Tag: TMC Politics

This is a state by state breakdown of the foreclosure settlement (h/t Yves Smith):

An astute observation from Lambert Strether:

OMFG, look at the weasel wording in the press release:

   “This agreement is very significant in how it addresses the fraud that these banks committed against many homeowners across our state,” said ___.” This agreement not only provides much needed relief to (STATE) [Ha ha, fill in the blank!!!] borrowers, but it also puts a stop to many of the bad [criminal] behaviors that contributed to the mortgage mess in our state and across the country.”

And then there’s “fraud that these banks committed.” So if it’s fraud (against whom?!) then why is nobody going to jail?

UPDATE Oh, I’m sorry. I forgot. Banksters never go to jail. A banana republic like ours has a two-tier system of justice, and banksters have impunity for all crimes. Unlike you, peasants. My bad, seriously.

And is definitely a top comment:

Google tells it like it is. I google the first phrase as a complete string, a la “This agreement is very significant in how it addresses the fraud“, and the first thing that comes up is indeed Tom Miller’s press release, from 9 minutes ago (10:44AM EST), and two or three down after that, links to Nigerian 419 scams, triggered by the similarities between the Miller’s wording, and the scripts of scam artists. Shocker!

(all emphasis mine)

Some of the propaganda (again h/t Yves Smith):

Settlement Graphic and Settlement Graphic

Click the links but first put all heavy and sharp objects out of reach.

“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”.

Robert Sheer: Elections Are for Suckers

Let’s just dip our fingers in purple ink and pose for photos now that voting has the same significance for us as it had for those Iraqis who got conned into thinking they were participating in some grand democratic experiment.

Our own elections, the ones our government has modeled for the world, are a hoax. What other word should we use to describe this year’s presidential election, whose outcome will turn on which party’s super PACs gets the most generous bribes from billionaires? The Republicans, enabled by decisions of a Supreme Court they still control, were the first out of the gate and are far more culpable in destroying our system of popular governance. But the Democrats, no less committed to winning at any cost to political principle, have now jumped in.

Gail Collins: Tales From the Kitchen Table

This is a really old story, but let me tell you anyway.

When I was first married, my mother-in-law sat down at her kitchen table and told me about the day she went to confession and told the priest that she and her husband were using birth control. She had several young children, times were difficult – really, she could have produced a list of reasons longer than your arm.

“You’re no better than a whore on the street,” said the priest. [..]

Organized religion thrives in this country, so the system we’ve worked out seems to be serving it pretty well. Religions don’t get to force their particular dogma on the larger public. The government, in return, protects the right of every religion to make its case heard.

The bishops should have at it. I wouldn’t try the argument that the priest used on my mother-in-law, but there’s always a billboard on the front lawn.

The biggest banks involved in mortgage fraud have agreed to a $26 billion settlement along with 49 states attorneys general. Oklahoma is the only hold out because the state’s Attorney General, Scott Pruitt, did not believe that the banks should face any penalty. The agreement will “help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.”

Yves Smith at naked capitalism notes that while the final terms of the agreement have not been released but some of the details have been leaked:

   1. The total for the top five servicers is now touted as $26 billion (annoyingly, the FT is calling it “nearly $40 billion”), but of that, roughly $17 billion is credits for principal modifications, which as we pointed out earlier, can and almost assuredly will come largely from mortgages owned by investors. $3 billion is for refis, and only $5 billion will be in the form of hard cash payments, including $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011.

   Banks will be required to modify second liens that sit behind firsts “at least” pari passu, which in practice will mean at most pari passu. So this guarantees banks will also focus on borrowers where they do not have second lien exposure, and this also makes the settlement less helpful to struggling homeowners, since borrowers with both second and first liens default at much higher rates than those without second mortgages. Per the Journal:

      “It’s not new money. It’s all soft dollars to the banks,” said Paul Miller, a bank analyst at FBR Capital Markets.

   The Times is also subdued:

       Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.

   2. Schneiderman’s MERS suit survives, and he can add more banks as defendants. It isn’t clear what became of the Biden and Coakley MERS suits, but Biden sounded pretty adamant in past media presentations on preserving that.

   3. Nevada’s and Arizona’s suits against Countrywide for violating its past consent decree on mortgage servicing has, in a new Orwellianism, been “folded into” the settlement.

   4. The five big players in the settlement have already set aside reserves sufficient for this deal.

Yves goes on to enumerate the top 12 reasons why this settlement really stinks. These are her top 5:

1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.

3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.

4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.

She goes on to explain how there are no constraints on servicers cheating to reduce their losses and will face no consequences when caught as in the past. With the law suits against Countrywide somehow “folded into the deal”, Bank of America, who is by far the worst offender in the chain of title disaster, gets a “special gift”: “that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced”. As David Dayen at FDL News Desk explains:

As far as the release goes, AG offices that signed onto the lawsuit claimed it was narrowly crafted to only affected foreclosure fraud, robo-signing and servicing (which I don’t feel is all that narrow, but I’m trying to just-the-facts this – ed). The lawsuit that New York AG Eric Schneiderman filed last Friday, suing MERS and three banks for their use of MERS, was preserved fully. There was a last-minute request by the banks to dissolve that lawsuit, but it was not successful. In addition, Schneiderman reserves the right to sue other servicers for their use of MERS along the same lines as the current lawsuit. [..]

Other lawsuits, like Delaware AG Beau Biden’s lawsuit against MERS, Missouri AG Chris Koster’s criminal indictments against DocX, and Nevada AG Catherine Cortez Masto’s suit against LPS and its employees would be able to go forward as well because the banks are not a party to them. However, it’s unclear whether any of those AGs will be able to work their way up the chain to indict bank officers for the same conduct; the likely answer, I assume, would be no. In California, Kamala Harris preserved the right for state officials and large pension funds to sue under the state’s False Claims Act over mortgage backed securities that later fell in value.

The status of Massachusetts AG Martha Coakley’s suit against five banks for foreclosure fraud is unknown. In all likelihood, the Nevada/Arizona suit against Bank of America for failing to follow their responsibilities in the Countrywide settlement will be folded into the deal.

In that settlement, BofA promised to deliver $8.5 billion in relief for Countrywide borrowers who fell victim to deceptive practices in the mortgage process. In reality, only $236 million was ever spent. Weak settlement terms allowed BofA to take credit merely for offering loan modifications to borrowers. And the Nevada suit alleged that BofA immediately started abusing borrowers who tried to get relief under the deal. But that suit is now gone.

As to the role of new Federal task force, if it were to be taken seriously this settlement should have not been completes until the task force’s investigation was finished. A good investigation takes charges that are easy to prove to help get the more evidence for the more difficult ones. By letting the banks walk. As Yves sees it, and she is correct, the investigations in Nevada and Missouri led to criminal charges and arrests that might have led to deals to catch the criminals “higher up the food chain.” There is plenty of evidence of bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges that has been ignored that could have led to a bigger settlement and prosecutions. By cutting a deal on robosigning the deeper chain of title problem has now been covered up making it even more difficult to address the on going fraud at high levels, the banks themselves.

So the bottom line is the banks have three years to hand out $5 billion in cash to about one million homeowners that will amount to about $2000 each for the loss of their homes through fraud. They will suffer no other consequences and there will be no further means to prosecute them, even if there is clear evidence of complicity in fraud related to robosigning. There is still the issue of 10 million underwater homeowners with $700 billion in negative equity that will continue to drag on the housing market and the economy for years to come. It would seem the Obama administration has once again screwed the vast majority of Americans to protect the Banks and Wall St. and his supporters are cheering this as another reason to reelect him. I see no reason for the Republicans to worry about another four years of Obama.

Up Date: If you’re one of the victims of the banking ghouls, you might not want to visit the new website for “The National Mortgage Settlement” The picture alone might make you want to do something you’d regret. The site details the agreement. David Dayen gives a brief synopsis of some of the gorier detail:

$750 million in a payment to the federal government;

$4.5 billion in direct payments to the states, of which $1.5 billion will go to those $2,000 checks to borrowers, and $2.75 billion to state foreclosure prevention services like legal aid, mandatory mediation and other programs. So the hard money comes to $5.25 billion.

$20 billion in “direct consumer relief”;

$3 billion to help current underwater borrowers refinance, and $17 billion in “credits” for principal reductions. HUD estimates that the dollar value of this will come to $32.3 billion in the end, as we’ve discussed. HUD Secretary Donovan has alternately said that a “substantial” amount of this money will come from MBS investor loans, and also that the large majority would come out of bank-owned loans. Also second liens have to be reduced along with firsts at least pari passu (on equal terms).

In addition, officials are touting the nationwide servicing standards that will be ushered in with this deal. Left out of this is the fact that the CFPB now has control over the servicing market, and can regulate national standards all by themselves.

The site mentions what the settlement doesn’t cover:

Release any criminal liability or grant any criminal immunity.

Release any private claims by individuals or any class action claims.

Release claims related to the securitization of mortgage backed securities that were at the heart of the financial crisis.

Release claims against Mortgage Electronic Registration Systems or MERSCORP.

Release any claims by a state that chooses not to sign the settlement.

End state attorneys general investigations of Wall Street related to financial fraud or the financial crisis.

We still don’t have any specific answers to the letter that Nevada AG Masto sent to the settlement negotiators. What Davyen finds really annoying is that the specific details haven’t been released to the  public who really deserves to know how badly they are being screwed.

I may have a separate article later as more specifics trickle down

“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: What We Learned From Planned Parenthood: Fighting Back Works

In 2010, when the right-wing echo chamber succeeded in destroying ACORN-a group Bill Moyers described as “more devoted to helping poor people become their own best champions” than any group he’d ever covered as a journalist-Senator Bernie Sanders offered this warning:

“These same forces drummed Van Jones out of the White House. The rightwing echo chamber is now two-for-two, and no one should have any illusions that it won’t be back.”

Sanders’ words proved prescient. Since 2010 Planned Parenthood-along with organized labor-has been a prime target of a well-funded and relentless effort by Republicans to dismantle and destroy progressive institutions. While the right might employ different tactics depending on the target, the goal is the same: take down progressive groups that have institutional strength.

Nancy Goldstein: Proposition 8 Is Unconstitutional. What’s Next for the Anti-Gay Law?

Today’s decision overruling Proposition 8 is deeply satisfying. The randomly assigned three-judge panel for the U.S. Court of Appeals for the 9th Circuit Court went beyond finding, 2-1, that Prop 8’s amendment of California’s state constitution failed the rational basis test and violated the Equal Protection Clause of the 14th Amendment of the United States Constitution. Judge Reinhardt’s 128-page decision also skewers the claims of Prop 8’s proponents to be protecting marriage, revealing their alleged concerns as nothing more than sheer mean-spirited prejudice tricked out as paternalism. To wit, “Proposition 8 served no purpose, and had no effect, other than to lessen the status and human dignity of gays and lesbians in California.”

This is rousing stuff and one of the biggest losses that anti-equality supporters have ever suffered. “Even though this is a narrow decision that applies only to California, it will return us to same-sex marriage in an important state – one that has 40 million people and a disproportionate influence on the politics and culture of the country,” says Dale Carpenter, law professor at the University of Minnesota.

This morning the US 9th Circuit Court of Appeals has ruled that California’s Prop 8 is unconstitutional striking down the ban on gay marriage under both the Due Process and Equal Protection clauses of the U.S. Constitution’s 14th Amendment. The ruling is limited and specific to California only.

“Proposition 8 served no purpose, and had no effect, other than to lessen the status and human dignity of gays and lesbians in California,” the court said.

The ruling upheld a decision by retired Chief U.S. District Judge Vaughn R. Walker, who struck down the ballot measure in 2010 after holding an unprecedented trial on the nature of sexual orientation and the history of marriage.

The ruling makes same sex marriage legal again in California but it is expected that the court will not permit marriages to take place while the appeals are in progress. The backers of Prop 8 have stated that they will appeal this ruling but have not said if they would request a the full 9th Court to hear the appeal or take it directly to the US Supreme Court.

Ninth Circuit Prop. 8 decision

“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”.

Joe Nocera; Poisoned Politics of Keystone XL

On Monday, Stephen Harper, the prime minister of Canada, traveled to China for a week of high-level meetings.  He brought with him a handful of his cabinet ministers, including Joe Oliver, his tough-talking minister of natural resources who, until recently, had been withering in his scorn for the opponents of the Keystone XL oil pipeline, which President Obama rejected a few weeks ago.  The pipeline, of course, was intended to transport vast oil reserves in Alberta to the American refineries on the Gulf of Mexico.

Oliver no longer talks so freely about the environmental critics of the Keystone pipeline; all of Harper’s ministers have been instructed to stop making comments that might be construed as interfering in the American presidential election.  But there are other, more diplomatic, ways to send messages.  Like going to China with your cabinet members and cutting energy deals with a country that has, as The Globe and Mail in Toronto put it recently, a “thirst for Canadian oil.”  Oil, I might add, that may be a little dirtier than the crude that pours forth from the Saudi Arabian desert – that is one of the main reasons environmentalists say they oppose Keystone – but is hardly the environmental disaster many suppose.

New York Times Editorial: The Payroll Tax Fight

Republicans in Congress seem to have forgotten the embarrassment they suffered late last year for trying to block a payroll tax cut for millions of wage-earners. The two-month extension they reluctantly approved will run out in three weeks, yet, again, they are stalling a full-year’s tax cut with extraneous issues and political ploys. [..]

Republicans, on the other hand, are only interested in extending the tax benefits for working Americans if they can punish other groups. They want to extend the freeze on wages for federal workers to a third consecutive year, and appeal to their base by barring the use of welfare debit cards at casinos and strip clubs. This is hardly a national problem; a few states have allowed that, but most have cracked down on it.

Republicans seem no more serious about cutting the tax and stimulating the economy than they were in December. They may be furious that President Obama is campaigning against a do-nothing Congress, but they don’t seem as if they’re planning to actually do something.

As the the multistate foreclosure settlement inches to some conclusion, the Big Banks have dropped the other shoe. They won’t sign on to the agreement unless Schneiderman drops his law suit against them and MERS. The proposed settlement would also require the attorneys general from Nevada, Massachusetts and Arizona to drop their litigation should they decide to sign onto the agreement:

Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement, a person familiar with the matter said. [..]

New York sued Bank of America, JPMorgan and Wells Fargo in state court in Brooklyn, saying their use of a mortgage database known as MERS led to improper foreclosures. Schneiderman said the banks’ use of the Mortgage Electronic Registration Systems database misled homeowners, undermined foreclosure proceedings and created uncertainty about ownership interests in properties.

The banks have asked that many of the claims in the complaint be thrown out, said the person. The other two banks involved in the nationwide settlement proposal, Ally Financial Inc. and Citigroup Inc., weren’t named in the complaint. [..]

The proposed settlement already requires Massachusetts, Nevada and Arizona, which have sued banks involved in the talks, to settle their claims, a person familiar with them said.

Nevada and Arizona each sued Bank of America over mortgage- servicing practices, accusing it of misleading consumers, while Massachusetts sued all five banks.

It appears that the agreement would give the banks immunity from prosecution and civil suits from mortgage origination fraud. The settlement does not prevent an investigation into mortgage securitization (secondary mortgage fraud), it would give the banks a free pass on all the fraudulent foreclosures and mortgages that are the primary cause of the housing market crash.

So where does this leave the new unit the President Obama created to investigate mortgage fraud? Professor of law and economics at the University of Missouri-Kansas City, Bill Black, spoke with Theresa Riley on Bill Moyers & Compnany:

The special new unit is a charade. There will be no prosecutions of any elite criminals. Obama has made sure of that.

Meanwhile the agreement is inching towards a conclusion with Iowa Attorney General announcing that 40 states have agreed to sign:

“The sign-on deadline for the proposed joint state-federal mortgage servicing settlement passed Monday with more than 40 states signing on,” Miller said “This enables us to move forward into the very final stages of remaining work.Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement.”

Delaware Attorney General Beau Biden, who spoke with MSNBC’s Dylan Ratigan, indicated he will sign on only if he can continue to pursue MERS and not be precluded from adding the banks from the suit.

Apparently Missouri’s Attorney General didn’t get the word about not filing suits. He not only filed a criminal lawsuit against DocX, one of the largest companies that provided home foreclosure services to lenders across the nation, for forgery in the preparation of documents used to evict financially strained borrowers from their homes but arrested Lorraine O. Brown, the company’s founder and former president.

Chris Koster, the Missouri attorney general, will prosecute the case. “The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitutes forgery,” Mr. Koster said in a statement. “Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters.”

Mr. Koster said his office’s investigation was continuing. This suggests he may hope to persuade Ms. Brown to cooperate in his investigation of the parent company. If convicted, Ms. Brown could face up to seven years in prison for each forgery count. DocX could be fined up to $10,000 for each forgery conviction.

Hey, Mr. President, this is what needs to be done on a federal level.

There is still no agreement on bailing out Greece as Greek Premier Lucas Papademos failed to get his government’s coalition parties to agree to the severe austerity terms set out by the European Commission, European Central Bank and International Monetary Fund:

After five hours of discussions, the three leaders of Greece’s national unity government had not accepted demands by international lenders for immediate deep spending cuts and labour market reforms as part of a new medium-term package.

Mr Papademos said the political leaders had agreed on some “basic issues”, including making spending cuts this year of 1.5 percentage points of gross domestic product, or about €3bn, according to a statement from his office. [..]

The talks with the three leaders of a national unity government came after the government failed to persuade the so-called “troika”- representatives of the European Commission, European Central Bank and International Monetary Fund – to ease conditions for the rescue deal.

Patience with Greek politicians has evaporated among its creditors. During a conference call on Saturday, eurozone finance ministers bluntly told Athens to deliver on its promises and agree to reforms or face default next month.

David Dayen at FDL News Desk points out that the Greeks are being asked to destroy themselves for a bailout and calls the terms “insane”:

The deal calls for Greece to run a primary budget surplus (not counting interest payments on debt) in 2013 of over 2% of GDP, rising to over 4% by 2014. That implies massive cuts to public spending in the middle of a 5-year recession, if not a depression. As Antonis Samaras, leader of the New Democracy Party, told the Financial Times, “They’re asking for more recession than the country can take.” Samaras also has highlighted that the troika seeks cuts in private sector wages as part of the deal, of up to 25%. There would also be a 35% cut in supplementary pensions.

Trying to pressure for a settlement that many Greek leaders feel would damage the Greek economy and prolong the five year Greek recession, French President Nicholas Sarkozy and German Chancellor Andrea Merkel issued statements and made a proposal that would reassure creditors:

Nicolas Sarkozy, French president, and Angela Merkel, German chancellor, also proposed that a special closed account be created for the interest due on Greek debt to reassure creditors that they would be paid.

“The situation of Greece has to be fixed once and for all,” Mr Sarkozy said after the two leaders met in Paris. He said the terms of a bail-out deal were “on the table” and called on all the main political leaders urgently to back them, adding “time is running out”.

“Our Greek friends must take responsibility and vote for the reforms to which they are committed. This concerns everybody – the prime minister, the leader of the socialist party and the leader of the [centre-right] New Democracy party.”

Ms Merkel added: “We want Greece to stay in the euro … but I also say there can be no new Greek programme if agreement is not reached with the troika [European Commission, European Central Bank and International Monetary Fund]. All those who bear responsibility in Greece must know we will not deviate from this position.”

She added: “Time is running short. A lot is at stake for the entire eurozone.”

The stalemate had its effect on stock markets today with US stocks taking a dip

The three major U.S. stock market indices retreated slightly on Monday as investors continued to await the outcome of a potential Greek sovereign debt deal with private creditors. At 2:30pm Eastern Time, the Dow Jones Industrial Average (DJIA) had lost 40 points, or 0.3 percent, to 12,822 while the NASDAQ Composite had backed down 0.2 percent to 2,899. Meanwhile, the S&P 500 was down 0.2% to 1,342 points.

The austerity measures have already caused a 6% drop in the GDP which increases the debt to GDP ratio. the last thing Greece needs, or for that matter Europe,is more austerity.

President Barack Obama has announced the appointment of Jeremiah Norton, a JP Morgan Chase & Co. executive, to the five-member board of the Federal Deposit Insurance Corp. once again putting an insider in  a position to protect the banks at the expense of tax payers. The announcement was made late Friday in the usual news dump but this is not new except that Norton is now the “official” nominee.

Jeremiah O. Norton, 34, who is an executive director in the bank’s JPMorgan Securities unit, previously served as a policy adviser in the U.S. Treasury Department during the administration of President George W. Bush. Before that, he was an aide to a Republican congressman, Edward Royce of California.

Norton joins two Democrats and a fellow Republican whose confirmations to FDIC leadership posts have been delayed by Senate Republicans who have complained that Obama used a recess appointment to install Richard Cordray, a former Ohio attorney general, as director of the Consumer Financial Protection Bureau without formal Senate approval. Cordray, in his role as consumer bureau director, also has a seat on the five-member FDIC board.

His name was mentioned back in late December in an article from the American Banker. In an article by bmaz at emptywheel

Oh, and in case you had any question on what side of the 1%/99% divide Barack Obama and his Administration are on, yet another answer was given today with the announcement of their proposed selection for the critical “independent” seat on the Federal Deposit Insurance Corporation (FDIC):

   The Obama administration is considering nominating Jeremiah Norton, an executive director for JPMorgan Chase’s investment bank, to sit on the FDIC’s board of directors.

Who is Jeremiah Norton? Well, as this quote states, he executive director of the investment banking shop and one of Obama’s buddy, Jamie Dimon’s, right hand men. Oh, and before that, Norton was former Goldman Sachs honcho Henry Paulson’s right hand man in the Bush Treasury Department and assisted Paulson in getting Goldman Sachs a backdoor bailout through AIG.

Norton was one of the chief architects of TARP who helped convince Paulson that the banks were “Too Big To Fail” and “helped craft the takeover of Fannie and Freddie” and he isn’t without opposition form the right:

Norton himself had initial doubts about the plan. “This is crazy,” he reportedly said at the time. But ultimately he and Jester sold Paulson on TARP, (Andrew Ross) Sorkin explains. “Based on the work of Jester, Norton, and assistant secretary for financial institutions David] Nason, [Paulson] wanted to forge ahead and invest $250 billion of the TARP funds into the banking system,” Sorkin wrote. Norton contributed similarly to the government takeover of Fannie and Freddie. “It was a difficult decision, the secretary didn’t want to be here, to go into the firms,” Norton [told C-SPAN in 2008. But, he concluded, “this action was necessary to prevent systemic risk that would harm the broader economy.”

Norton still might encounter some objections from the right, as both TARP and the government conservatorship of Fannie and Freddie have come under growing fire from the tea party wing of the GOP. What’s more, the Congressional Budget Office recently raised the cost of TARP in 2012, and the government control of Fannie and Freddie has extended well beyond the 15-month “timeout” that Norton, Paulson and others had originally envisioned.

This is the second time that the White House has taken the Senate GOP leadership’s advice on FDIC leadership, having already followed Senate Minority Leader Mitch McConnell’s (R-KY) recommendation to pick Thomas Hoenig for another key FDIC post whose nomination brings ant- TBTF positions to the table:

Hoenig is a vocal critic of large banks, technically known as “systemically important financial institutions,” or SIFI, under the recent Dodd-Frank regulatory reform of the financial system. Of course, they’re more popularly known as the “too big to fail” banks that are a focus of the Occupy Wall Street protests.

Under Dodd-Frank, the FDIC will be responsible for unwinding failing big banks.

In a June speech, Hoenig — who headed the Federal Reserve Bank of Kansas City — called those institutions “fundamentally inconsistent with capitalism.”

“They are inherently destabilizing to global markets and detrimental to world growth,” he said. “So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril.” [..]

Hoenig’s criticism of Fed policy made him a favorite among Congressional Republicans. Last fall, as Republicans prepared to assume control of the House after their midterm win, Hoenig was invited to speak to Republican members of Congress behind closed doors.

He also testified earlier this year before the House subcommittee on monetary policy chaired by Ron Paul, a noted Fed critic and presidential candidate, who would like to abolish the central bank altogether.

Republicans’ previous praise for Hoenig may make it difficult for them to block his confirmation, even if they oppose his views on the Volcker rule and bank regulation, said Boston University law professor Cornelius Hurley, a former counsel to the Fed Board of Governors.

“A brilliant political step, Hoenig’s nomination puts Senate Republicans in a very difficult spot in voting on his vice-chairmanship,” said Hurley. “His experience and point of view on systemic risk may foretell a pivot away from the failing policies of (Treasury Secretary)Timothy Geithner and (and former Obama adviser) Larry Summers toward more meaningful structural reform of our financial system.”

Obama keeps trying to make “deals with the devil” that will only continue toprotect the banks and harm the economy.  

“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”.

Paul Krugman: Things Are Not O.K.

In a better world – specifically, a world with a better policy elite – a good jobs report would be cause for unalloyed celebration. In the world we actually inhabit, however, every silver lining comes with a cloud. Friday’s report was, in fact, much better than expected, and has made many people, myself included, more optimistic. But there’s a real danger that this optimism will be self-defeating, because it will encourage and empower the purge-and-liquidate crowd. [..]

And every time we get a bit of good news, the purge-and-liquidate types pop up, saying that it’s time to stop focusing on job creation.

Sure enough, no sooner were the new numbers out than James Bullard, the president of the St. Louis Fed, declared that the new numbers make further Fed action to promote growth unnecessary. And the sad truth is that the good jobs numbers have definitely made it less likely that the Fed will take the expansionary action it should.

So here’s what needs to be said about the latest numbers: yes, we’re doing a bit better, but no, things are not O.K. – not remotely O.K. This is still a terrible economy, and policy makers should be doing much more than they are to make it better.

New York Times Editorail: Shall We Call It the ‘Bronze Standard’?

President Obama usually deserves high marks for his efforts to curb the spread of dangerous nuclear technology. But his administration’s decision not to insist on an important nonproliferation provision in nuclear cooperation agreements is a serious retreat.

Under American law, countries are required to negotiate detailed agreements before they are allowed to buy American nuclear reactors, fuel and services. The United States has signed many of them and many more are expected as additional countries pursue nuclear power.

The Obama administration set a rigorous new standard in 2009. It signed an agreement with the United Arab Emirates in which the U.A.E promised, in exchange for access to American technology, to forswear uranium enrichment and plutonium reprocessing. Those are the processes for making nuclear fuel for reactors – or weapons.