Tuesday, May 01, 2012

Is Obama AWOL on mortgage relief? Schneiderman replies

Is Obama serious about re-election? If so, why doesn't he show us?
by Ronald Bleier

  Daily News headline

Obama’s mortgage unit is AWOL

New York Daily News,  April 18, 2012,


The title of the New York Daily News op-ed tells much of the depressing story. Almost three months after President Obama’s announced his latest plan to relieve struggling homeowners, two activists sought out New York Attorney General Eric Schneiderman who was appointed by President Obama to co-chair a new mortgage relief task force.

Mindful of Schneiderman’s reputation for standing up to pressure from the Obama administration, the authors of the op-ed, Mike Gecan and Arnie Graf, were among many who hoped that at long last, the president was indeed serious about “speeding assistance to homeowners.”  The authors remind us that there are reportedly 12 million homeowners who are a collective $700 billion underwater. We also learn that this latest task force, called the Residential Mortgage Backed Securities Working Group, is the sixth such mortgage task force created since Obama took office in 2009.

Their sad, but unsurprising, finding is that Obama’s use of the word “speed” is belied by contrary information. Interviewing Schneiderman in early March and then again in early April, the authors learned that the attorney general had traveled especially to Washington twice to oversee his task force responsibilities. Both times he found that there was “no office, no phones, no staff and no executive director for his task force.” The authors report that the total staff hired in all five previous groups was ONE.

As we stand in awe at the administration’s brazen chutzpah, it would seem difficult to exaggerate the implications of Obama’s inaction on an issue so fraught for the economy and for his re-election--but I’ll try. Obama’s handling of the mortgage issue is part of a larger pattern of willful neglect and is consistent with policies that suggest little or no White House interest in spurring the larger economy.

Chief among those polices has been President Obama’s continuation of the ruinous tax cuts of the previous administration.  Writing for Z Magazine, (April 2012) Jack Rasmus points out that Obama cut $300+ billion in taxes in 2009 and another $802 billion in 2010 (who knew?). At the same time, before the advent of the Occupy movement, he used his bully pulpit to echo Republican calls for austerity and deep budget cuts. (Among all the damaging reductions to non-military spending overseen by the president, is it too frivolous to point to current plans  to strip PBS of significant funding for some of its most popular cultural and political programming?)

A depressed economy predictably means trouble for the incumbent and his party. Thus the Obama administration’s pursuit in early 2009 of a relatively small stimulus designed to largely peter out by the end of 2010 and riven with tax cuts suggests that the large losses of Democratic Congressional seats in the fall 2010 elections may very well have been a case of failure by design.

Could it be that Obama is only pretending to be a Democrat? Is it possible, as Oliver Stone charged in January 2012 (in connection with Obama’s wars and his attacks on Constitutionally protected freedoms), that the president is the proverbial wolf in sheep’s clothing?

If Obama is not really the sincere and focused Democrat that we supported, that could explain why we’re so disappointed and dispirited and why current polls suggest that his lead over Mitt Romney, the presumptive  Republican nominee, is minimal at best?

Schneiderman responds. 

Daily News headline

Attacking the foreclosure crisis

New York's attorney general pushes back on recent reports

 By Eric Schneiderman 

 New York Daily News April 26, 2012,

A week after the publication of the Gecan and Graff op-ed, Attorney General Schneiderman replied in the same forum with his own op-ed in the New York Daily News entitled, “Attacking the foreclosure crisis.”  Schneiderman’s rebuttal might have reminded readers that in their article, Gecan and Graf called on the attorney general, who they emphasized  “has acted boldly and honorably,” to resign from Obama’s “cynical arrangement.” They appealed to him to “go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.”

Without specifying the authors by name, or mentioning their op-ed, Schneiderman explained that he was writing to correct recent “mischaracterizations” of the mortgage backed working group. Schneiderman reminded readers that  $7 trillion was lost in household wealth when the housing bubble burst.

As evidence of the president’s purposeful action, Schneiderman pointed to the administration’s request for an additional $55 million “to ensure that we have the resources to do a thorough job.” But this assertion, if anything, seemed to weaken his case. First of all, the appropriation must get through the House of Representatives, and if past is prologue, a wink and a nod from the White House will be more than sufficient, if necessary, to ensure that the Republican led House won’t pass such a measure even if they trouble to take it up. Moreover, if Obama was serious about adding such funds, why weren't these funds mentioned in January?

More directly rebutting Gecan and Graff's information, Schneiderman claimed  “more than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way.” Yet, once again, Schneiderman’s assertion raises more questions than it might seem to answer.

Skeptical readers might wonder if these new personnel actually exist, and if they do, have they been specifically attached to Schneiderman’s task force?  If so, were they deployed only in the last week, or have they been working on the issue for weeks if not months? In the latter case, why then did Schneiderman tell Gecan and Graf a different story in March and April?

In his op-ed, Schneiderman references an additional $15 million in funds from the “settlement” that his office succeeded in obtaining “to expand legal services and housing counseling” that were otherwise set to expire on April 1. Now, he writes, these services will be available for three more years.

Readers could be forgiven for wondering if the $15 million in presumably new money was sufficient to get Schneiderman on board to front for a president who once more has shown little action. Obama’s eloquence seems intended to mask his bewildering indifference to the trillions in homeowner losses and the consequent effects on the larger economy.

The episode is a reminder that an inspiring element of the Kennedy administration was the sense that it intended to unleash the talents and energy of the most dedicated Americans in many fields, not least in politics.  Today, as we head deeper into election season, we watch while President Obama seems to block the efforts of a spirited public servant and turn him into a party apparatchik.

Unfortunately it will take more than ringing pronouncements to convince us that the president and attorney general Schneiderman will make much progress as they attack the foreclosure crisis.


NB: For a distinctly less flattering analysis of Schneiderman’s  independence on the mortgage crisis issue, see nakedcapitalism. com, April 23, 2012..

"The Ministry of Truth Speaks: American Prospect Tries to Pass Off Mortgage Turncoat Schneiderman as Hero"