Why Obama is having problems

Robert Borosage of the Campaign for America’s Future:

1. The left was right. The president is in trouble because his historic reforms were too timid, not too bold. The recovery plan wasn’t big enough. The banks were rescued, but not reformed and no heads rolled. These two alone have been lethal to the economy, to working people, and not surprisingly to the president’s popularity and Democratic prospects.

2. The left was wrong—but not because it was too independent, but because it was too cooperative. Instead of building an independent populist movement with a moral voice driving opinion outside the Beltway, much energy and resources were devoted to the legislative sausage-making process, largely in support of the president’s agenda. This White House would have been far better served with an independent movement, such as those FDR and LBJ suffered and benefited from. One result is that the ersatz Tea Party formations captured the voice of populist outrage.

3. The left isn’t the problem; the corporate wing of the party is. The left hasn’t gotten in the president’s way, for better or worse. It’s the corporate right of the party—the Blue Dogs and New Democrats—that have stood in the way. They joined with Republicans to weaken the recovery plan. Sen. Max Baucus did the dance with so-called moderate Republicans like Charles “Death Panel” Grassley that ate up the first year in useless negotiations. Blue Dogs largely sabotaged energy legislation. New Democrats weakened already inadequate financial reforms. And the deficit hawks now sabotage needed jobs programs in an economy in big trouble. The problem with the left is that it has been too weak, not too strong.

4. The left hasn’t been a rebel; it’s been too good a soldier. Amazing that the White House would be upset at carping from the Beltway left which has embarrassed itself by its willingness to absorb insult and salute. Women rallied to support a health care bill that weakened choice. Progressives supported the bill despite the president’s unwillingness to fight for a public option, the taxes on good (read union) health care plans, and the grotesque deal with drug companies to sustain the ban on Medicare getting bulk price discounts. Environmentalists went so far as to embrace off-shore drilling in the failed effort to get the energy bill. Black leaders like Al Sharpton argued against any targeted economic programs, even as the African-American community was suffering depression levels of misery in the economic collapse. The antiwar movement gave the president a pass on Afghanistan. Gay people have been remarkably patient at delay in repealing the indefensible don’t-ask-don’t-tell policy. Progressives pushed financial reform hard, even after the Treasury Department helped defeat amendments to break up the big banks and more.

5. The White House has been hurt less because the left is critical, but because the White House isn’t listening. The left correctly understood the White House faced a pitched battle over the direction of the country, not a post-racial, pragmatic, bipartisan era of good feelings. The president’s search for bipartisan cooperation compromised his greatest asset — the bully pulpit. From day one, he should have been teaching Americans, over and over, how failed conservative ideas and policies had driven us over the cliff, just as FDR and Ronald Reagan had done from opposite ends of the political spectrum. The failure to do that has allowed conservatives to revive without changing a whit. Now, three months from the election, the president says he’s ready to draw the contrast and start pushing, far too late.

6. Reality counts. Gibbs accuses the professional left of being congenitally dissatisfied. I should hope so. But the White House problem isn’t temperament, it is reality.

Hooray for Governor Patrick

Three cheers for Governor Patrick for standing firm against the wrong for Massachusetts Gambling bill the legislature sent him.

BOSTON – Saturday, July 31, 2010 – The following is a statement from Governor Deval Patrick.
“The decision we make to expand gaming in Massachusetts will impact our state for decades. We have to get it right. Destination resort casinos will bring thousands of new jobs and increased economic development. Slots parlors will not. That is why I proposed licensing up to 3 destination resort casinos, and chose not to include slots parlors in my original bill.

“I believe that the bill before the Legislature provides for more licenses than the market can bear, and will therefore not produce the job creation and economic benefits that destination resort casinos would provide. In addition, the inclusion of two slots facilities for the tracks brings social costs without the benefits, and amounts to a “no-bid” contract for the track owners. I have been clear from the beginning that is not something I can accept.

“I have proposed a compromise that provides for one slots facility in addition to destination resorts, so long as that competition for that license is open and transparent. The Legislature has so far rejected that compromise.

“If the Legislature insists on sending me their gaming bill in its current form without addressing these concerns, I will send it back for amendment. The amendment will largely be the full text of the destination resort casino bill passed by the Senate last month, which is similar to and based on the legislation I filed in 2008.

“This amendment keeps faith with my convictions about the best long-term interests of the Commonwealth and with our shared interest in job creation. I hope the Legislature will see their way to enact the amendment. However, if the House and Senate choose to send back a bill with two slots facilities and without a truly open and competitive licensing process, I will veto that measure.

“Whether we ultimately agree on a gaming bill or not, it is imperative to the people of the Commonwealth that we see final action on the other pending measures that will expand job opportunities and on which there is support in both houses. Bills are ready for final action to promote further economic growth, to gain access to credit and lower health insurance premiums for small businesses, to reform our broken CORI system and enable former offenders to get back into the job market, and to lower energy costs by enabling more wind power. They all deserve favorable action before the Legislature adjourns tonight.”

Popular ‘Zero Down’ Mortgage Program Makes Comeback

The Wall Street Journal
Erick Moore used a no-money-down USDA-backed loan to buy his four-bedroom house outside Raleigh, N.C.

One of the nation’s last sources of no money down financing for home loans appears to be making a comeback: Legislation that restores a Department of Agriculture home-buying program is headed to President Barack Obama’s desk for signature.

The legislation makes the USDA’s Single-Family Housing Guaranteed Loan Program self-sufficient, the National Association of Realtors reports. Borrowers will have to pay a higher “guarantee fee” of 3.5%–essentially upfront mortgage insurance–but the fee can be folded into the mortgage.

Buyers won’t mind paying a bit more in fees, says Sue Botelho, a senior mortgage advisor with Waterstone Mortgage Corp. in Ft. Walton Beach, Fla. “It’s great news,” she said. “It’s a huge part of my business. I am thrilled.”

Also happy is LGI Homes, a Texas builder that caters to USDA buyers. Chief Executive Eric Lipar estimates he’s lost 100 sales in the last few months.

“Once funding’s officially in place, we’ve got customers waiting,” he said.

The USDA wasn’t immediately available for comment.

As we’ve reported, the program offering no-money-down loans in certain parts of the country for low- and middle-income borrowers, exhausted its $13.1 billion funding earlier this year, leaving some would-be buyers fearful their financing would fall through. USDA loans were particularly popular this year as first-time buyers tapped the government’s federal home buyer tax credit. They have until Sept. 30 to close.

Despite the last-minute save for USDA borrowers, industry watchers haven’t stopped criticizing zero-down deals-given the role they played in the housing crash. The USDA program is considered safer because up to 90% of the purchase amount is guaranteed, meaning the agency will pay should the borrower default.

The USDA has previously said that last fiscal year’s foreclosure rate was 1.72%, well below the Federal Housing Administration’s 3.32%. Borrowers also can’t make more than 115% of a county’s median income, preventing McMansion-sized loans: The average USDA loan is $112,000.

The strong guidelines weed out potentially troublesome borrowers, Ms. Botelho said. “When they approve a loan, it’s a very, very good loan,” she said.