Some 2012 Thoughts

Poor JB!

“This week House Republicans will huddle at their annual three-day retreat in Baltimore to map out their 2012 agenda and strategy for responding to President Obama and Congressional Democrats.”

“But high on the agenda at that meeting for House Speaker John Boehner is likely to be an effort to bridge severe divisions with his own rank-and- file, many of whom questioned his leadership over the course of several showdowns with the White House and Democrats last year. Conservatives want Boehner to be more aggressive in standing for their principles.”

Front and center for the GOP is what to do about extending the payroll tax--beyond its current two month life--which Congress agreed to before leaving last year.

The demand from D’s and R’s will be for a one year extension, with the fight being—once again—how to pay for it.

The last time, Congress adopted a special Fannie and Freddie fee as the required 60 day revenue “pay for.” The easy step would be to rely on that same revenue source, again, and put the fee in place for 10 additional months.

But, that mechanism also perpetuates the mortgage entities and it’s a future cloudy with real estate uncertainty and mortgage finance doubt.

Might the wingnuts on the Right decide they don’t want to extend the lives of the former GSEs in a backhanded way and seek other ways to pay for a very popular tax cut?

We’ll find out over the new few weeks.


“Put Me In Coach, I’m Ready for Freddie or Fannie"

Last week, Fannie CEO Mike Williams announced that he’s leaving as soon as his successor can be named. Freddie’s CEO Charles Haldeman made a similar announcement late last year.

I nominate myself to run either Fannie or Freddie, preferably the former, if President Obama is stumped for candidates.

Everyone else and their grandfather has had their chance, so why not bring in someone who
knows more about the business than the legion of critics out there and even how to deal with the Congress, both sides of the Hill and both parties.

Also, clearly I know how to succeed while being pulled hither and yon. After all I’ve been married for more than 40 years—with kids and grand kids—and that has provided major “push me-pull me” experience.

Lastly, I can be had for whatever compensation Uncle Sam pays his senior civil servants, which should keep some of the congressional salary complaints down. Larger salaries can go to the work force at whichever company I’m posted.

Now, there’s a deal for you Mr. President.

If I get the job and join my old colleague Tom Donilon, currently the President’s National Security Advisor, maybe he would get me access to the one federal report I’ve wanted to see all of my adult life—the government’s UFO files.

That’s right, Mulder, they’re out there. (I hope this doesn’t dampen your interest in me Mr. President.)

The Fed’s report on Housing

As often is the case with the Federal Reserve, the central bank’s recent report on the nation’s housing and real estate markets simultaneously said a lot (verbiage) and nothing (practical recommendations).

The Fed did talk about the central role a Fannie and Freddie play but minced around in making recommendations. When boldness is/was needed, predictably the Fed tucked in its front and rear legs and "turtled."

The Fed might have gotten a lot more attention, as well as some serious positive action on stimulating the residential real estate market by noting the following: the banks are playing it safe and have taken themselves out of any independent financial stimulus picture, since they only originate mortgage loans they can sell to F&F.

Brother Bernanke could have recommended to Brother Geithner that for one year only, Treasury and FHFA permit Fannie and Freddie to run themselves, on a market sensitive basis, charging what the market permits for their goods and services and simultaneously permit F&F to act as agent for any "federally related mortgage" (defined in statute, as any F&F loan or any mortgage loan held by a federally insured depository) which requires restructuring.

Fannie and Freddie could bring a missing catalytic start, as well as standardization and entrepreneurial zeal, to the moribund real estate market and with little downside, since they are regulated tightly enough that there should be no fear of them financing/securitizing junk loans.

It's my opinion that newly motivated work forces at each company can produce far more--systemically--than they now do as Treasury/FHFA automatons, which only can mean positive developments for the economy.

What's to lose, save some political face for those who would demolish the pair, which still are being used heavily but inefficiently by the market? Congress—politically--can still throw them in the scrap heap after they’ve helped start the financial ball rolling.

Mitt versus Obama in November 2012

The doubt should end soon with Mitt Romney finally securing the 2012 GOP presidential nomination. But, will the Republican’s extreme right wing cotton to a Mormon or someone who has shown liberal tendencies on issues they hold near and dear?

My early bet is that they will swallow a lot of their bile and decide to vote for Mitt because they want so badly to beat President Obama.

But, it wouldn’t take too much for a conservative zealot—exorcised over Romney’s history, religion, silver spoon, country club liberalism and moderation—to lead willing GOP defectors away on a political suicide campaign and produce a “Ralph Nader” on Romney, like the real Ralph did to Al Gore in 2000. Here’s hoping.

For President Obama to repeat, he will need all of the Democrats he had in 2008 (unlikely get), plus a good slug of the independents, and hope that some of the R’s stay home.

The best thing for Obama may be the prospect that a Romney (or any R) presidential victory gives the GOP the Congress, the White House and the Supreme Court far into the future--if a conservative President gets to name one or two justices.

That’s a frightening specter: a new conservative majority in both houses ending federal programs—but not corporate subsidies; voting tax cuts for the wealthy; opining on environmental issues; assaulting a woman’s right to choose; attacking progressive court decisions; instituting harsh immigration reforms; blurring church and state boundaries; imposing its will on controversial issues such as evolution; and eschewing any real federal financial, health or safety regulation.

But those fears might just bring out just enough American voters to stop this scary turn to a US theocracy.

Maloni, 1-17-12