Sunday, March 26, 2017

Trumpcare Vote & GSEs, a Nexus??

First they came for the Socialists, and I did not speak out—
because I was not a Socialist.
because I was not a Trade Unionist.
because I was not a Jew.
Then they came for the Trade Unionists, and I did not speak out—
Then they came for the Jews, and I did not speak out—
Then they came for me—and there was no one left to speak for me.

Martin Niemöller (1892–1984) was a prominent Protestant pastor who emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.


Benjamin Franklin: “We must, indeed, all hang together or, most assuredly, we shall all hang separately.”

DJT’s Defeat, Good for the Nation?

That thudding “in-your-face-Donald” Trumpcare defeat at the hands of the House Republican party—abandoning him in his virgin major legislative effort--might have been the best thing to happen to Donald Trump and the nation since he was inaugurated.

Of course, he will pretend he’s above rebuke and spend the next several weeks blaming everyone but himself. He’ll bear grudges against Paul Ryan, GOP moderates, the Freedom Caucus, Democrats, his aides, his son in law, the media, maybe Reince Priebus and "Goebbels" Bannon, anyone not named President Donald J. Trump.

He’ll ignore that Barack Obama passed the original bill with just Democrat votes, meaning Obama did a better job when his party was in the majority than Trump did last week, with the GOP controlling the House (and Senate).

Here’s hoping it makes him wiser and less vengeful. It could make him realize that Washington political deal-making is not like buying land or developing golf courses, and it could make him respect some of what came before his election, relative to the needs of all of the American people whom he claims to represent.

But, make no mistake, politically, President Trump took one in the chops last Friday when House Republicans refused to vote for “his” Obamacare replacement bill and the proposal was pulled from the floor. 

Don’t be derailed by the WH’s post defeat spin. It was DJT’s bill, even though he implied it belonged to its House architect Speaker Paul Ryan.

Once President Trump and his WH staff (VP Spence, CoS Reince Priebus, Counselor Steve Goebbels Bannon, HHS Secretary Tom Price, and OMB Director Mick Mulvaney), and others, took over negotiating with House R conservatives and moderates, it was his package--with Trump’s political DNA all over it—that bought the farm for lack of GOP support.

Post-facto, we hear GOP grumblings, already, that Trump didn’t understand the legislation or know the workings of the US healthcare system, but his effort didn’t sink because he wasn’t a healthcare expert. It was—as usual in DC—because of the politics

(Worth noting how Democrats and Obama handled their healthcare bill, the work and the challenges.)

The President can explain it anyway he wants but the political reality was neither he, Speaker Ryan, nor the rest of Trump’s troops, could cajole enough of the House GOP to back the entire bill.

Having seen this kind of internecine political standoff before, personally, I credit Trump for wading, albeit inartfully, into the morass and using personal influence to try and secure his objectives (although I didn’t care for his final legislative package). I hope this result doesn’t scare him off.

The last days of wheeling and dealing on legislation-- promising all sorts of related and unrelated individual Member priorities, is very common and hardly unique to the GOP. But, the President, his WH staff and cabinet, and the House R leadership, couldn’t do it successfully—although I expect/hope he will get another opportunity, if his setback educates and doesn’t leave him risk adverse.

This episode, certainly, will weigh against his other legislative priorities, tax reform, immigration, infrastructure spending, and more, but the nation needs him to show sharp emotional and intellectually recuperation, plus some humility.

Likely, the President will retreat to Mar-a-Lago for some more taxpayer supported rounds of golf, sulk, nurse his wounds, try and shed the setback like last year’s snakeskin, Tweet some untruths, and vow revenge, etc. etc.

But, if the President is as smart as he claims--and has any sense of how his new office truly works, as well as his capacity to “lead, not follow”--he might look at the political and systemic benefits of Obamacare, which exist despite Steve “Goebbels” Bannon’s protestations, and cobble improvements to that existing law. Build D&R allies and come back with a stronger healthcare proposal that will get a majority of votes in both chambers.

It’s not like the current Obamacare is without flaws. The Congressional Budget Office says it works, but it could work even better. If DJT would take the socks from his ears and engage some serious national health experts, not just right wing ideologues, he could turn this defeat into an eventual win. 

In the Senate his climb is steep because the Democrats have some additional clout. That won’t make his chore any easier, but it certainly is doable, if he tries for bipartisan backing. 

Despite the WH threats and claims, Trumpcare isn’t dead although the package which almost made it to the House will get sheared if/when they start considering it in the Senate. The chamber works differently.

With 48 Democrats and enough Senate R’s caught between their own GOP moderates and hardliners, a thoughtful alternative could incubate.

Donald Trump defied most every element of the Washington Politics 101 book, so if the President considers a softer, bipartisan approach it might not be beyond him to effectively work across the aisle and produce viable healthcare legislation

My Only Russian Comment this week… 

…is an old one. It’s clear that the House R Keystone Cops can’t put together any kind of independent investigation of Russian tampering in the US presidential election, without running to the President with every jot and tittle. An Independent Counsel/Special Prosecutor must be appointed to answer these questions, assure our nation that the Russians did not interfere in our last presidential election, and if they did, they were not invited in to do so by the Trump campaign or its allies. 

Anything short of that congressional response will be the equivalent of the Warren Commission report on the John F. Kennedy assassination, meaning a document forever disputed.

Putin and Russia cannot be trusted. Russians have been our nation’s jealous enemies/rivals since before the end of WWll and won’t change under their current leaders.

For decades, their culture and society have been ones of shortages: never having enough freedom, food, consumer goods, and democracy. To make up for it, they lie, steal, bully, and resort to thuggery, at home, abroad, wherever they post their flag.

The FBI sees it as do others in our intelligence community, but not some of the Capitol Hill thickheads charged with looking for it. 

GSE Fix; Hope for DJT & the Nation?

“Watch but Don’t Bet”

A few things are moving in GSE-world this week (and at the end of last).

As the month of March winds down this week and Fannie and Freddie get ready to shop $10 Billion to the Treasury’s General Fund, we could see the Treasury tell  Mr. Watt’s FHFA to order the GSEs to keep the money and build their capital with it!! (Although the Joe Btfsplk in me says it won’t happen.)

Again, as written about before, the Trump Administration will need money to pay for Obamacare or Trumpcare, just like the previous folks did and there is precedent for using the GSE revenue.

But, here’s hoping Treasury Secretary Steve Mnuchin and his team prove me wrong and have bigger and better ideas than the Obama Admin’s.

IMO, Obama and team certainly embraced the worst idea, i.e. doing away with Fannie and Freddie and giving the nation’s largest banks new ways to plunder our national mortgage markets and financially mug would be mortgagors.


Friday “Surprise,” Patrick Collins Case,
Hope or More Legal BS for GSE Advocates?

Is the “Patrick Collins GSE case,” challenging the Treasury’s 2012 earnings sweep, just a tiny, hopeful GSE light at the end of the tunnel or is it another roaring diesel ready to barrel over and through Fannie and Freddie, their allies, investors, and friends?

I have no idea.

But, let’s recount what happened for those who missed late Friday’s development.

Last Friday night, the Treasury Department informed Southern District of Texas federal Judge Nancy Atlas—hearing the Collins GSE case-- that Treasury no longer supports as constitutionally viable the Federal Housing Finance Agency (FHFA), the GSE regulatory agency created by HERA in 2008.

It’s the same position the Trump Treasury/DoJ recently took in a plaintiffs’ challenge to the Consumer Financial Protection Bureau (CFPB).

The issue here is the CFPB (of which I am a great fan) and the FHFA (of which I am not) both are structured with a single director at the top, as opposed to the more common regulatory format a group or board of commissioners, etc.

Seeking maximum latitude to shuffle off regulatory execs it doesn’t support, i.e. Charles Cordray at CFPB, the Trump Admin now considers both agencies—structurally—to  be unconstitutional, because their Director(s) only can be removed for “cause” and not at the “will” of the President.

The Trump position—potentially not actually, yet—calls into legal question a lot of what those agencies have done in the past.

It’s at this juncture I’ll stop speculating over what Treasury’s new consistency means for edicts from the two regulatory agencies, since the result could be vast or marginal. I’ll let the lawyers among you do that.

Again—since it just happened and was overshadowed by the House Trumpcare vote--we’ll read more about this late Treasury submission in the coming weeks, although GSE Links has some current story ties.

However, this non-lawyer hopes some court exposes the fact that FHFA, in conjunction with the Obama Treasury, violated common sense, common law, and—possibly—the Constitution with its 2012 “profit sweep” actions and, possibly, other GSE promulgations.

(Before anyone gets too worked up and starts buying more GSE shares because of a flip/flop, I must note that some of my more knowledgeable GSE buddies don’t see any help for the cause in the Treasury Friday communication.)


Post-Trumpcare GSE Advice to “Nooch” and DJT—Grab Some Low Hanging Fruit Without Congress

The Admin already has laid out its coming legislative plans, tax reform, immigration, infrastructure, etc.

Secretary Mnuchin should tussle diligently, behind the scenes, to convince the President that DJT can have a relatively easy win—with respect to the fights imbedded in his other agenda items—if he OKs existing Mnuchin regulatory authority to release and recap the GSEs, explaining to the nation why that is a fabulous contribution to the home owning aspirations of millions of low, moderate and middle income families, who can manage the financial requirements.

And, it doesn’t need any formal approval from Congress!

Don’t pout Mr. President, get right back on that horse and ride with a GSE resurrection which, properly explained, will have broad appeal to those people who voted for you and also be part of the job stimulus effort you consider desirable and inherent in other initiatives.

I am certain you and your team can pitch reviving Fannie and Freddie to the nation as a signature Trump achievement and make it stick, since Secy. Mnuchin already has nailed the substance.

Let me repeat the best reason to do it.

It doesn’t need any formal approval from Congress!

Don’t get PO’d Mr. President, Get GSE’d

Maloni, 3-27-2017


G. Buckman said...

Bill, let's hope Trump, or some within his Admin, reads your blog and does what you prescribe regarding the GSEs. It will be interesting to see if Mnuchin and Watt stop the GSE dividend payment before the 31st, so FnF can do the smart thing and start to build some much needed capital.

What are the odds of that happening? Better than getting dealt a five-card straight flush? I wonder...

Keep up the outstanding work!

Anonymous said...

I sent a letter Saturday to Mnuchin stating this could be a low hanging fruit. Less than 200 people in the whole country hate GSEs. Should he care?

Unknown said...

DJT CAN LABEL THIS PLAN AS TREMENDOUS - There is a HUGE public political win available for whomever can message the return of the GSE'S to full health.  With the current budget projections made by the White House, the Government could choose to obtain $150 Billion (approx.) from the right to exercise and purchase 80% of FNMA / FREDDIE through warrants received in 2008 and then sell their interest versus waiting ten years and continuing to fight numerous lawsuits.

This is $150B back to US for infrastructure spending under new president. 

Anonymous said...

It is easy to give something that is not yours. How many years do you think they will have to defend themselves against the lawsuits challenging the exercise of the warrants. The government has been paid 260 billion and (hopefully not) counting. It is enough. Actually it is more than enough.

Bill Maloni said...


Mnuchin should care and I agree with you, relative to the rest of his issue chores, this would be easy-peasy, with pluses galore about which his boss can brag, especially to the little people.



See my answer above and you hit on another major one, based on timing and likely value of the Treasury GSE investment.

It's not without opponents but it sure has a smoother pass and HUGELY favorable economic and employment results it properly structured.

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