Sunday, December 2, 2012

President Obama: Big Steps and Go Bold

Cliff Notes

Tim Geithner would not be my choice to negotiate the Administration’s side of the “fiscal cliff” discussions. Despite his title, he doesn’t have the necessary credibility, political savvy, skill or clout; plus the Republicans know he’s a lame duck.

I would trust the President more himself to get the job done, personally. Mix it up Barack, don’t sit back and pontificate.

Grab Speaker John Boehner and the two of you, plus a small group of advisors, get in a room and stay there until you’ve hammered out a deal.

To me, that’s far more preferable and presidential than press release battles.

Since the President, for now, has eschewed this approach and wants an intermediary, my pick would be Obama Chief of Staff Jack Lew, someone whom I consider much more “Washington-smart.” Lew is a man of great integrity and a budget expert whose knowledgeable word on those matters counts. It doesn’t hurt that he is on the President Obama’s short list to succeed Geithner as the next Secretary of the Treasury and smarter than Geithner.

I continue to believe that the sides will agree on a package or the GOP—having failed to awaken and smell the November 6 coffee—will suffer doubly over their insistence of protecting the wealthiest 2% of Americans at the expense of the rest of American and no matter the Republicans seek to spin it that is the reality.

In that context, I believe Republican lobbyist Ed Rogers had an excellent summation of the GOP political status.

And a Politico reporting team has an equally pithy report on a possible “Cliff” outcome.

Reaching Across the Aisle, BO to Mitt and BZ

I hope that the President’s recent lunch with Mitt Romney produces a White House invitation to Romney to take on a serious mission, widely viewed as having substance and merit.

President Obama should advantage of Romney’s managerial and skill business set and turns him loose of a vexing public matter (ala Simpson-Bowles) and hope he succeeds. The mere appointment would send a message to America that one time political opponents can find common ground.

In the same vein—although I think this is a much longer shot—since Susan Rice has wounded herself in the foot and possibly lost her chance to be Secretary of State, President Obama should consider skipping the easy step of sending up Senator John Kerry’s name for the slot, and reach out to the brilliant, but very Republican Bob Zoellick and consider naming the former President of the World Bank to the top US foreign policy position.

(Disclosure: Zoellick is an old friend and former Fannie colleague, where he toiled in two different stints, the second as my boss. He’s a tough SOB to please and his team expectations are high; he’s confident and a solid manager.)

Bringing Zoellick onboard would be a bold, bold move Mr. President and possibly add a meaningful element to your legacy that lesser lights would not. It also would prove “bipartisanship” isn’t just a throwaway line.

Bob Zoellick earned boffo reviews for his World Bank work and—reportedly—had support around the world for a second term, if he wanted to serve again.

Zoellick professional history is excellent. He worked with the renowned Jim Baker at Treasury, holding several senior positions. He was the US Trade Representative for 4 years; is an incisive thinker, who doesn’t suffer fools gladly; seems to work about 26 hours a day; and, as Time Magazine famously quipped, “Zoellick has 30 more IQ points than everybody else.”

He also was the Deputy Secretary of State and later worked with Goldman Sachs when he left government, before being named head of the World Bank in 2007, a term position from which departed last July.

Zoellick is a senior fellow at Harvard, his alma mater and recently was an advisor to the Romney campaign.

Don’t know if he and President Obama could have a meeting of the minds on policy issues, but Zoellick would be a tremendous appointment, who would come onboard only if Zoellick respected the President’s intellect and they shared common views on the Middle East, China, Russia, Korea, and the many hot button issues facing Hillary Clinton’s successor.

Worrying about Fannie? Don’t!

Because of their pivoting and mammoth central financing role, Fannie and Freddie will be in the middle of anything the While House/Congress cooks up to improve housing finance or the status of those paying off underwater loans, many of which are in Fannie’s and Freddie’s mortgage portfolios.

As federal financial regulators seek to define risky and non-risky mortgage qualities—in new regulations soon to see the light of day—Fannie’s and Freddie’s standards and systemic operations will highlight and encourage making those mortgages.

Their current business profits suggest that the Treasury now will reap between $10 Billion to $20 Billion annually from the two, no small amount from which to blithely step away.

Some in the House may call for early Fannie and Freddie hearings but it will be right in the middle of great earnings years, with all of that cash going to Treasury, just as new national policies to insure quality mortgage acquisition will be applied to all lenders, and as the nation looks to housing to help stimulate an economic recovery.

So any partisan hearing designed to kick dead or to pretend that the two caused the 2008 financial meltdown will merely showcase the viciousness of those who promote such deliberations.

However, hearings to educate the relevant committees’ members about how F&F truly operated positively for 30 years--before they deviated and both engaged in undesirable and unnecessary Alt A and subprime mortgage investments--could be a very beneficial educational exercise.

Here’s a link to a recent article suggesting Fannie and Freddie will be with us “forever.”

Learning From History

In my last blog, I suggested that  housing and mortgage finance policy leadersshould analyze three decisions rendered by federal Judge Richard Leon, when he issued summary judgment rulings to three Fannie Mae executive, and removed them from a shareholders’ law suit alleging securities violations.

I wrote then that I felt it was important for people writing legislation to understand the real working of Fannie and Freddie and the why dark clouds still surrounding their pre-2005 operations may be all wrong.

Now, I am going to apply the same suggestion to any GOP officials dissecting the presidential election results to discover ways the party might change itself to insure that it’s not an anachronism as US demographics streak by it.

While I’ve offered my own recommendations in previous post-election blogs, a better idea is for those people who to read and internalize the comments of a Jim Greer, Florida Republican official who candidly discussed how state Republicans sought to suppress Democrat turnout and why? There are the answers to some of the GOP’s challenges.

It boils down to the same reasons why minorities don’t feel comfortable in the Grand Old Party, no matter how much the “regulars” claim that’s not true.

If, as a political party, the GOP tries to keep them away from the ballot box, what does that say to blacks and Hispanics when they consider the Republican Party’s accessibility?

These 2012 GOP election maneuvers scream, “Sure, we’re inviting, but not you!!”

Maloni 12-2-2012

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