option.

Obama & Democratic Party Split

Rep. Alcee Hastings got 76 Democrats and Republican Ileana Ros-Lehtinen to sign a letter urging President Barack Obama to halt the discharge of gay and lesbian military personal under "Don't Ask Don't Tell."

The United States of America prides itself on having the finest military in the world because of the hard work, dedication, and sacrifices of our brave servicemen and women. And yet, under 10 U.S.C. § 654 (Policy Concerning Homosexuality in the Armed Forces), better known as "Don't Ask, Don't Tell," the talents and contributions of our openly gay, lesbian, bisexual, and transgender (LGBT) service members continue to be ignored simply because of who they are. Every day, we lose approximately two service members to this misguided, unjust, and flat-out discriminatory policy. Don't Ask, Don't Tell is not only an injustice to them, but a disservice to the U.S. military and our country as a whole.

I don't expect Obama to change "Don't Ask Don't Tell." It is fascinating watching America go through a cultural shift. Sen. Chris Dodd has come out in favor of gay marriage.

I believe that effective leaders must be able and willing to grow and change over their service. I certainly have during mine - and so has the world. Thirty-five years ago, who could have imagined that we'd have an African-American President of the United States?

My young daughters are growing up in a different reality than I did. Our family knows many same-sex couples - our neighbors in Connecticut, members of my staff, parents of their schoolmates. Some are now married because the Connecticut Supreme Court and our state legislature have made same-sex marriage legal in our state.

But to my daughters, these couples are married simply because they love each other and want to build a life together. That's what we've taught them. The things that make those families different from their own pale in comparison to the commitments that bind those couples together.

And, really, that's what marriage should be. It's about rights and responsibilities and, most of all, love.

The Democratic Party is moving to the Left of Obama on LGBT issue. Part of the reason is Obama reneging on his promise to repeal "Don't Ask Don't Tell" and his support for the DOMA. I'm sure that is not what the President had in mind.

Pay to Play

The Pay For Performance Act passed in the House of Representatives. The bill only covers companies that have received TARP money. Fox News Neil Cavuto went nuts trying to get Alan Grayson to define how much a bonus would be unjust. Cavato asked if a secretary could be denied a bonus. Grayson doesn't say what amount would be deemed inappropriate. The bill states any employee is subject to the Pay For Performance Act.

‘(1) PROHIBITION- No financial institution that has received or receives a direct capital investment under the Troubled Assets Relief Program under this title, or with respect to the Federal National Mortgage Association, the Federal Home Loan Montrtgage Corporation, or a Federal home loan bank, under the amendments made by section 1117 of the Housing and Economic Recovery Act of 2008, may, while that capital investment remains outstanding, make a compensation payment, other than a longevity bonus or a payment in the form of restricted stock, to any executive or employee under any pre-existing compensation arrangement, or enter into a new compensation payment arrangement, if such compensation payment or compensation payment arrangement--

Sec. of Treasury Tim Geithner will decide what bonuses are excessive.

‘(B) PERFORMANCE-BASED STANDARDS- Standards for performance-based measures that a financial institution must apply when determining whether it may provide a bonus or retention payment under paragraph (1)(B). Such performance measures shall include--

‘(i) the stability of the financial institution and its ability to repay or begin repaying the United States for any capital investment received under this title;

‘(ii) the performance of the individual executive or employee to whom the payment relates;

‘(iii) adherence by executives and employees to appropriate risk management requirements; and

‘(iv) other standards which provide greater accountability to shareholders and taxpayers.

Geithner admitted the Treasury Department had conversations with Chris Dodd's about the bonus loophole. Dodd said the Treasury Department wanted a bonus loophole for TARP recipient. Geithner claims ignorance to these conversations.

"I would have preferred that we kept my language, as it left the Senate unanimously," Dodd added. "In fact there were objections when I wrote the language even before it left the Senate. ... The administration expressed reservations with the amendment. They came to us and asked for modifications in the amendment. The alternative was, of course, losing the amendment entirely, which was a possibility. I didn't want to see that happen. I suspect we would be having a conversation tonight why we didn't include some language in here to deal with bonuses, golden parachutes and the like. ... I don't believe anyone had any idea, I certainly didn't, that a month and a half later from February we would be talking about AIG and the bonuses they are receiving for their retentions, these $165 million. So that was never a part of the consideration."

Grayson's bill is too vague and counts on Geithner to due diligent oversight over bonuses. Geithner already had one chance to curb excessive bonuses and passed. This bill is so bad that I find myself agreeing with Cavuto.

Side note: I doubt much arm twisting was needed to have Dodd write the loophole.

Politically, Democrats can say they went after greedy companies and label Republicans out of touch. From a policy perspective: the bill won't make much of a difference.

The Bailout

The Wall Street Journal op-ed must be read to be believed.

Last week, we did our best to destroy the financial system but somehow came through it. This week, Congress will have only 72 hours to ruin the Treasury’s $700 billion mortgage plan before it recesses.

If our luck holds, Hank Paulson will get the extraordinary authority he seeks. If we are really lucky, Paulson may actually fix the mess we have made. So why not give him whatever he needs?

1. Because the bill would make Paulson a federal CEO of lending instituions. Questions remain on what the Sec. of Treasury would do with those piowers.

2. The bailout will create a bigger federal deficit. The Federal Reserve will have have to borrow money to buy the mortgages. The Fed and taypayers eat the loss if the mortgage values depreciate.

3. Greater regulation is needed to make sure future bailouts aren't needed. Taxpayers can't afford to continulously bailout lending institutions. The market rewards selling mortgages to people that can't financially afford a home. Banks sell that debt off as assets. A flow of credit that eventually has to be paid.

4. The Paulson plans is a band-aid. Nothing will be changed by a bailout. Except temporary security; until the sky falls again.

Paulson's plan appear to be dead. Senator Chris Dodd has offered an alternative plan. Economist Paul Krugman likes the plan. The issue is regulation over the mortgage industry.

Lawmakers from both parties, while acknowledging the urgency of the moment, nevertheless object to giving what they characterize as a "blank check" to Treasury Secretary Henry Paulson to buy troubled assets from financial institutions. They want provisions that would explicitly protect taxpayers.

"We don't have a lot of time. We want to act but we want to act responsibly," said Senate Banking Committee Chairman Christopher Dodd, D-Conn., at a press briefing Monday afternoon.

Republican operative Patrick Ruffinni urged GOP candidates to use the bailout as a political issue and vote against it. Ruffinni has taken the post down from his blog. Kos, Digby, and Ed Kilgore pointed out how Ruffinni gleefully wanted to turn a disaster into an opportunistic wedge issue.

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

This creates pressure on the "change" message. If this issue is made controversial, and Obama is not the first to make it an issue, how exactly is a Washington deal backed by Bush's Treasury Secretary "change?"

But for this to be actionable, it has to be controversial. So this can't be a few lonely voices like Coburn and DeMint. It needs to be the bulk of the Republican conference. In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.

Ruffini is one of the smartest young GOP operatives. There is good reason to believe Republicans will vote against any bailout package. It's easier to watch Rome burn and blame the Democrats for not putting out the fire.