Daily Archive: 01/11/2012

Jan 11 2012

Congressional Game of Chicken: Recess Appointment A Dilemma

President Obama’s recent exercise of his constitutional authority to make recess appointments to the new Consumer Financial Protection Bureau and filling vacancies the National Labor Relations Board has created some dilemmas for himself and congressional Republicans. Republicans, of course, will continue to block confirmation of any Presidential appointee but are split as to how to address President Obama’s dismissal of the sham “pro forma” sessions and his four recess appointments.

With the appointment of Jack Lew as Chief of Staff, there is now a vacancy to head the Office of Budget and Management but the bigger issue may be the vacancy for a new director to the Federal Housing Finance Administration. That institution has been without a confirmed director for over two years, since David Lockhart left. The president is being pressured by the House Congressional Delegation from California to replace the Republican acting director of the FHFA, Ed DeMarco, who they say has been obstructing efforts to stem the housing market collapse and help keep owners in their homes. David Dayen at FDL News Desk reports that he is of two minds on DeMarco:

(DeMarco) has interpreted his mandate very narrowly. It’s a bad thing when he refuses to engage in principal reductions for troubled borrowers, even though that would make more money for Fannie and Freddie in the long run, because he doesn’t want to take the short-term financing hit. But it’s a good thing when he sues 17 banks over misrepresentations of the mortgages in the securities they sold to Fannie and Freddie, with the hope of forcing repurchases of those mortgage pools.

There have been signs that DeMarco is warming to a more activist stance. He agreed to the changes to HARP, which is more of a stimulus program than a program that will save homes, but which will allow expanded refinancing come March of this year on GSE-owned properties. Freddie Mac just initiated a program for a 12-month forbearance (where the borrower can skip payments) for unemployed borrowers, although Democrats maintain that not everyone eligible will receive that forbearance.

Most promisingly, DeMarco is considering a principal pay-down program put forward by a California Democrat, Zoe Lofgren, that would allow underwater homeowners with GSE loans to have their mortgage payments go entirely to equity for five years, waiving the interest payments. DeMarco said he would look into the idea back in October, and there have been leaks since then suggesting that principal pay-down would happen. However, there has been no final word, and officially FHFA “continues to evaluate” the Lofgren proposal, even though in a meeting with House Dems they promised an assessment within two weeks.

Meanwhile those poor Republican obstructionists have a headache, as Brian Buetler at TPMDC reports:

Scores of House Republicans have signed on to a non-binding resolution disapproving of Obama’s four winter recess appointments – Cordray, and three members of the National Labor Relations Board – all fodder for conservatives, who are furious about the existence of these agencies, let alone the recess appointments themselves.

“It’s astounding to me that the president is claiming these are recess appointments and within his authority, when Congress was not in fact in recess,” said Rep. Diane Black (R-TN) who authored the resolution. “These appointments are an affront to the Constitution. No matter how you look at this, it doesn’t pass the smell test. I hope the House considers my resolution as soon as we return to Washington so we can send a message to President Obama.”

This creates an election-year dilemma for GOP leaders who may not want to make a big show of their opposition to the one person in Washington tasked with protecting consumers from predatory financial actors.

But with so many key vacancies, President Obama has his own dilemma headache, not just to make more recess appointments but how to do it:

[T]he breaks between the last week in January and the first week in August will be very brief ones. Which means that if Obama declines to use his recess appointment power in the next several days, he’ll have three options, none ideal: He can fight it out with Congress and push for regular confirmations; he can wait until August, when Congress goes home for over a month; or he can broaden the parameters of his own precedent, and use the recess appointment during brief one-week vacations between now and then.

Republicans will likely keep holding pro forma sessions during those breaks, challenging Obama to take things further than he already has. [..]

As far as the Constitution and the Senate rules are concerned, there wouldn’t be much difference between a recess appointment in, say, April, and the recess appointments he announced last week. But their public rationale for the January appointments wouldn’t really stand in April. And after attacking President Obama’s supposed power grab, Republicans would slip the precedent in their back pocket, to be deployed when they control the White House.

We shall see if the president has finally abandoned all hope of getting any bipartisan cooperation from the Republicans.

Jan 11 2012

Some EU Countries Agree To Tax Financial Transactions

French President Nicholas Sarkozy took the initiative to address France’s rising deficit proposing a small tax on financial trans actions that was proposed by the European Commission last September and he has won the backing or German Chancellor Andrea Merkel:

The French government, long a proponent of the tax, stepped up its campaign last week, going so far as to suggest that France would impose the levy even if others didn’t. At a joint press conference in Berlin with Sarkozy today, Merkel threw her weight behind the tax.

“Personally, I’m in favor of thinking about such a tax in the euro zone,” Merkel said. “Germany and France both equally view the financial transaction tax as a correct response.”

The European Commission in September suggested a tax of 0.1 percent on equity and bond transactions, and 0.01 percent on derivatives, which it said could raise 55 billion euros ($71 billion) a year. European Union finance ministers are due to discuss the levy in March.

French Prime Minister Francois Fillon said today in Paris that France may present a bill on such a tax in February, hoping that other countries follow.

“Someone has to be the first to jump in the water,” he said.

The new Italian Prime Minister Mario Monti has also signed on to the proposal which had been opposed by his predecessor, Silvio Berlusconi, but did so with a slight reservation:

Italian Prime Minister Mario Monti on Wednesday threw his support behind a new tax on financial transactions, backing a push by Germany and France, but said he would prefer to have it apply across the whole European Union. [..]

“We are open to supporting this initiative at the EU level,” Mr. Monti said at a news conference with Mrs. Merkel during his first visit to Berlin since taking over from Silvio Berlusconi in November.

While the Berlusconi government had rejected a new financial levy outright, Mr. Monti has said he thought it was a good idea, particularly as a means of reducing the tax burden on families.

Opposition to the tax is coming from British Prime Minister David Cameron:

(S)uch measures can scare away big-scale investment companies headquartered in the City of London.

In an interview to the BBC Mr. Cameron said that “the idea of a new European tax when you’re not going to have that tax put in place in other places, I don’t think is sensible and so I will block it unless the rest of the world all agreed at the same time that we were all going to have some sort of tax.”

To put it bluntly, getting “the rest of the world all agreed at the same time” is not bloody likely.

And of course the French banking community is dead set against it claiming that it will “would weigh on growth, lead to a loss of competitiveness, and create a heavy handicap for the financing of the French economy.”

Mr. Sarkozy has political motivations for his backing of this tax since he is facing a particularly tough reelection this Spring. However Ms. Merkel’s may be moving to stave off a slow down in Germany’s economic growth

Germany expanded by 3 percent last year from 2010, the Federal Statistical Office said in Wiesbaden. It noted, however, that the growth came mostly in the first half of 2011, and estimated that the economy actually contracted by about 0.25 percent in the fourth quarter from the prior three months.

Some economists now predict another contraction for Germany in the first three months of 2012, which would meet the usual definition of a recession as two consecutive quarterly declines in output.

Whether this small tax on has any affect on either the French election or the German economy remains to be seen but it is encouraging that some leaders who were opposed to sensible taxation of the 1% are coming around. Now if we could just get them off the austerity boat.

Jan 11 2012

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

Katrina vanden Heuvel; Extremist in pinstripes

Mitt Romney’s dead heat with Rick Santorum in the Iowa caucuses bolstered the media narrative that Mitt Romney may not be conservative enough for Republican primary voters. This characterization serves Romney well. His rivals carve up each other, hoping to emerge as the conservative “alternative” to Romney. And vast swaths of the media discount his reactionary views, anticipating his “pivot” to more moderate positions once the nomination is secured. In reality, Romney is a remarkably reactionary candidate, camouflaged in corporate pinstripes.

On social issues, Romney embraces all of the right’s litmus tests. He pledges to repeal President Obama’s health-care reform, even though it was modeled on the plan Romney signed as Massachusetts governor. He favors repealing Roe v. Wade, outlawing women’s right to choose. He supports an amendment to make same-sex marriage unconstitutional. He’s for building a fence on the U.S.-Mexican border, opposes any path to legal status for the millions of undocumented immigrants in this country and rails against the Texas policy to offer in-state college tuition for the children of undocumented workers. Advised on legal matters by the reactionary crank Robert Bork, he repeatedly calls for more judges in the activist right-wing tradition of the gang of four – Scalia, Thomas, Roberts and Alito.

Michelle Chen: States Attempt to Instill ‘Work Ethic’ by Rolling Back Child Labor Protections

It’s been a long time since the engines of American industry were driven by tiny fingers. So when Newt Gingrich recently proclaimed, “Young people ought to learn how to work,” and suggested that children could develop a strong work ethic by working as janitors in their own schools, many Americans probably missed the throwback to the early twentieth century, when hundreds of thousands of children toiled in factories. But after decades of campaigns against youth exploitation, the right is rekindling vestiges of the sweatshop era with legislation aimed at rolling back child labor laws.

While they didn’t go so far as to recruit tweens back to the factory floor, throughout 2011 state legislators pushed bills to erode regulation of youth employment. Maine Republicans sought to ease protections for young workers with amicably named legislation to “Enhance Access to the Workplace by Minors.” The original bill, introduced by State Representative David Burns, would remove some limits on working hours for teenagers and expand the number of days a youth under 20 could work for $5.25 an hour-to about half a year. That would be a bargain for employers, who pay adult Mainers a minimum wage of $7.50. Last summer, a more limited teen labor bill passed, which only eased restrictions on working hours.

Mary O’Brien: Occupy US Health Care

After wincing a bit from the free flu shot, my young patient turned to me and said, “What you’re doing here is awesome – it’s so hard get health care!”

“Here” happened to be New York City’s Zuccotti Park in mid-November, the epicenter of Occupy Wall Street, just days before the encampment was broken up by hundreds of Mayor Michael Bloomberg’s armor-clad police in the dead of night. But it could have been anywhere in the United States.

Health care is in fact increasingly unaffordable for the 99 percent. More than 50 million Americans lack health insurance and thus reasonable access to treatment. A recent Harvard study showed about 45,000 excess deaths annually can be linked to lack of insurance.

Even people with insurance face formidable barriers to care like rising co-pays and deductibles. As a result, they are putting off care, getting sicker and ending up in our emergency rooms with serious complications – often facing crushing medical bills later.

Miriam Pemberton

: Obama’s New Military Strategy Doesn’t Add Up

We’re Not Stepping Down From Being the Planet’s Top Cop

President Barack Obama ordered up yet another strategic review last year. This one explicitly aimed at bringing the nation’s military posture into line with something we can afford.

In response to that review, his administration forged a plan, unveiled during the first week of the year, which takes a few modest steps in the right direction. The job description for our self-appointed role as world policeman will be trimmed a bit. We won’t be patrolling everywhere all the time, but we’ll be doing something more like check-ins in places like Latin America and Africa. Some of those U.S. troops that have been guarding Europe since World War II will probably come home. The Army and Marine Corps will shrink modestly. There’s a verbal commitment, at least, to share more responsibilities with allies. And we’ll cut a few more Cold War weapon systems. That’s probably a safe move, now two decades since the Cold War ended.

Stephanie Penn Spear: Fracking, Keystone XL, Mountaintop Removal and More

On Jan. 10 at 1 p.m. on the west lawn of the Ohio Statehouse in Columbus, Ohio, concerned citizens from all over the state will gather to ask Gov. Kasich to impose an indefinite moratorium on Ohio’s oil and gas wastewater injection well sites and the natural gas extraction process that has become well-known as fracking, until further research and proper regulations are put in place to protect human health and the environment.

This protest is in response to the 11 earthquakes that have hit the Youngstown, Ohio area since March 2011. The most recent earthquake, with a 4.0 magnitude that was felt nearly 200 miles away, shook the community on New Year’s Eve. Won-Young Kim, a research professor of seismology geology at Columbia University who is advising the state of Ohio on the Dec. 31 earthquake, said that circumstantial evidence suggests a link between the earthquake and high-pressure well activity. Kim believes that the recent earthquake did not occur naturally and may have been caused by high-pressure liquid injection related to oil and gas exploration and production.

Maureen Dowd: A Perfect Doll

As chief executive of Bain Capital, Mitt Romney was all about cold analysis and hot profits.

He took a rare personal interest in one of his investments: the Lifelike Company, which produced My Twinn dolls, fashioned to look like the little girls who owned them.

As Mark Maremont reported in The Wall Street Journal on Monday, Romney invested $2.1 million in 1996 for a stake in the company; the idea was brought to him by a Lifelike partner who was a friend from Brigham Young University and Harvard Business School.

Romney, who accuses President Obama of “crony capitalism” on the Solyndra deal, introduced his brother-in-law to Lifelike officials, who dutifully hired the relative and promoted him to vice president with an annual salary of $100,000.

Jan 11 2012

FL IG: Nothing to See Here. Move On

The Florida Inspector General, Jeff Atwater issued a statement (pdf) deciding not to investigate the forced resignation of two lawyers who led a crackdown on foreclosure fraud. The report concluded that no one in the office of Florida Attorney General Pam Bondi broke any laws or rules.

naked capitalism‘s Yves Smith explains the “hatchet job” that this report reveals:

Now narrowly, there may indeed be nothing to investigate relative to their firing, in that workers in the US have pretty close to zero rights and a boss can indeed fire someone simply for not sharing his sense of priories. But there is a more general question of public interest as to whether a firing in a public office was indeed politically motivated, particularly if the investigators were ruffling the feathers of parties that the AG did not want to annoy (and as the brief one page conclusion notes, Florida does have statutes against “misuse of a public position” but query how that is interpreted in practice).

Effectively, this “review” is an effort at reputation/character assassination via the release of pretty much only one side of a “he said, she said” (Clarkson and Edwards were given a brief phone interview which was limited to two conversations Lawson had with them about their performance; they were given no opportunity to contest the allegations made in the subsequent interviews, which were not just with Lawson, Conners, and Muniz, but also five other members of the AG’s office).[..]

To put it mildly, if you read the 85 page document and didn’t know the context (the extensive, widespread evidence of bad conduct and strained pleadings by the foreclosure mills and LPS, and the prior tip top reviews received by Clarkson and Edwards), you’d think they were fuckups of the first order and were lucky to have jobs. This is heresay presented as unvarished truth, and the unsupported (and as we will discuss later, often obviously untrue or at best misleading) charges extend to two Florida foreclosure fraud investigators, Lisa Epstein and Lynn Szymoniak. [..]

For clarity and overview of just how the Florida Attorney General’s office has become so corrupt, David Dayen at FDL explains how the departure of the an old school Republican as AG and, at the same time, the resignation of economic crimes division led to the whitewash of the firings:

(Bill) McCollum left the AGs office in January, replaced by a different Republican, Pam Bondi. At the same time, the longtime director of the economic crimes division left, and Richard Lawson, a former defense attorney for white collar criminals – mainly bank officials – came in. As Lawson acknowledges in his statement to the IG report (more on that in a minute), he received complaints from the lawyers of several of the defendants in Clarkson and Edwards’ cases, in particular Lender Processing Services (LPS), which was part of a multistate investigation at the time.

Lawson immediately went to work criticizing Clarkson and Edwards’ conduct, disputing their claims, savaging the work of their office, and micromanaging their investigations (but only the foreclosure fraud investigations, not their other work). By May they were out, fired by Lawson and Bondi. They were given 90 minutes to pack up their things and leave the office, and lost access to all their files and emails. [..]

The most potentially damning part of the IG report concerns a draft subpoena that was part of a multistate investigation against LPS. Lawson claims that Clarkson leaked the subpoena to Epstein, which Epstein contends was part of a public records request. Those can be done verbally in the state of Florida, but Lawson claims that there’s no record of it. Epstein added that she has received receipt of previous public records requests from the AGs office. In the case of the LPS subpoena, Lawson contends that it would not fall under a public records request. But Epstein says she never published a draft LPS subpoena, or circulate it to the media, and so it’s impossible for other state AGs to complain that “the subpoena came up on the blog.” Because Clarkson and Edwards have no access to their emails anymore, “it’s difficult to respond to the report.” Days after the alleged leak of the subpoena, Clarkson and Edwards were fired.

And the deeper that you look into the IG’s report the worse it gets. More from Yves:

Abigail Field’s post on how the Florida attorney general’s office befriends foreclosure fraudsters is an important, if nausea-inducing read. One of the striking sections that makes the extent of the corruption clear is a snippet toward the end. It show how the AG’s office acted to help Lender Processing Services do damage control, when it had LPS under investigation for foreclosure frauds.

Field points out that the investigation of LPS was launched under the previous AG, Bill McCollum, and is supposedly still active. [..]

Field goes through the current AG Pam Bondi’s fraudster-favoring conduct, which is less surprising than it ought to be, since the AG’s Economic Crimes Division has a proud history of being more in bed with probable criminals than against them. Here Field relies on the report of a former seven year staffer in the AG’s office, attorney Andrew Spark, who wrote after Bondi took office about the long standing considerable obstacles to serving the public interest, such as the all too predictable revolving door (with former employees going to foreclosure mills). While Spark made it clear that he was not a supporter of the aggressive Clarkson/Edwards position (these were the two employees we wrote about yesterday who were fired under suspicious circumstances), he nevertheless presents damning evidence in the section of his letter titled “Powerful interests have influence.”

The message, as Yves states, is very clear, doing your job efficiently in Florida will get you fired and your reputation destroyed because it’s more important to protect the banks than the homeowners they defrauded.

Jan 11 2012

On this Day In History January 11

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 11 is the 11th day of the year in the Gregorian calendar. There are 354 days remaining until the end of the year (355 in leap years).

On January 11, 1908, U.S. President Theodore Roosevelt declares the massive Grand Canyon in northwestern Arizona a national monument.

Though Native Americans lived in the area as early as the 13th century, the first European sighting of the canyon wasn’t until 1540, by members of an expedition headed by the Spanish explorer Francisco Vasquez de Coronado. Because of its remote and inaccessible location, several centuries passed before North American settlers really explored the canyon. In 1869, geologist John Wesley Powell led a group of 10 men in the first difficult journey down the rapids of the Colorado River and along the length of the 277-mile gorge in four rowboats.

By the end of the 19th century, the Grand Canyon was attracting thousands of tourists each year. One famous visitor was President Theodore Roosevelt, a New Yorker with a particular affection for the American West. After becoming president in 1901 after the assassination of President William McKinley, Roosevelt made environmental conservation a major part of his presidency. After establishing the National Wildlife Refuge to protect the country’s animals, fish and birds, Roosevelt turned his attention to federal regulation of public lands. Though a region could be given national park status–indicating that all private development on that land was illegal–only by an act of Congress, Roosevelt cut down on red tape by beginning a new presidential practice of granting a similar “national monument” designation to some of the West’s greatest treasures.

Grand Canyon National Park became a national park in 1919. So famous is this landmark to modern Americans that it seems surprising that it took more than thirty years for it to become a national park. President Theodore Roosevelt visited the rim in 1903 and exclaimed: “The Grand Canyon fills me with awe. It is beyond comparison–beyond description; absolutely unparalleled throughout the wide world …. Let this great wonder of nature remain as it now is. Do nothing to mar its grandeur, sublimity and loveliness. You cannot improve on it. But what you can do is to keep it for your children, your children’s children, and all who come after you, as the one great sight which every American should see.”

Despite Roosevelt’s enthusiasm and his strong interest in preserving land for public use, the Grand Canyon was not immediately designated as a national park. The first bill to create Grand Canyon National Park had been introduced in 1882 and again in 1883 and 1886 by Senator Benjamin Harrison. As President, Harrison established the Grand Canyon Forest Reserve in 1893. Theodore Roosevelt created the Grand Canyon Game Preserve by proclamation in 1906 and Grand Canyon National Monument in 1908. Senate bills to establish a national park were introduced and defeated in 1910 and 1911; the Grand Canyon National Park Act was finally signed by President Woodrow Wilson in 1919. The National Park Service, which had been established in 1916, assumed administration of the park.

The creation of the park was an early success of the environmental conservation movement; its National Park status may have helped thwart proposals to dam the Colorado River within its boundaries. (Lack of this fame may have enabled Glen Canyon Dam to be built upriver, flooding Glen Canyon and creating Lake Powell.) In 1975, the former Marble Canyon National Monument, which followed the Colorado River northeast from the Grand Canyon to Lee’s Ferry, was made part of Grand Canyon National Park. In 1979, UNESCO declared it as a World Heritage Site.

The Grand Canyon itself, including its extensive system of tributary canyons, is valued for the combination of large size, depth, and the exposed layering of colorful rocks dating back to Precambrian times. It was created through the incision of the Colorado River and its tributaries after the Colorado Plateau was uplifted and the Colorado River system developed along its present path.

Jan 11 2012

Dixville Notch

NH Quarter Live free or die!  I suppose I should mention in the sake of rice wine and full transparency that if I claimed it residency in the first post-colonial sovereign nation in the Americas could be mine.  Instead I’m an adopted son of the State of Benedict Arnold.

Richard and Emily’s Lake House is in a town just like Dixville and she does go to meeting there in the Congregational Church across from the General Store and next to the Free Library (sadly deficient in Bonapart references for a holiday term paper should you happen to get caught by a storm).

Outside of slushy ice which happens every winter, quadrennially the Circus comes to town.  Last time she voted for Hillary despite my advice to the contrary.  This year the 30 year veteran educator will not vote at all, once again against my advice.

I recommended Huntsman since if you’ve got to have a Republican you might as well have a sane one.