Blame Enough to Go Around

Barack Obama won his party’s nomination by surfing a wave of indignant netroot folding cash, much of it inspired by a visceral dislike of the country’s 43rd president. There were many reasons for this of course; an infantile reaction to the 2000 Florida result – so contrary to their preferences -  the embarrassing awkwardness of hizzoner’s speech patterns to those who give over to soaring oratorical flights, the disappointed clucking of continental elites. W’s pround disdain of nuance while responding to existential threats. And so on.

In the 2007-2008 primary campaign, Obama’s policy differences with Hillary Clinton were vanishingly small, while the GOP’s deep unpopularity in 2007 seemingly rendered meaningless Kerry-esque calculations of general “electability”. The job was relatively easy for Democratic Party delegates, no matter how much drama they imbued the task with: Pick a standard bearer. Anyone would do. Winning or losing in the primary would come down to cash and tactics. After that they could have a coronation.

My unscientific estimate is that a majority of the perpetually agitated Democratic primary base preferred Obama because of his brave stance opposing the Iraq war as an Illinois state senator. This was the chief distinguishing factor between their otherwise indistinguishable policy positions: A war that Ms. Clinton supported while in the US Congress, the vote in favor for which vote she famously refused to repudiate. It was Bush’s war, the sour focal point of progressive discontent around which an otherwise inchoate anger coalesced in physical form.

The minority portion of his support – I suspect the circles overlap – imagined that his election would somehow bleach our national birth stain. Or if not, at least thrust his advocates to a position of presumed moral advantage over whatever portion of the electorate had the temerity to choose otherwise, for whatever reasons of their own. The racist bastards.

It’s been a long eight years for some of us. You take what you can get.

But in a post-Petreaus era, a stabilizing, democratic Iraq – secure in its own borders, at peace with its neighbors and no threat to the world – has fled the headlines and no longer energizes our national discourse. And Obama’s father -  a transient visitor to the US from Kenya  – had no “legacy of slavery” to contend against, a fact which makes his son an imperfect vessel for racial expiation, as does his inconvenient mother, middle class and white. But all of this is unimportant to this fan base: We speak of dreams.

While dreams are sufficient to mobilize the predisposed, they are generally insufficient to attract sufficient numbers of the vast, muddled middle. The “undecideds” of no particular political philosophy who enter the voting booth inspired more than anything else by the news of the day. If it were not for the financial market meltdown I do not know what we would talk about between now and 4 November. Sarah Palin’s tanning bed, I suppose.

But now we do have a financial crisis, so that has become the tocsin to thump for political advantage. Scaring the straights to the exits might not make for good economic policy, but it just might get you first past the gate. Time to focus on what’s important.

Barack Obama blames the Bush administration – and by implication, the “McSame” crew – for letting everything financial go to hell in a hand basket. After all, he was in charge of every dollar in an almot $14 trillion economy over the last eight years. If the hedge fund, secondary mortgage market and arbitrage experts imperfectly estimated their own risk exposure, it ought to have been the role of Wise Government Bureaucrats to notice this, step in and regulate them more closely. If not in the federal bureaucracy, then at least in Congress. Although, for her own part, Nanci Pelosi declines a groat of guilt attaching to her own side. It seems there were no Democrats in Congress until 2006, and from that time to this they have been busy with their own little dramas.

Except, you know: Wait. From 2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Nice idea, yah? Didn’t work out so well though. Not everyone agreed:

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session…

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

Blame enough to go around.

(H/T Tom Maguire)