As I (and many others) have noted on numerous occasions of late, the shallow notion that everything philosophical and ideological that occurs inside the Beltway is categorized as either "red" or "blue" is, in fact, a grave misconception. That is the very definition of "the kabuki." It's not about blue Democrats versus red Republicans. It's about the money. Yes, in Washington, "green" trumps red and blue every day of the week ending in a "Y."
As Matt Taibbi just reminded us on his blog, yesterday, in: "Best Way to Raise Campaign Money? Investigate Banks," perhaps nowhere has this reality--that green trumps red and blue--been more self-evident, over the past few years, than in the manner in which both major political parties have, ultimately, ended up siding with Wall Street against Main Street when push comes to shove in our nation's foreclosure fraud crisis.
Indeed, this is the biggest D.C. bipartisan "consensus" of all.
First, before diving into Taibbi's latest, a little philosophical background, from early yesterday (Thursday) morning. Naked Capitalism Publisher Yves Smith published a piece on her blog entitled, "Musings on Plutocracy," where she spent a majority of the post noting David Runciman's positive London Review of Books' critique of Jacob Hacker's and Paul Pierson's book, "Winner-Take-All Politics." Here's part of the proverbial money quote from it...
Musings on Plutocracy
Yves Smith
Naked Capitalism
April 21, 2011 4:05 AM
...
[From Runciman]...Hacker and Pierson’s argument is really a return to a much longer-standing critique of democracy, one that flourished during the 1920s and 1930s but was supplanted in the postwar period by expectations of rational behaviour on the part of voters. This traditional critique does not see the weakness of democracy as a matter of the voters wanting the wrong things, or not really knowing what they want. They know what they want but they don’t know how to get it. It’s because they don’t understand the world they live in that democracy isn’t working. People aren’t stupid, but when it comes to politics they are ignorant, lazy and easily satisfied with pat answers to difficult questions. Hacker and Pierson recognise that it has become bad manners to point this out even in serious political discourse. But it remains the truth. ‘Most citizens pay very little attention to politics, and it shows. To call their knowledge of even the most elementary facts about the political system shaky would be generous.’ The traditional solution to this problem was to supplement the ignorance of the voters with guidance from experts, who would reform the system in the voters’ best interests. The difficulty is that the more the experts take charge, the less incentive there is for the voters to inform themselves about what’s going on. This is what Hacker and Pierson call the catch-22 of democratic politics: in order to combat what’s taking place under the voters’ radar it’s necessary to continue the fight under the voters’ radar. The best hope is that eventually the public might wake up to what is going on and join in. But that will take time. As Hacker and Pierson admit, ‘Political reformers will need to mobilise for the long haul.’
Yet time may be one of the things that the reformers do not have on their side…This, again, is one of the traditional critiques of democracy: while decent-minded democrats are organising themselves to make the world a better place, the world has moved on. In a fast-moving financial environment, it is usually easier to assemble a coalition of interests in favour of relaxing the rules than one in favour of tightening them. Similarly, it’s easier not to enforce the rules you have than to enforce them: non-enforcement is the work of a moment – all you have to do is turn a blind eye – whereas enforcement is a slow and laborious process.
This is a gloomy prognosis, but any realistic assessment is unlikely to be upbeat. I’d be curious to get reader input on both the Hacker/Pierson analysis and what remedies they see as viable.
From Taibbi on Thursday...
Best Way to Raise Campaign Money?
Investigate Banks
Matt Taibbi
Rollingstone.com
April 21, 9:27 AM ET
A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller--who is coordinating the investigation into the banks’ improper mortgage dealings--increased his campaign contributions from the finance sector this year by a factor of 88! He has raised $261,445 from finance, insurance and real estate contributors since he announced that he was going to be coordinating the investigation into improper foreclosure practices. That is 88 times as much as they gave him not over last year, but over the previous decade.
This is about as perfect an example of how American politics works as you’ll ever see. This foreclosure issue is a monstrous story that is somehow escaping national headlines; essentially, all of the largest banks in the country have been engaged in an ongoing fraud and tax evasion scheme that among other things has resulted in many hundreds of billions in investor losses, and hundreds of thousands of improper foreclosures. Last week, the 14 largest mortgage lenders a group that includes bailout all-stars like Citigroup, Bank of America and Wells Fargo, managed to negotiate a settlement with the federal government that will mandate some financial relief to homeowners who have been victims of improper foreclosure practices. It’s unclear yet exactly what damages and fines will be involved in the federal settlement, or how many homeowners will be affected. But certainly there are some who believe the federal settlement was a political end-run around the states’ efforts to extract their own deal from the banks.
Put it this way. If the banks had to pay what they actually owed – from the registration taxes/fees they avoided by using the electronic registry system MERS to the money taken from investors in toxic mortgage-backed securities to the fees and payments stolen from homeowners via predatory loan practices and illegal foreclosures – they would probably all go out of business. That’s how much money is at stake here: the very future of financial giants like Bank of America and Citi and JP Morgan Chase is hanging to a very significant degree on the decisions of politicians like Miller...
And, from Yves Smith, whom the Columbia Journalism Review has noted as being the go-to source--ahead of the MSM and the rest of the blogosphere--for this entire mortgage/foreclosure fraud story from the get-go...
(Diarist's Note: Naked Capitalism Publisher Yves Smith has provided written authorization to the diarist to reprint her blog's posts in their entirety for the benefit of the DKos community.)
Matt Taibbi Follows the Money in Iowa AG Tom Miller’s Faux Tough Posture in 50 State Mortgage Settlement Negotiations
Yves Smith
Naked Capitalism
Friday, April 22, 2011 2:45AM
We’ve taken aim repeatedly at Tom Miller’s obvious soft touch toward banks in his role as lead negotiator in the 50 state attorney generals negotiation over foreclosure abuses. Some of his questionable actions:
Promising to put people in jail, then quickly reversing himself
Failing to undertake any meaningful investigations, which would have given the state AGs leverage in settlement talks
Not acting in a manner consistent with a lead negotiator role: negotiating AGAINST the AG group on behalf of the Administration, and springing a preliminary term sheet on them rather than involving them in developing it
Putting terms forward piecemeal, and in particular, not disclosing the terms of the release even to fellow AGs. In a deal, you make a complete offer and then see if the other side accepts or counteroffers. Would anyone deal with a homebuyer put in a bid for your home for, say, $220,000 and then came back the next day and said, “The tile in the master bathroom is kind of old, I want you to replace that too. Oh, and repaint it and the guest bedroom.”
We had assumed that the reason for Miller’s bending-over-backwards stance was that he was currying favor with the Administration in the hope of winning the nomination to head the Consumer Financial Protection Bureau. But Matt Taibbi has found what appears to be an even more logical explanation: out of state bank-friendly donors dumped lots of dough into Miller’s fundraising coffers. And I mean LOTS (at least by state AG standards). From Taibbi:
A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller – who is coordinating the investigation into the banks’ improper mortgage dealings – increased his campaign contributions from the finance sector this year by a factor of 88! He has raised $261,445 from finance, insurance and real estate contributors since he announced that he was going to be coordinating the investigation into improper foreclosure practices. That is 88 times as much as they gave him not over last year, but over the previous decade….
Put it this way. If the banks had to pay what they actually owed – from the registration taxes/fees they avoided by using the electronic registry system MERS to the money taken from investors in toxic mortgage-backed securities to the fees and payments stolen from homeowners via predatory loan practices and illegal foreclosures – they would probably all go out of business. That’s how much money is at stake here: the very future of financial giants like Bank of America and Citi and JP Morgan Chase is hanging to a very significant degree on the decisions of politicians like Miller.
Hence the sudden avalanche of money sent Miller’s way. The numbers are laughable. In 2006, out -of-state donors gave Miller’s campaign $10,508. For the 2010 cycle, that number was $497,357. Three lawyers by themselves – Al Gore’s attorney David Boies, plus Donald Flexner and Robert Silver, all partners in the firm Boies, Schiller and Flexner – gave Miller a total of $60,000.
So here we have it: yet another example of the best justice money can buy. Which means small fry like you and me go begging.
Yes..."So there we have it..." Or, is it: "So there they have it?"