"Every Tool In The Tool Kit"

I meant to write about this end of year markedly ridiculous Obama Administration puff piece by Ezra Kiein before, but work and college football got in the way. I just will point to one part to give you the flavor of the nonsense:

In housing [. . .r]ather than fundamentally reform the market, the administration and Federal Reserve focused on backstopping it. Buying a house in 2009 and 2010 was little different from 2004 and 2005. What had changed was the Fed using every tool in its toolkit -- and a few that people didn't even know were in there -- to keep interest rates low, the federal government handing first-time home buyers $8,000 to get into the market, and Fannie Mae and Freddie Mac buying virtually every mortgage that was issued.

(Emphasis supplied.) What absurd claptrap. The Obama Administration did virtually nothing to effectively address the homeowner crisis in the country and indeed, the results demonstrated that. The key failure was, of course, HAMP. What the Obama Administration did regarding the homeowner crisis was protect lenders, not homeowners. The policy was unmitigated disaster.

But in Ezra Klein's world, this was using "every tool in its tool kit." Just ridiculous.

Speaking for me only

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    To quote David Mamet... (5.00 / 2) (#1)
    by Dadler on Tue Jan 04, 2011 at 11:29:58 AM EST
    ...from "Glengarry Glen Ross"

    ROMA: You f-cking sh-t. Where did you learn your trade?  Whoever told you you could work with men? [...] You f-cking child.

    backstopping (5.00 / 3) (#2)
    by Dadler on Tue Jan 04, 2011 at 11:34:05 AM EST
    I can't help laughing at this. Might as say the Titanic didn't so much sink as stop floating.



    Yup (5.00 / 1) (#4)
    by TeresaInSnow2 on Tue Jan 04, 2011 at 11:47:48 AM EST
    To people like Ezra, if a policy was enacted -- any policy -- then the problem was fixed.

    Clear skies initiative
    Healthy Forests initiatives
    "Affordable" "care" act.

    All have lovely names and do the opposite of their names.


    A technique perfected by W. (none / 0) (#5)
    by oculus on Tue Jan 04, 2011 at 12:05:05 PM EST
    Actually, (none / 0) (#8)
    by Zorba on Tue Jan 04, 2011 at 12:24:22 PM EST
    perfected by George Orwell.  In his novel Nineteen Eighty-Four.  War is peace.  Freedom is slavery.  Ignorance is strength.

    So true. (none / 0) (#9)
    by oculus on Tue Jan 04, 2011 at 12:31:44 PM EST
    If "tool" is meant to describe (5.00 / 1) (#3)
    by Anne on Tue Jan 04, 2011 at 11:39:54 AM EST
    the people involved in making sure the lenders didn't suffer, it works.

    In all other respects, it fails.

    Almost nothing was done to help people stay in their homes - and HAMP probably did more harm than good, especially for those who were current on their mortgages, but needed some relief via modification; many of those people, who went into HAMP with decent-to-good credit ratings, had their credit ruined, never got the modification they sought and still lost their homes.

    The "tools" in the administration's "toolkit" stood by while homes in entire neighborhoods were vacated and stood empty, further depressing the values and putting more and more people underwater in their loans.  Instead of trying to stop the snowball from rolling down the entire mountain, these "tools" just got out of the way and watched it happen.

    And then blamed the greedy deadbeats who got what they deserved.

    There are a lot of things this administration should be ashamed of, and this mess with homes and mortgages and foreclosure fraud that has elicited little more than a shrug is certainly one of them.

    Wait for it: the admin. is the "tool" (5.00 / 1) (#6)
    by oculus on Tue Jan 04, 2011 at 12:06:09 PM EST
    of Wall Street and the banks.

    Oh sure, if you were trying to (5.00 / 1) (#7)
    by ruffian on Tue Jan 04, 2011 at 12:11:20 PM EST
    buy a house in 2009-10, things were great! Low interest rates, half the price in some areas. Trying to keep one or sell one on the other hand was a different story. The administration did next to nothing to help that particular group.

    In actual fact (none / 0) (#10)
    by sj on Tue Jan 04, 2011 at 12:39:47 PM EST
    I'm not in a position to take on a[nother] mortgage, but in principle I agree with Atrios.

    Do not buy a house until this behavior is stopped with criminal prosecutions.

    Good point (none / 0) (#11)
    by ruffian on Tue Jan 04, 2011 at 01:08:45 PM EST
    Not so great if you can't get clear title.

    Well.... (5.00 / 1) (#12)
    by Edger on Tue Jan 04, 2011 at 01:17:42 PM EST
    the administration used Ezra, didn't they? Along with a few other tools in mainstream media?

    Yes (5.00 / 2) (#19)
    by smott on Tue Jan 04, 2011 at 04:02:42 PM EST
    The biggest tool in that piece of crap article is Young Ezra himself.

    It's astonishing to see these guys throw their souls under the bus.


    just have to say (5.00 / 1) (#13)
    by The Addams Family on Tue Jan 04, 2011 at 01:21:06 PM EST
    Joseph Lelyveld in his review of George W. Bush's Decision Points in the New York Review of Books alludes to what happens to "any presidency in which a frozen moment on camera can come to seem more significant than a policy failure or success on a complex, urgent matter"

    & i just cannot help thinking of this

    historically LOW ... (5.00 / 1) (#14)
    by nyrias on Tue Jan 04, 2011 at 02:12:37 PM EST
    interests rates are benefiting all the homeowners.

    In fact, last time I check, rates are around 4%. That can benefit first time owner, as well as people who can refinance.

    The mortgage delinquency rate is 6.21% by the end of 2010 and expected to fall. That means that mortgage modification can at most help a very small fraction (less than 10%) of the home owner while a low interests rate benefit most.

    My friend, this was ALL a scam (5.00 / 1) (#28)
    by Dadler on Wed Jan 05, 2011 at 10:55:22 AM EST
    We KNOW what happened: mortgages were given out like free candy ON PURPOSE (hell, plenty of buyers were hoodwinked into bad ARM mortgages when they qualified for fixed rates, the stories are rampant). Those sh*t mortgages were then fraudulently packaged as gold, sold off to others for short-term profit AND THEN those who sold the sh*t then went to the Wall Street Casino and bet AGAINST all that debt they KNEW was bad.

    Good lord, it's a clear and played out scam, and it's still going on.  Foreclosures are rising, the "rocket docket" corrupt like foreclosure courts are running hot, all so the few people still clinging to their houses of hope can have EVERYTHING finally taken. The masters get to profit from their scheme, from the economic disaster they created by treating houses and peoples' lives like so many matchsticks (hello government bailout!), and I guess they get to take the houses, too. Even if they've so criminally gamed or lost the paperwork that it's not close to legal.  Meanwhile, if a homeowner can't find a paper or has a number wrong, it's over, no second chances.

    The entire system is corrupt from soup to nuts. We can pretend it isn't and try to go on as usual, but it won't work. This place is over.


    Once they figured out how to raid the (none / 0) (#30)
    by ruffian on Wed Jan 05, 2011 at 06:26:18 PM EST
    cookie jar they kept it full by inflating the prices of the homes and thus the size of the principle. Fraud from end to end.

    oh ... (none / 0) (#15)
    by nyrias on Tue Jan 04, 2011 at 02:13:04 PM EST
    20-25% (last stat I saw) (none / 0) (#16)
    by ruffian on Tue Jan 04, 2011 at 03:17:00 PM EST
    of homeowners are underwater on their loans and cannot refinance. Most of these are not delinquent (yet. Low interest rates do not help them at all. Mortgage modification to get them closer to surfacing would help them.

    Latest stats (none / 0) (#17)
    by ruffian on Tue Jan 04, 2011 at 03:19:52 PM EST
    22.5% nationally, much higher - in the 40% range - in FL and NV.

    Since we are talking about national policies .. (5.00 / 1) (#18)
    by nyrias on Tue Jan 04, 2011 at 03:25:31 PM EST
    let's stick to national numbers. Surely lower interest rates benefit fewer in FL & NV, it benefit MORE in other states.

    Even taking your 22.5% number .. almost 80% of the home owners can benefit from lower interest rates. And that is ONLY the existing ones, without counting FIRST TIME buyers.

    You can't argue something that can benefit 77.5% of the home owners is bad?


    No, (5.00 / 1) (#24)
    by bocajeff on Tue Jan 04, 2011 at 07:26:53 PM EST
    It only benefits those who are buying and those that have the ability to refinance. This isn't all the population nor many homeowners. If you lost your job, if your credit score lessened, if the value of your home dropped (elephant in the room), if you can qualify, if the closing costs don't eat into the savings, then the low rates have helped you very, very little.

    I remember being in Chicago on a cold December day and a woman gave me a some gloves to keep my hands warm. A beautiful gesture. Problem was I was only wearing a sweater and the rest of my body was freezing. But at least interest rates are low...


    I'm not arging against low interest rates (none / 0) (#29)
    by ruffian on Wed Jan 05, 2011 at 06:20:40 PM EST
    Good for the people that can take advantage of them. But it is by no means everyone, and not a solution to the mortgage crisis in the hardest hit areas.

    every tool (5.00 / 2) (#23)
    by dandelion on Tue Jan 04, 2011 at 06:17:08 PM EST
    I think the objection is to Klein's characterizing Obama as having used "every tool in the toolbox."  The plain fact is that any reasonably well read student of history knows that just ain't so.  This is the real crime, in my opinion, of the Obama administration:  they didn't have to look hard for a roadmap out of where we are, the map was charted in the 1930s.  We KNOW WHAT WORKS.  Actually using every tool in the toolbox to help homeowners would mean, for instance, an HOLC program to directly refinance troubled mortgages.  It might have meant something like bank holidays and FDIC restructuring of troubled banks.  It might have meant a WPA program to provide income to people struggling to stay IN their homes.  Etcetera etcetera.  Some of this would have been difficult to get through Congress, yes - but again, history is a guide:  much could have been done through executive action alone, given sufficient will, sufficient courage.

    It is just flat out disingenous to say that this administration has used "every tool in the toolbox."

    When Klein writes something like that, I have to wonder about the depth and quality of his education.

    helping homeowners != helping lenders (none / 0) (#26)
    by wsn on Wed Jan 05, 2011 at 08:19:02 AM EST
    But the goal wasn't to help homeowners.  It was to keep lenders lending.

    I think that is stupid.

    But helping homeowners was not Obama's goal.  Which was Klein's point.


    It depends on how you define the problem. (none / 0) (#21)
    by nyrias on Tue Jan 04, 2011 at 05:36:48 PM EST
    If you define it narrowly as keeping the few percentage point delinquent home owners in their homes, Obama's administration is not doing such a godo job.

    If you are talking about if he is helping home owners in general, and if you credit him for keeping interest rates low (which in itself is debatable), then his policy is helping home owners.

    A low interest rate is not going to get people to buy homes, it also make existing homes more affordable cause people can refinance. In fact, it is taking money from lenders to borrowers. Since it is a zero-sum game, one dollar of interests i pay LESS is one dollar profit loss to borrowers.

    I think (none / 0) (#25)
    by bocajeff on Tue Jan 04, 2011 at 07:30:25 PM EST
    your numbers are overly optimistic. First of all, when you say homeowners you have to factor into those who own their homes with little or no mortgage (last stat I saw was about 30% of all homeowners), and then those who are making very good livings. To the lower class who live in homes that have dropped in value, who have lost jobs or had wages cut, then there are problems.

    I guess you're right. Sacrifice 10% of the population for the betterment of 90% sounds like great fiscal policy.


    When the tools in the toolkit (none / 0) (#27)
    by jeffinalabama on Wed Jan 05, 2011 at 09:46:31 AM EST
    are a membership card to the fancy club, an uncharged electric screwdriver, a flensing knife, and a worn nail punch. the analogy works.