This and That!

First they came for the Socialists, and I did not speak out—
because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
because I was not a Jew.
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.

GSEs and Healthcare; the latter not a POTUS Win

Every week, I talk or otherwise interact (lots of emails and texts) with dozens of people focused on the GSE issues.

But while some homogenization exists, most of those with whom I deal seem to care more about the GSE preferred or common stock price and don’t, surprisingly, focus on the nation’s mortgage finance delivery system, and who/what would control it if dramatically altered, i.e. as most of the Hill proposals would.

To me more than any stock price bump--more likely drop, given the financial and social peril if it is delivered into the wrong hands—governing control is the crucial part of the lengthy and intractable imbroglio. 

Personally, I don’t know any of the mega hedge fund GSE mavens, but do know several people who years ago—way before 2008—invested in the GSEs and have watched their hopes crumble of catching financial lightning in a bottle with their early Fannie and Freddie investments. I feel for them.

Their increasingly rueful stories appears on many of the GSE blogs where they can offer up their frustration and unhappiness.

I welcome and enjoy discourse with both groups. Indeed the major investors need to be acknowledged because they have driven—and paid for--all of the primary lawsuits which keep the future of the GSEs alive, operationally. My thanks to them for those actions.

I worry less about the GSE stock trading multiples and more about the nature of the future mortgage system model which survives the producing end of the public policy meat grinder, because I think one begets the other.

If policy makers ever agree on the one, then you realize the second.

Secure the GSE System, Price Comes Later

Fannie and Freddie stock prices, despite their $20 billion per annum product—never trade on economic returns, market share, etc. the stuff that moves other publicly traded stock, but whims and whiffs of GSE political or legal developments (not many of the latter, lately).

IMO because of the legal/political uncertainty, GSE preferred and common shares are bouncing political footballs (sorry my legalistic friends) as we’ve seen in so many cases decided in the “Lamberth” vein.

Yes, the GSE preferred stock is a “contract,” which bears distinction from the common shares and the common—depending on a positive resolution of the GSEs current value—could have value of several times current prices.

Yes, the courts still may offer a better hope than any congressional exercise, since this Congress is not made up of honest brokers nor people who have displayed deep understanding of how mortgages are originated, financed, or the best way to deliver those to their constituents, most of whom want ease, access, and fairness when they shop for a mortgage loan.

I contend, if policy makers just focused only on--“What is the best, fairest, most easily employed, transparent, mortgage finance delivery system for all Americans,who qualify for mortgage loans?"--the Fannie Mae/Freddie Mac model and experience, hands down, is superior to all conventional loan competitors.

Especially so, if those congressional policymakers realized that the “all Americans” are their constituents or better yet, their constituents will know if their Senator or Member of Congress whiffs on their interests but embraces the promises of the big bank crowd.

Look to Tim Howard's Proposal

More aggressively, I would argue, that all of the “Inside the Beltway” think tank, aerie faeirie replacement schemes, being touted by the industry groups and special financial interests, pall when compared to the Tim Howard “remake them as utilities” idea which he has logically constructed and capitalized, which appears on his blog.

The latter idea preserves the best of the GSEs but adds proscribed limits on what critics claim are Fannie and Freddie shortcomings, i.e. profits and scope of business activity.

Washington skeptics, please re-read that last sentence and think about it.

And the Howard proposal would not disrupt the current regulatory regime, which already has sanitized the GSE operational mode and did away with the single biggest element of the pre-2008 financial debacle, i.e., authority to buy/securitize subprime mortgage products.

(Please note that the bank financial regulators have not banned their regulated institutions—the likely beneficiaries if the GSEs were disassembled--from selling those products.)

Bad Guys Secretly Creeping into Fed Posts

In past blogs, I’ve mentioned the dozens of anti-GSE types lurking in the DC policy area still with their long knives out and still desirous of damaging the two.

The Washington Post’s Sunday editorial (excerpt below) suggests why my concerns have foundation.

“WHAT DID President Trump really mean when he vowed to “drain the swamp” in Washington? Did he mean to break up the endemic conflicts of interest among lobbyists, industry and public servants? Certainly Mr. Trump’s campaign rhetoric implied that he would discourage the mingling of political power and influence. On taking office, Mr. Trump’s executive order on ethics toughened the rules on government officials when they leave, barring them for five years from lobbying on topics they worked on in government.

In the same executive order, Mr. Trump also attempted to prevent conflicts of interest when officials join the government. Specifically, under Mr. Trump’s order, officials must pledge that, for two years from taking office, they will not participate “in any particular matter involving specific parties that is directly and substantially related” to former employers or clients. Also, if they were lobbyists in two years before taking office, they must promise to stay away from any specific issue they lobbied on, a ban that should also last for the first two years in government.

Now come reports the Trump White House is issuing secret waivers to the president’s own ethics rules, allowing incoming officials to work on issues they handled before becoming public servants. The New York Times reports that in the Obama years, there were waivers issued under narrow circumstances, but the waivers and explanations were made public. The Trump administration is no longer disclosing and no longer explaining.

How many waivers have been issued? No one seems to know, but the president is appointing former lobbyists, lawyers and consultants who are in many cases working on policies affecting the same industries they served before, according to a survey conducted by the Times in collaboration with ProPublica. For example, they reported, a top White House energy adviser is handling the same issues that were of concern as a lobbyist for major energy-industry clients.

Last Week’s House Healthcare Vote 

I don’t care what anyone thinks about the current Obamacare health system, which hardly was coming apart as critics suggested, but how could anyone find anything ennobling about how the House--on a pure party line vote, with some in the GOP voting “no”--passed a bill on which they had few details, no objective cost estimates, no measurement of Americans served or exposed to losing their insurgence,  far more expensive coverage,  no easily understood protection for those citizens with pre-existing conditions, sketchy policy tax breaks for the wealthy, and a bill that most American major medical groups opposed?

(List of opponents.*)

·         American Medical Association

·         American Hospital Association & Federation of American Hospitals

·         American Cancer Society Cancer Action Network

·         American Health Care Association (AHCA)

·         America’s Essential Hospitals

·         America’s Hospitals and Health Systems

·         American Public Health Association

·         National Disability Rights Network

·         National Partnership Women and Families

·         National Physicians Alliance

·         American Federation of State, County, and Municipal Employees

·         National Council of La Raza (NCLR)

·         Asian & Pacific Islander American Health Forum

·         National Committee to Preserve Social Security & Medicare

·         National Center for Transgender Equality

·         Catholic Health Association of the United States

·         American Federation of Teachers (AFT)

·         National Education Association

·         American Federation for Suicide Prevention

·         Cystic Fibrosis Foundation

·         HIV Medicine Association

·         Leadership Conference on Civil and Human Rights

·         MomsRising

·         Children’s Defense Fund

·         Families USA

·         Consumers Union

·         Sister Simone Campbell

·         NETWORK Advocates for Catholic Social Justice

·         Young Invincibles

·         Planned Parenthood

*List from the office of Senator Chris Van Hollen (D-Md).

IMO, that vote all was about a rightwing House voting against the former Black President’s signature legislative achievement to the detriment of millions of lower income, elderly and poor Americans who need that system, with its working state exchanges????

Wait until those people wake up and find out what the POTUS and GOP did to them.

That tortured legislative exercise was produced so our intellectually uninquisitive, non-reading, incapable of identifying with family hardship President--who didn’t know what was in the healthcare bill  voted down before and didn’t know the details of what passed last week—could chortle over a pyric/ersatz victory that it and he are “great!”

His “win” which likely came at the expense of millions of the least able and the oldest of us all, whom he promised to help prosper.

I expect his insurance industry allies are happy but many of the American people can’t be.

Maybe DJT can go, again, to Pennsylvania or West Virginia and brag how he helped all of those residents with this slash and burn healthcare legislation.

Sorry DJT, not leadership. 

Best line, I read, describing the Trump/Ryan healthcare bill--crucial details of which were not available to the undemanding House R’s when they voted overwhelmingly for it last Thursday—was penned by Ross Douthat in New York Times:

“Thursday’s House vote for the American Health Care Act, a misbegotten Obamacare quasi-replacement with the favorable ratings of diphtheria and the strong support of almost nobody on the right who cares about health policy, will necessarily be the undoing of the congressional G.O.P.”

Yay Douthat: the ‘”favorable ratings of diphtheria,” what super descriptive prose!

I wouldn’t be shocked if diphtheria’s favorability ratings are close to those of the current Congress.

Maloni, 5-8-2017