Sunday, August 1, 2010

Hank Paulson, Iran’s Nuclear Work, and Snooki

Is Hank With Us or Against Us?

Good old Hank Paulson, who ever thought that he would be a “houser” or that he would wax eloquently in support Fannie Mae and Freddie Mac, the companies he helped assassinate?

But, there he was on Friday’s Washington Post op-ed page, initially making out like “Horatio at the bridge,” saving the world from the mortgage giants, but then slightly changing his tune and arguing the case for some continued national mortgage finance role for Fannie and Freddie.

Paulson acknowledged the major work the diminished Fannie and Freddie have taken on since most commercial bank and Wall Street money—except that which is funneled through F&F--has run from the mortgage market. (I always wondered while federally insured depositories, which now own most of the mortgage companies and with their big honking FDIC insured deposit subsidy—call themselves “private,” but Fannie and Freddie always were considered “government?” The media, which helps perpetuate this farce, must think the FDIC no longer is part of our government or offers no value added.)

With this op-ed, either Hank’s gone two faced on us or he is waking up to what I’ve been suggesting policy makers are going to realize and that is that the Fannie “model” is not a bad one.

No, I am not even calling for—as Hank does—a possible resurrection of F&F as controlled utilities, merely that you either have federal money in the mortgage market place—which would mean smooth flowing credit and a certain standardization and active securities market—or you would “go Marine” and have only private lenders and no federal money.

The latter would bring the residential real estate market to a near grinding halt. Not even the big banks and Wall Street really want that, even though many claim they want F&F demolished as per Barney Frank’s wish.

Like it or not and understand it or not, Fannie and Freddie—which didn’t create themselves--were the Congress’ creative models for federal mortgage market presence in the disguise of private money or the reverse, depending on which side of the road you stand. For 25 years, they were roaring successes at carrying out their congressionally designed housing mission.

If you want the mortgage finance system to continue to offer the “good” that each company did--and that was ample--policy makers will design a new system which will recreate much of what Fannie and Freddie did (and does), i.e. dedicated national mortgage investor which allow hundreds of local primary market lenders to finance families all across the country—with similar mortgage products and prices. Local lenders then should be able to pass on those mortgage and their inherent financial risks to an entity better able to manage the interest and credit risks.

Nobody who reasons should get blindsided by the phony arguments that Fannie and Freddie, helping low and moderate income families get mortgages, gave birth to their own financial problems nor caused the broader financial services industry meltdown.

That’s line of argument is just standard GOP propaganda designed to deflect dealing with what really occurred, which was piss poor Bush Administration federal financial regulation and craven GSE management, which acquired billions in Wall Street generated private label subprime securities post 2004.

My friend and former Fannie colleague, Barry Zigas, did a nice job of responding to the Paulson piece in his own Huffington Post op-ed, which also appeared last Friday.

I just hope that my pals who are out there on the “abolish the GSEs” ledge are careful, because that could be a disastrous (political) fall if events prove you are wrong.

Of course, if that befalls the Wall Street Journal or Washington Post editorial folks, it wouldn’t be disastrous, just righteous.

Sen. Ben Nelson (D-Neb)

November’s congressional elections likely will cost Democrats seats both in the House and Senate, meaning the party’s tenuous 60 vote occasional “veto proof majority” likely will be lost to GOP gains.

BFDI If it is lost then it’s lost and the D’s—if they stay in charge of the Senate-- just will have to work harder.

However, slimmer numbers and all, if I was Harry Reid (and still Majority Leader in late November), I would move to pitch Sen. Ben Nelson from the Democratic Caucus, the agenda which doesn’t draw too much voting support from Nelson.

National Journal magazine identifies Nelson, based on his votes, as the most conservative Democrat in the Senate, with a voting record to the right of 5 “liberal” Republican Senators. This weekend Nelson announced he will oppose Obama Supreme Court nominee Ellen Kagan, adding to the list of dozens of Obama nominees and initiatives, to which Nelson has said ”No.”

But, challenged by fiscally conservative Republicans, "Maverik" Nelson didn’t back off the hundreds of millions in federal setasides he authorized, which reportedly helped his son’s business clients.

Again, who needs Ben Nelson, since he abandons the party more than he supports it? Why give him “majority status,” plus a chairmanship which goes with being a Democrat, when he votes, looks, acts, and speaks like a Republican. (“If it walks like a duck, talks like…!?)

Nebraskans are entitled to elect whomever they want, but the Senate Democrats don’t have to accept that person in their Caucus.

Come on Harry, prepare to show some!

A Muscle Not Used Becomes...

The United States hasn’t employed a truly major stealth pre-emptive military assault in years. When we have donesomething big (invasion of Kuwait and later Iraq), we’ve usually telegraphed the move to both intimidate the enemy and allow non-combatants to avoid combat areas.

In an article in yesterday’s Washington Post Outlook section, former Clinton and Obama national security advisers, respectively, Steven Simon and Ray Takeyh, asked whether President Obama ever would move militarily against Iran’s nuclear facilities and under what circumstances?

They didn’t answer the question about such a sudden strike, merely asked the question and noted all of the problems from unhappy allies, UN opposition, domestic political angst, and possible negatives among our Middle Eastern Muslim state allies (where significant US military facilities exist), which would flow and need managed.

Now a military assault against Iran’s nukes and the, likely, resulting ground hostilities requiring some US “boots on the ground in Iran,” would give some short term political gain to Obama (maybe more), from the US Right and grief from some on the US Left.

That act likely would generate public anger from all of our “traditional” allies, save Israel.

How many of us, privately and not so privately, have said, “Screw the (name an "ally"), it’s our world that’s being threatened?” (Would this be an appropriate moment to mention that most French tanks, reportedly, have five reverse gears and one forward, the latter being just in case French forces are attacked from behind.)

When “nothing if off the table,” as the President claims with Iran, then nothing militarily really should be off the table. A pre-emptive military capacity never used in stealth allows that muscle capacity to atrophy from non-use.

No Administration should allow that to happen.

The world and our enemies never should think that we would fail to use any weapon in our arsenal, including the atomic ones, should the threat to our nation warrant it.

Snooki Polizzi and President Obama

Last week, while in a doctor’s office magazibe reading and waiting for a test men hate, I learned who New Jersey’s Nicole “Snooki” Polizzi is. Two days later, I saw a picture of a very inebriated Snooki, being hauled by a friend from some New Jersey beach scene and reading that Snooki had been charged for public intoxication or whatever they call it in New Jersey, the state where “big hair” never has gone out of style.

Television reality "star" Snooki—who once was arrested for selling alcohol to minors, including one who died that night in a traffic accident, and who is studying at a local community college to become a veterinary technician--apparently doesn’t like President Obama and will repeat her presidential disdain on the opener of her “Jersey Shores” TV show.

Let’s see Snooki or President Obama, Snooki, President Obama, Snooki, President Obama…?
Sorry Snook, you lose. I have a feeling that your “15 minutes of fame” soon will be up.

Maloni, 8-2-2010

1 comment:

Anonymous said...

What do you think of Rep. Barney Frank's call for GSE's closure? Is he playing the easy political card of blaming institutions that are not allowed to defend themselves? or he thinks that the american public has short memory to recall his previous statements.