WASHINGTON — A top Obama administration official on Thursday questioned the scope of the state and federal investigations into alleged mortgage abuses and “illegal” foreclosures perpetrated by the nation’s largest mortgage companies, marking the first time a senior White House official publicly broke ranks with the administration over the issue and raising fresh questions about the wisdom of the government’s rush to settle with the firms.
Elizabeth Warren, a senior adviser to President Barack Obama and Treasury Secretary Timothy Geithner, told a congressional panel that government agencies may not have sufficiently investigated claims that borrowers’ homes were illegally seized by banks such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial.
“I think there’s a real question about whether there’s been adequate investigation,” said Warren, the temporary custodian of the Bureau of Consumer Financial Protection, a new federal agency charged with protecting borrowers from abusive lenders. Her statement came in response to questions from Rep. Trey Gowdy (R-S.C.), a former federal prosecutor who asked Warren why her agency needed to oversee such abuses when the U.S. Department of Justice is already probing such matters.
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Let’s take a little stroll down memory lane. Back in January 2009, the very prescient Digby wrote this post after learning that Obama was going to hold a fiscal responsibility summit as one of his first priorities. See if it rings any bells. Is Obama is “winning” the debt ceiling debate – or is this more like a pro wrestling match?
Normally another Democratic run bipartisan commission on social security reform wouldn’t alarm me so much as annoy me. After all, Clinton was forced by the incoherent “centrist” Bob Kerrey into appointing a social security commission and Bush promised to appoint one after the failure of his attempt to privatize the system. But this time could be different. The scope and complexity of the economic crisis could lead to politicians rushing forward with some bad plans just to appear to be doing something.
I believe that everything about this is a huge mistake. It validates incorrect right wing economic assumptions, incorporates their toxic rhetoric about “entitlements,” focuses on the wrong problems and continues the illusion that social security is in peril when it isn’t. The mantra of shared sacrifice sounds awfully noble, but it isn’t very reassuring to talk about the government going broke at the moment, particularly when the cause of our problems isn’t the blood-sucking parasites who depend on government insurance when they can’t work, but rather the handiwork of the vastly wealthy who insist on operating without restraint and refuse to contribute their fair share. I would have thought that a bipartisan commission on financial system reform might have at least been on the agenda before social security.
Obama is empowering the Republicans and the Blue Dogs with this fiscal responsibility rhetoric and perhaps he believes they will reward him by acting in good faith. And maybe they will. Or perhaps he thinks he can jiu-jitsu the debate in some very clever way to actually bolster social security and enact universal health care. But it’s a big risk. I believe that all this talk about “entitlements” and fiscal responsibility will make it much tougher to sell universal health care and easier to dismantle some of the safety net at a time when many people have just lost a large piece of their retirements, their jobs and their homes. It’s very hard for me to understand why they think it’s a good time to do this.
I know it’s probably right that we give him a chance before we completely go postal about this, but I also know that if this were a Republican saying these things I’d certainly be doing everything in my power to oppose it. But then that’s the beauty of the Nixon goes to China gambit, isn’t it? It neatly shuts down the most fervent opposition. That’s why it’s so frightening. He might just get it done.