New York Times — U.S. Is Finding Its Role in Business Hard to Unwind
The reason the executive branch needs more regulatory control over the financial sector is that otherwise it has to take direct control of companies. That’s the argument from the Obama administration and allies that runs through the piece by writers Edmund Andrews and David Sanger.
As president Obama prepares to make his speech rearticulating and expanding his vision of a new set of financial regulations and consumer protection in New York today, his team, including Economic Vizier Larry Summers, explain the “be regulated or be nationalized” argument.
In the process, Andrews and Sanger point out how big the nationalizations so far have been and how hard it is going to be to get the country out of the private sector – that you can put government-backed insurance on a car you bought from the government with a government-backed loan and park it in front of the house on which the government holds the mortgage.
It’s the housing market that may prove the hardest to get the government out of:
“The central bank has acquired more than $700 billion in mortgage-backed securities so far, and officials have said they will buy up to $1.25 trillion — a goal that should take the Fed until early next year. To help Fannie and Freddie raise the money they need to buy mortgages from lenders, the Fed is also buying $200 billion of their bonds.
All told, the government is propping up almost the entire mortgage market and, by extension, the housing industry.
‘It will be very difficult to unwind, having stepped in as big as they did,’ said Howard Glaser, a senior housing official during the Clinton administration and now an industry consultant in Washington. ‘There is no structure, no mechanism, for private investors to come back into the market.’”
Wall Street Journal — Obama, Treasury Discuss ‘Next Phase’
Writers David Wessel and Elizabeth Williamson got a look at the briefing for the president’s pitch on the next evolutionary leap in the role of the federal government in the economy – from parasite to host. Or encouraging “a period of stabilization, rehabilitation, and rebuilding.”
Obama will call on Congress to pass sweeping reforms, including making the Federal reserve a hyper regulator and new rules for abstruse financial instruments.
But the president seems to be most focused on taking credit for averting a global depression.
“The report discloses no new policies, but describes ways in which lending under emergency initiatives — Fed and Treasury support of money-market mutual funds, for instance — is being reduced, both because of waning demand and by previously announced decisions to allow some to expire. It offers no clues to the administration’s plans for restructuring mortgage giants Fannie Mae and Freddie Mac, which are now controlled by the government and dependent on continued infusions of taxpayer money.”
Reform Opposition Is High but Easing
Well, two points is easing, I suppose.
The Post/ABC poll taken after President Obama’s appeal to Democrats for unity on health care last week does seem to have allowed the party to close ranks to some degree. Most polls have shown that while opposition to the plan remains high (48 percent), Democrats are rallying to the president’s cause.
Levels of support (46 percent) are virtually unchanged from August but another 3 percent of supporters (now 30 percent) “strongly support” the presidents’ plan. Similarly, strong opposition dropped to 36 percent from 40 percent.
It’s a small gain in the voter intensity war on which the Left will hope to build, but the trend line still shows that 54 percent of respondents like the plan less the more they hear about it, while 41 percent grow to like it more. And the president’s personal and job approval continue to fall.
As I wrote in my column today, the president will need plenty of goodwill on the Left because liberals will have to accept many mre defeats before final victory.
John Cohen and Dan Balz wrote a story, but it’s very confusing. You’d be better off just to look at the tables.
Wall Street Journal — Democrats Seek to Reprimand Wilson
One of the major problems the president has is that the Democrats in charge of Congress have the attention spans of May flies.
Speaker Pelosi and her team are going forward with their plan to shame Rep. Joe Wilson of “You lie!” fame by making him apologize on the House floor and making Republicans vote on a resolution of condemnation.
Wilson, who it turns out sounds like a very rational person and who has a good bipartisan record, seems to be handling it the right way by making Democrats deliver on their threat, a petty, small action after Wilson apologized and the president publicly accepted.
Writer Susan Davis explains:
“Mr. Wilson, in a statement, dismissed the resolution as ‘political partisanship.’ Mr. Obama, in an interview that aired Sunday on CBS’s ‘60 Minutes,’ suggested that a formal rebuke of Mr. Wilson would be a distraction from the larger debate. ‘I mean, it just becomes a big circus instead of focusing on health care,’ Mr. Obama said.
A vote would likely intensify simmering partisan tensions in the House, as lawmakers face off over health care, and fall along party lines. A spokesman for House Minority Leader John Boehner (R., Ohio) echoed the sentiment that such an action would be a distraction”
Politico — Democrats see race factor for Barack Obama foes
Writer Jonathan Martin takes a valuable look at how accusations of racism against President Obama’s critics has become a first response for many of his supporters.
With many rank and file Democrats claiming that opposition is a manifestation of Republican racism, the pressure is growing on party leaders and perhaps the administration to address the question.
“[Donna] Brazile said there was little upside in Obama’s administration weighing in on the racial debate. ‘You cannot have a conversation when the elephant in the room begins to dance,’ Brazile said. ‘For the White House to exhaust their political capital to make this a teachable moment – as they did with Gates and [Sergeant James] Crowley — would be hugely distracting. The president should continue to focus on jobs and healthcare.’
She added: ‘Everything in his in-box is already marked urgent.’”
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