The mortgage settlement is an excellent example of Obama’s role in our lives. We elected him to reverse the rightward shift in our polity toward greater concentration of wealth and the destruction of the rule of law. Instead, he accommodates it. With the Republican opposition now in hock to the howling wolves of outright reaction, he manages to appear modestly sane and can thereby paint his dangerous lack of principles as reasonable compromise.
The state attorney generals’ mortgage deal with the banks stinks, and a lot of smart people have dismantled it. So there’s no need to belabor its shortcomings except to say that it’s another back-door bailout that rewards gross illegality and further undermines the workings of American capitalism and aggravates our country’s long-term decline. It was reached without any serious attempt at investigation, meaning that no significant leverage could be deployed in the negotiations, and no bankers feared prosecution (by contrast with the savings & loan scandal, which saw hundreds of perp-walks). It wrist-slaps the mortgage servicing companies for systematic, massive fraud on courts of law through robo-signing and falsification of documents, which would have been easy to prove had anyone in power wanted to do so. It allows the banks to play with other people’s money, cheat investors (ie, your pension fund and mine), resuscitate their second liens (home equity extractions), which should be worthless and written off, and generally enjoy a mile-high stack of Get Out of Jail Free cards.
But what is surprising is that Obama’s natural base is not nearly as fooled by this sell-out as was generally expected, including by me. I wouldn’t presume to make numerical estimates, but, to take one example, a lot of those who originally thought the State of the Union announcement of the New York A-G Eric Schneiderman-led task force was a triumph have now realized that it’s window-dressing. Take a look at Schneiderman’s Facebook page—there’s not a single comment cheering him on, which must have come as quite a shock to him after he enabled Obama’s PR stunt.
And after getting a raft of emails from a bunch of leftish online organizer sites, like Working Families and Color of Change, that initially gushed over the great ‘triumph’ of the people, the tone already has begun to shift. Typical is Matt Taibbi’s retraction of his early enthusiasm in Rolling Stone.
Taibbi cites the incomparable Yves Smith (Naked Capitalism) who was all over this story months ago when she laments that the fix essentially puts the mortgage biz on permanent federal life-support as part of the TBTF complex that now owns our state, and us. More disturbing in my view is the sweeping under the judicial rug of a vast conspiracy of white-collar looting perpetrated on defenseless working people from coast to coast. It is the exact and precise parallel of the dismantling of our civil protections against the arbitrary policing power of the state, endorsed by the Bush-Obama axis and ratified by a populace far more concerned with safety than justice. In both cases the price to be paid will be terrible.