Hagiography Gone Wrong

When historians look back and wonder how we got into this shitty mess (assuming there are still historians), there will be one thing Obama did very, very wrong. It wasn’t healthcare, though maybe next time, Democrats should design a program that doesn’t penalize the lower-middle class and middle class–like some of us who lived under Romneycare warned would happen. But Obama ultimately wasn’t in control (conservative Senate Democrats share the blame for this). Wasn’t that.

While a larger Keynesian program was needed, the dominant ideologies of our time were (and still are) inadequate to the task, though he didn’t need to embrace austerity after the 2010 losses so tightly. In his defense, there is no way the Democrats of 2008-2009, nevermind the Republicans, would have considered a spending bill over a trillion dollars. This didn’t help, but I don’t think this was a fatal flaw either, although the next time we do this, publicizing and politicizing the crap out of this would help. Sell the sizzle and the steak.

What killed Democrats, even though the illness wasn’t recognized until Nov. 9, 2016–and despite the constant down ballot shellacking the Democrats took for years under Obama–was his reaction to the housing crisis. There were two things he needed to do, and which he failed to do. Moreover, he had complete authority and ability to do these things–there’s no conceivable way the Green Lanternists can claim otherwise.

The first thing he should have done is prosecuted people up and down the mortgage chain for fraud, from lying appraisers (though they, on the whole, were the most honest of the bunch), to the loan originators, all the way on up to the CDO merchants at the investment banks. People, left, center, and right, hated these bastards. Not only would this have been popular–though a candidate who spent a lot of time raising money from Wall Street might not realize this–but it also would have put an iron fist in Obama’s velvet glove (the velvet glove by itself doesn’t do much).

Second, there should have been no bailout whatsoever unless the banks agreed to mortgage cramdown. In short, mortgages are reset to the current market value, and the banks take a partial haircut (along with their investors and shareholders) with the government eating the rest (a 50/50 split would be good). Down the road, if homeowners sell the rescued home, a large share of the profits (~50%) is paid in taxes (you get to keep your home, but there’s a cost to you as well). If this meant some of the large banks went under, well, we know how to unwind banks (we’ve been doing that since the Great Depression)–and there were certainly a lot of unemployed people in finance who needed the work. But we got a program inaccessible to millions of households, and when people could use it, was woefully inadequate to the task at hand. Again, it’s important to note that Obama had all of the authority and funded he needed to do this. Instead, he used that authority to “foam the runway” for the banks, as opposed to providing a life-line for homeowners.

Politically, this would have been incredibly popular: no one gets a free ride, while, at the same time, the people who caused the Collapse of Big Shitpile would have been held accountable. Despite all of the other unprogressive, neo-liberal shit Democrats have done, this would have gone a long way in denting Republican faux populism. And a lot of middle class homeowners would have been very grateful.

But now, we have a narcissistic conman who will strip the Republic down to the copper fittings (when he’s not grabbing Lady Liberty by the pussy). And a couple of good decisions in 2009-2010 might have averted this.

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5 Responses to Hagiography Gone Wrong

  1. Victor T – Bald, Divorced, Fat, Poor, Short and Ugly to boot!
    Victor Tirumalai says:

    Hi Mike,

    One other point I would add to this.

    Obama won in 2008 as an outsider. After he won, he did not build the party in HIS image. By that I mean, the same grifters brought into the party apparatus by the DNC crowd in the 90’s were left to run things at the party level. Heck they even got rid of Howard Dean because he was not ‘their kinda guy’. The fact that someone like DWS was left as the DNC head even after the 2014 debacle, the complete annihilation of the party at the state and local level in the 2010’s; is telling.

    The same group of people who ran the HRC campaign in 2008 when she lost to an outsider in Obama, were running her 2016 campaign. After 2 years of bullying and making sure her candidacy would not be really opposed, the DNC was blindsided by the popularity of the Sanders campaign. I think these same idiots were also blindsided by Obama in 2008. That is simply because they cannot relate to the electorate outside of the bicoastal democratic strongholds.

    This will be Obama’s lasting regret, I think; that he did not send Plouffe, or someone like him, after 2008 election with a mandate to get rid of the Clintonistas in the party apparatus and build it in the image of what he wanted. Instead Plouffe tried to set up something which he could control using the mailing list from Obama’s 2008 campaign and failed miserably to build a lasting coalition.

    Why do people who have have a hand in running the Democratic party from 2008 on still have any power? Why is Nancy Pelosi still the minority leader? Why is Donna Brazile listened to? Why do Podesta and Neera Tanden still have a say?

  2. Min says:

    I agree about going after the banksters and other fraudsters. However, if Obama had committed to economic recovery in 2009 – 10, despite the advice of Larry Summers and others, enough results would have been apparent in early 2010 that Santelli’s rant — against bailing out homeowners! — would have fallen on deaf ears. The Tea Party did not arise just because people were tired of taxes, but because they were not sharing in an economic recovery. In 2008 Obama’s Yes We Can speech energized people. If he had kept that message up, in FDR fashion, Congress would have been hard pressed not to vote for a sustained stimulus in 2009 and 2010, however much money it took, and however long it took.

  3. no says:

    Hank Paulson and Bush had already negotiated the bailout terms with GS, Citi, JPM, and AIG.

  4. Pingback: Hagiography Gone Wrong | Barking at cars

  5. realist says:

    ugh more of this ignorance there were no prosecutions because there were no crimes despite what you and the rest of your foaming at the mouth mob thought

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