Meanwhile, even if you are too hung over or depressed to care, please read Gretchen Morgenson's short piece on the "Me First" crowd in today's New York Times. (h/t James Traynor). My only quibble is that she neglected to name the guilty. (except for Jon Corzine). For instance, why hide the identity of Can-Kicker-in-Chief?:
Another unfortunate lesson we keep learning over and over is that policy makers always put off tough decisions for another day. Kicking the can down the road is so much more fun and profitable, especially for politicians worried about re-election.Morgenson has taken a lot of unfair heat lately because the Republican contenders have co-opted her criticism of Fannie and Freddie as outlined in her recent book (Reckless Endangerment) and twisted it into the talking point that the two Fs were the sole cause of the whole financial crisis. (along with, of course, those greedy undeserving deadbeat homeowners). Her legitimate criticism of the recently canonized Barney Frank, who exercised tepid at best oversight of the banking system, pre-collapse (and lent his name to the equally tepid Dodd-Frank financial reform) has also come under fire.
But as she points out in her essay today, it was the outrageously-paid bankster-enabling executives of Fannie and Freddie -- not the agencies themselves -- who deserve a whole bunch of blame. They retired with huge bonuses and nary an indictment. And not only that, guess who is paying for this over-hyped can-kicker of a payroll tax holiday? Not the millionaires, as Obama originally pretended to insist upon. No.... the people who will be paying are the poor slobs who actually had decent enough credit scores to buy their own homes! Morgenson writes:
Washington politicians can usually be relied upon to educate the citizenry — again and again. Last year was no exception. One telling moment came late in the year, when Democrats and Republicans agreed to extend an existing payroll tax cut for two months. Helping to defray the cost was $36 billion generated through an increase in mortgage guarantee fees charged by Fannie Mae and Freddie Mac.
That $36 billion will come out of borrowers’ hides, of course. But using Fannie and Freddie as a money spigot sent a powerful message: Never mind that losses at these mortgage giants have cost taxpayers $150 billion so far. Or that many Americans would prefer these toxic twins to go out of business sooner rather than later. As long as Fannie and Freddie are viewed as piggy banks, there is little chance that Congress will dissolve them. It looks as if these taxpayer-owned zombies, which did so much damage to our economy, are poised to live on and on.Among the well-remunerated zombie spawn is one Thomas Donilon, who is reanimated as Obama's trusted national security adviser! Donilon was at Fannie Mae for six years, until 2005, before doing the usual revolving door routine to go to work as a lobbyist. Obama then plucked him from influence-peddling duties to join his transition team, at the very same time Fannie was being seized by federal regulators in the wake of the meltdown. The choice raised a few eyebrows at the time. But not too many.
Donilon, who has no prior military experience, now presumably advises Obama on drone strikes and homeland security and Afghanistan. But according to the LA Times, he is more of an enforcer for the president than a strategist. He has a very low profile, which is perhaps why you never heard of him. He functions as a glorified secretary with an iron fist. His wife is Second Lady Jill Biden's chief of staff, and his brother-in-law serves as counselor to Joe Biden. Ain't the meritocracy grand? And here you thought there was no direct relationship between Wall Street and the Military Industrial Complex! What an incestuous cozy cocoon has been spun inside the opaque Beltway Bubble.
Happy first day of 2012. Have another drink.
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