Anderson@Large

(Pre-)Occupied in Philly

Sarah Palin famously said she could see Russia from her window. I can’t see Occupy Philadelphia from my apartment, but I sometimes hear the protesters.

I have not blogged much the last few days because I’ve been preoccupied with a project. I’ll get back to my regular schedule next week.

With folks in an uproar from the Big Apple to the Big Easy, a Facebook friend left this comment on my wall:

Buckle up! The pot is starting to stir. 2012 is starting to look like it’s going to be a real doozy of a year with a spectacular conclusion, considering the economy and the election, and people in the streets, and the Mayan Calendar thing and all.

While it “ain’t exactly clear” what’s going down, it’s going down all around us.

Confidence Men

Ron Suskind’s much-anticipated book, “Confidence Men: Wall Street, Washington, and the Education of a President,” will be published today.

The book reportedly tells how three stooges appointees – former White House Chief of Rahm Emanuel, former Director of the National Economic Council Larry Summers and Treasury Secretary Tim Geithner – “hijacked” the Obama presidency.

Frank Rich and Adam Moss of New York Magazine received an advance copy. Here’s what they had to say:

Adam: Hi, Frank. So there’s a little commotion about this new book Confidence Men, by Ron Suskind, which is being published on Tuesday. And as it happens, you and I have actually read it! So let’s talk about that this week. To give readers a super-fast overview, it’s a book, essentially, about Obama’s economic team during his first two years in office. The news of the book, according to some reports, is that Tim Geithner was insubordinate to the president, pursuing his own pro-banker agenda. Or, according to other reports, that Larry Summers was insubordinate to the president, pursuing his own — well, monomaniacal agenda. I’d add that it’s also about Rahm Emanuel being insubordinate to the president, just because. Basically, it’s about the presidency being hijacked by these three guys. And the guys thing is important because they’re pretty awful to women. Anyway, they’re the villains. Paul Volcker, Christina Romer, and Elizabeth Warren are the heroes. Bankers win, America loses. Did I get that right?

Frank: Hi, Adam, and yes, you did! I would point out that among the other heroes are more women (Sheila Bair, Brooksley Born, Maria Cantwell) and at least one man, the Princeton economist Alan Krueger, who also seems to be a serious Suskind source and who has now returned to the White House to succeed Austan Goolsbee and Romer as head of the Council of Economic Advisers. Not that that will do any good. I think the portrait of Geithner is devastating — his countermanding of the president’s wishes to make a Wall Street object lesson of Citigroup, his nasty “Elizabeth Warren strategy” to silence and neuter the administration’s rare genuine reformer. And yet Geithner is the only member of the original economic team still standing in the White House, poised to countermand any other rare independent voice that might yet speak up, like Krueger’s.

A: You think the portrait of Geithner is more devastating than the one of Summers? I guess. In that instance you cite, Obama asks to put the dissolving of Citibank on the table, and Geithner simply ignores him, “walking back” the decision, in political parlance. More insidiously, he creates the framework, borrowed from Hippocrates, of “first, do no harm,” which effectively cuts off any bold reforms for fear of their potential effects on the market. But Summers is portrayed as an egotistical nut job, single-mindedly determined to get Bernanke’s job; when he doesn’t get it, he goes bananas. He is supposed to be a conduit for the collective advice of the team, but undermines his colleagues, only passing along advice and information that supports his positions. I was kind of stunned how many officials were willing to go on the record against him.

Peter Orszag relays this eviscerating quote that Summers said to him about Obama during the worst of the economic distress. According to Orszag, Summers says, “You know, Peter we’re really home alone. There’s no adult in charge. Clinton would never have made these mistakes.” Later, Orszag says to Suskind, “Larry just didn’t think the president knew what he was deciding. Was this [obstruction of the president’s wishes] outright and willful?” In other words, asks Orszag, was Summers saying, “I know more than the president flat-out? That strikes me as ... likely.” In an amazing memo, Pete Rouse, who would replace Emanuel temporarily as chief of staff, recommends firing Summers for “Larry’s imperious and heavy-handed direction of the economic policy process.” Romer says Summers made her feel “like a piece of meat.”

In the end, nobody’s talking to Summers — not even his crony Geithner. Furious that Geithner didn’t recommend him for Bernanke’s job, he stands Geithner up at a dinner for all the former Treasury secretaries — Summers is the only living former secretary not there. Geithner says, “Larry would rather be in Davos than at dinner with me.” At least according to Suskind, the only person who could stand Summers was Obama, which — in Suskind’s telling — was a misjudgment that had a rather profound effect on the first chunk of Obama’s presidency.

Read more: Obama’s Economic Quagmire

Troubled Waters

Democrats are facing double trouble in the run-up to the midterm elections.

First, Rep. Charles Rangel was accused of 13 ethics violations. It is troubling the former chairman of the House Ways and Means Committee allegedly failed to pay his taxes.

For New Yorkers, affordable housing is a hot-button issue. So it is especially troubling that Rangel arrogated unto himself four rent-controlled apartments while living la vida loca in the Dominican Republic.

Yesterday, the Office of Congressional Ethics released its report on Rep. Maxine Waters, who is accused of steering TARP funds to a bank in which her husband held stock.

The summary of allegations reads:

There is a substantial reason to believe that Representative Waters’ conduct may have violated House Rule 23, clause 3 and House precedent regarding conflict of interest when she called then Treasury Secretary Henry Paulson and requested that Treasury Department officials meet with representatives from the National Bankers Association. A meeting was in fact granted, however, the discussion at the meeting centered on a single bank—OneUnited. Representative Waters’ husband had been a board member of the bank from 2004 to 2008 and, at the time of the meeting, was a stock holder of the bank.

In a statement, Waters denied any wrongdoing:

I have not violated any House rules.

Therefore, I simply will not be forced to admit to something I did not do and instead have chosen to respond to charges made by the House Committee on Standards of Official Conduct in a public hearing.

The possible public trials may play out in September when thousands of black elected officials, academics, community and thought leaders, and activists will be in DC for the Congressional Black Caucus Foundation’s annual legislative conference.

Waters’ “Banking Issues Forum” is sure to attract a large crowd of constituents and supporters, as well as a media circus.

CBC Week chatter will likely revive the decades-old narrative about the “harassment” of black elected officials.

UPDATE: CBC Chair Barbara Lee released the following statement on Waters:

The House of Representatives has a long-standing and well established ethics process, which should be allowed to proceed without prejudging the outcome. Although the alleged charges remain unclear, some in the media have sought to indict Congresswoman Waters in clear disregard of her right to a fair and due process.

Throughout her tenure in Congress, and in the California State Legislature before that, Congresswoman Waters has been a tireless and effective advocate for underrepresented and underserved communities and institutions. She continues to be an important voice on those and many other issues and should not have her rights usurped by politicians or the press.

It’s on.

NAACP, Wells Fargo and Kansas City Blues

The NAACP kicked off its 101st annual convention on Saturday at the Kansas City Convention Center.

 

Some are singing the blues because President Barack Obama decided to skip the convention.

The Senate is expected to vote on sweeping financial reform legislation this week.

It would have been awkward for Obama to talk about the need to change the way the financial sector does business at a convention whose lead sponsor is Wells Fargo.

The reckless practices of Wells Fargo and other bailed-out banksters triggered the financial crisis that drove the economy into a ditch.

Although Wells Fargo is being sued by several cities for targeting African Americans with subprime loans, the predator lender looms large over the convention.

While the NAACP stonewalls on the terms of its “partnership” with the predatory lender, the Associated Press reports Wells Fargo “will be at the convention talking to borrowers about modifying loan terms.”

If Wells Fargo’s record on loan modifications is any indication, it will be just that – talk.

Consider: An analysis by ProPublica found the federal government’s loan modification program, Making Home Affordable, is “still sputtering.” The $75 billion foreclosure prevention program is administered by the Treasury Department.

To date, only 23.8 percent of Wells Fargo’s borrowers have received a permanent loan modification. Nearly 50 percent have had their temporary modification canceled.

Reports vary as to the number of people at the convention. An indeterminable number are Wells Fargo borrowers.

How many NAACP convention-goers will have their loan modified after their talk with a housing counselor? Few, if any.

The “Financial Freedom Campaign Center” is little more than a fig leaf to cover up a partnership that benefits only certain people.

The NAACP is convening in the “Show Me” state, but it has yet to show the African American community how hooking up with Wells Fargo is in their interest.

Stolen American Dreams

Last week, Attorney General Eric Holder announced the results of Operation Stolen Dreams, the largest enforcement effort targeting mortgage fraudsters. Holder said:

Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital.

Also last week, the Center for Responsible Lending (CRL) released a report on the depth and disproportionate effects of the foreclosure crisis.

The report, “Foreclosures by Race and Ethnicity: The Demographics of a Crisis,” details the disparate racial impact of subprime mortgage lending:

First, not only were borrowers of color more likely to receive subprime loans than white borrowers, but within the subprime market, borrowers of color were more likely to receive the most expensive loans and were more likely to receive subprime terms associated with increased default risk, such as prepayment penalties. Previous research has shown that African-American and Latino borrowers were about 30% more likely to receive the highest-cost subprime loans relative to white subprime borrowers with similar risk profiles and that subprime loans in communities of color were more likely to carry prepayment penalties than subprime loans in majority communities.

CRL estimates that 11 percent of African American homeowners have already lost or are at risk of losing their home.

Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights, said in a statement:

The findings in this report describe the devastating impact that the casino culture of Wall Street and the mortgage industry is having on communities of color. Instead of owning a piece of the American dream, these hardworking families have borne the brunt of an anything-goes regulatory system that has turned a blind eye toward predatory lending and the needs of vulnerable consumers, who may never recover the wealth they have lost.

Where is the NAACP?

Has the civil rights organization’s “partnership” with Wells Fargo caused it to turn a blind eye to the foreclosure crisis that will drain $193 billion from the African American community by 2012?

The NAACP claims Wells Fargo’s signature on its banking principles commits the subprime lender to monitor its policies and practices “to determine overall, and within the subprime community of loans issued by the institution, that its neutral practices do not have an unlawful adverse impact based on grounds of race, sex, color, or ethnicity.”

The NAACP says its partnership with the subprime lender is about the future. But Wells Fargo has one of the worst loan modification rates under the Treasury Department’s foreclosure-prevention program.

With “millions of foreclosures still ahead,” the NAACP’s silence is deafening.

Showdown on K Street

Thousands of protesters are expected to descend on downtown DC today to call out corporate lobbyists and the members of Congress who love them their campaign contributions.

Last week, the Service Employees International Union, the Public Accountability Initiative and the Campaign for America’s Future released the report, “Big Bank Takeover.”

The report found:

Throughout the financial reform debate, the finance industry has waged an unprecedented assault on the democratic process, spending an estimated $1.4 million per day to influence Congress and hiring 70 members of Congress and 940 former federal employees to lobby on their behalf. The six biggest banks – Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley, and Wells Fargo – account for a disproportionate share of this activity. In the two years since the first federal bailout of a big bank (Bear Stearns), these banks and their principal trade associations have hired over 240 former government insiders as lobbyists and spent hundreds of millions of dollars on an influence game designed to thwart reform, shape bailout programs and maintain their status as “too-big-to-fail” institutions.

The big banks have employed an unrivaled network of in-house lobbying teams, hired guns, industry associations, front groups and behind-the-scenes influence peddlers with deep connections to Congress and the Obama administration, including the leadership of the House Financial Services Committee, the Senate Banking Committee, the Treasury Department, and key regulatory agencies.

It’s time to make some noise.

What:    Showdown on K Street
When:   Today at 11:45 a.m.
Where:  McPherson Square

View Larger Map

Following the rally and march to the Bank of America branch across from the Treasury Department, the protesters will head to Capitol Hill to “reclaim our democracy.”

For more info, go here.

Transparency for Thee, but Not for NAACP

Two weeks ago, I wrote a post about Wells Fargo’s sponsorship of the NAACP’s 101st annual convention that ignited a controversy. The heat from bloggers smoked out NAACP President and CEO Benjamin Todd Jealous.

Ben defended the NAACP’s partnership with Wells Fargo on the grounds the agreement “improves their practices and increases their transparency in ways that go far beyond what we could win in court.”

But there’s nothing groundbreaking about an agreement that commits Wells Fargo to doing what it says it is already doing.

Don’t take my word for it. Click here for “Wells Fargo & Co. Responsible Lending Principles for Consumer Credit.” The page was last updated Oct. 1, 2009.

Also, Wells Fargo has had an African American Business Services program since 1998.

As previously noted, I know Ben. I should also note that Ben has called me, but I have not returned his call. The reason: I don’t want to hear that I should trust him and not my lying eyes.

Instead, Ben should just answer the questions:

How do the “fair mortgage lending principles” differ from Wells Fargo’s Responsible Lending Principles for Consumer Credit?

Was a formal partnership agreement signed? If so, how will it be enforced?

Does the NAACP have the resources to examine the lending practices of the fourth-largest U.S. bank with more than 27,000 employees?

How will the NAACP be able to succeed when the Treasury Department, after a $25 billion $36.9 billion bailout, has not been able to get Wells Fargo to change its behavior towards struggling homeowners or increase access to capital for small businesses?

The Service Employees International Union’s profile of Wells Fargo states:

• Wells Fargo put taxpayers on the hook for up to $36.9 billion in bailout funds and programs plus an unknown amount from the Federal Reserve's $8 trillion in emergency programs. This money was supposed to help the banks get the economy going again. But little of this money has gone to relieve struggling homeowners and increase the flow of credit to small businesses.
• Despite its large portfolio of at risk mortgages, Wells Fargo has started trial mortgage modifications for only 11% of its 292,515 borrowers who are eligible for the Obama Administration’s Making Home Affordable Program (and are at least 60 days past due). At Wachovia, which Wells Fargo acquired in 2008, the number is even lower, 2% of 74,231 eligible borrowers.

SEIU should demand that the NAACP answer the questions. After all, SEIU is mobilizing support for the “Showdown on K Street.”

SEIU and allies will call out lobbyists for Big Bank -- Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo -- who are using campaign contributions to weaken financial regulatory reform.

The New York Times reports the NAACP and SEIU are organizing a rally in October to “create momentum for President Obama and Congress to enact more progressive-minded legislation on jobs, a financial overhaul and other matters.”

In his blog post, Ben wrote the NAACP paid a price for filing the lawsuit against Wells Fargo:

It was not without a price. Just before I did so, I informed our board that we would need to revise down our corporate revenue projections because we would be bringing lawsuits against corporate supporters . . . .

[...]

Wells Fargo stopped supporting our national events shortly after we announced the suit.

Ben asserted the agreement “does not interfere with but complements lawsuits brought by cities which are largely for remunerative damages.”

We now know dropping the lawsuit has been remunerative for the NAACP. But the civil rights organization has not disclosed how much remuneration it has received from Wells Fargo.

In addition to sponsoring the annual convention, Wells Fargo is a co-sponsor of the upcoming Leadership 500 Summit.

There is no such thing as free money. The question remains: What is Wells Fargo getting in exchange for its corporate support?