What can the Dems do about 2014?

The Dems are facing a tough election this year, or that's how it looks at this point. Nate Silver is forecasting that the GOP gain a majority in the Senate. It might be the barest majority (just 51 senators) or up to 57. Or the GOP might not get the majority at all. What are the Dems doing about this?

In 2012, Democrats used a strategy of keeping quiet and taking victory from those right-wing crazies. Most of the GOP has learned from that, and they are toning down the crazy too, so the Dems are losing the advantage. They need other strategies, but it's not obvious to me what those strategies are. Here's what I've found from my internet searches:

• Get minimum wage referenda on state ballots to drive turn-out.
• Schedule symbolic votes in the Senate on wage issues. The bills won't pass, but will provide campaign fodder.
• Vague attempts at ACA fixes that help vulnerable red state Dem senators (or might help them except it's so vague).
• A strong get-out-the-vote effort that gets closer to presidential election numbers. The Dems didn't have this in 2010, and it would make a huge difference this year if they could do it.

I don't even think my usual prescription (make smart, centrist proposals) will work. The Congress locked into a two-year budget, so there's not much they can do about it. Any centrist proposals they make now look like 'too little too late.' Plus it will start an intraparty war, which can't help.

So I have no suggestions to help the Dems, and their own ideas don't seem enough (to me, at least). It's a grim picture, as this polling shows:

I think the Dems will lose the Senate this year. Furthermore, this shows how meager the Dem strategy has been for the past few years. It depended on the GOP craziness, and the GOP cooperated all too well. With the GOP playing it safe now too, they may have quite a big win due to midterm demographics and fatigue with the current regime favor them.

Image: breitbart.com

Extras. A Dem strategy blog: their round-up; a picture that's a bit brighter. Before it got complicated -- the outlook after the shutdown when the Dems could still count on GOP craziness. Even-handed analysis here.

Deconstructing claims about the mortgage crisis

Yet again I'm fighting with GOP partisans about what caused the mortgage crisis. The GOP partisans will say something like this: [click through to see comments]

"The crash was a direct result of Democrat policies forcing/allowing very risky lending. Get your history correct."

I won't repeat their entire narrative of how Dems forced banks to make risky loans to minorities, which were funneled through Fannie and Freddie, put the government on the hook, and all that bad paper caused the financial crisis of 2008 and subsequently the long recession.

Here's what I think happened, with me trying to be as fair as possible and without evidence to back each individual piece.

1. CRA (Community Reinvestment Act) forced banks to end their discriminatory redlining practices. This was a good thing. Banks had to loosen some of their lending standards. Perhaps there were quotas, and if so, I don't know if the quotas were fair or not. 
2. The results of CRA were good, so the programs were expanded, probably too much.
3. The managers of Fannie and Freddie wanted to collect higher salaries more in line with other majors bankers, so they lobbied for changes to allow them to become publicly traded companies. 
4. Somewhere along the way, Fannie and Freddie became big contributors to Democratic campaigns. That made it politically expedient for Dems to protect them and the GOP to attack them.
5. Other banks, such as the Wall Street firms, saw the kind of money Fannie and Freddie were earning, and wanted a big piece of it. They lowered their lending standards and flocked into the subprime market. (This bit is ignored by the GOP. See below.)
6. The GOP raised alarms about mortgage lending in 2003-2005, focusing exclusively on Fannie and Freddie, and ignoring the same or worse practices of the big banks. The Dems circled the wagons and defended Fannie and Freddie. 

That pretty much sums up the reason behind the GOP narrative about CRA, Fannie, Freddie, and the Dems causing the financial crisis.

What the narrative leaves out other players who had a much larger role in the financial crisis. The big banks envied the profits that Fannie and Freddie were raking in due to their unfair advantage in borrowing. The big banks went after the highest profit area, which was subprime lending, and they inflated number of mortgages a great deal. But all this occurred within a decades-long housing boom, a boom in mortgages, a boom in home equity lending, and a housing price bubble. I frankly don't know how much of the crisis was due to poor lending standards and how much was due to the housing bubble, or whether anyone can unscramble those pieces. However, it clearly wasn't all due to Fannie and Freddie.

Yet, when you read some explanations (like this), it seems that it was all Fannie/Freddie's fault:

"Moral hazard was everywhere and endemic. The biggest source was in the GSEs [Fannie and Freddie]. The GSEs were entirely moral hazard."

I have my own warnings: Beware of explanations that don't discuss the roles of private banks. Beware of explanations that don't have graphs. Graphs invariably show that private banks were huge players in the subprime mortgage business.

Image: ritholz.com

Beware narratives that say Fannie and Freddie weren't part of the problem. If that were true, why did they need almost $187 billion in bailout money?

Remember that the GOP weren't the thwarted would-be heroes. They went after Fannie and Freddie for political reasons, while using lending concerns as the pretext. This becomes clear when you realize that the GOP warnings completely ignored the even larger problems brewing at the big banks. The Dems, likewise, defended Fannie and Freddie for partisan political reasons. The alarms that should have been heard and heeded were smothered by politics. 

What I haven't worked out yet is why a crisis in bad housing securities became a more generalized financial crisis. There are plenty of explanations I could give off the top of my head, but I'm not sure they're right. I also don't know the role of other financial inputs such as collateralized debt obligations (CDOs) or credit default swaps. Understanding that may be beyond my capabilities. Frankly, I don't even know where to start to research on those aspects of the financial crisis. But I've researched enough to clearly declare bullshit on some of the claims, and back it up with solid data. Solid data - this is a good thing.

Summary of links:

• Biased blame on Fannie/Freddie with no graphs. It was so balanced it was reposted by the American Enterprise Institute think tank. (In case you missed it, that was sarcasm.)
• Lots of graphs, but less mention of Fannie/Freddie. Less biased, but still some, probably.
• Another graph showing involvement of Fannie/Freddie and asking questions about their role.
• My previous posts on this topic here and here.
• Testimony before a committee with a biased name (see below). However, this introductory paragraph floored me:

"Government housing policy failed homeowners and taxpayers and it is important to understand why. The GSEs contributed to the meltdown. The direct cause of the crisis was the proliferation of poorly underwritten and risky mortgage products. The majority of these products, and the most risky products, were funded through private label securitization." [emphasis added]

Finally, putting the conclusion before the research and evidence, presented to you by the House Republicans. You've got to love the balls it takes to do this:

Update 3/19/18. Of course partisan hacks still pretend the mortgage crisis was all due to those miserable Dems. Here's a reminder of who wasn't the boogeyman. Oh God, I wish the liars would stop.

What will the upcoming GOP Congress do?

So we're likely to have a GOP House and a marginally GOP Senate next year. What can we expect?

Per David Frum: The GOP will stop worrying about the deficit amid their rush to pay off their pals.

Daily Kos: It won't happen because we'll all vote and prevail.

Howard Kurtz: Twice the investigative fun! [That should help Hillary.]

Breitbart: Tea party will own the agenda. [That should help Hillary.]

Fiscal Times: No, moderate GOP senators will own the agenda (that is, what goes for moderate these days).

Norm Ornstein: Fights between Tea Party, leadership, and moderate GOP will prevent big reform proposals. Small bills will punish Dem constituencies to fund feel-good white-bread programs like pediatric medical research. Also, another vote for Twice The Investigative Fun!

So, what do I think? Well, I have to go with the past being indicative of the future. Throughout 2013, the GOP wasn't able to get it together. So I think skirmishes will continue within the party. Various pols will present their proposals and grandstand against rivals within the party. And yes, committee chairmen will run their grandiose investigations of various molehills.

I do have one caveat. If the leadership can unite the GOP during this year's campaign and they win some extra seats because of it, they may be able to keep that united front during 2015 and 2016. That's their best hope for capturing the presidency in 2016. But there are a lot of egos and a lot of pent up anger in the GOP, so I strongly doubt it will happen.

Larry Sabato's Crystal Ball

Image: centerforpolitics.org

Extras. Context and another map. My detailed look at the trends in party affiliation and the Senate.

The Political Lie Machine: Bottom feeding filter fish

According to a former BFFF (bottom feeding filter fish, or what I'll call 'scum suckers'), there is a good market for dirt on Democrats. Of course I've seen it. Someone sent Breitbart the video of Shirley Sherrod, either already cut or with suggestions on how to cut it. Same with the tape of Al Sharpton.

The libs and progressives do it too. Here's a case of wacko legislation just barely associated with a Republican state representative that went from Think Progress to Boston Globe, MSNBC, and Reason, and probably others.

Can you imagine if your job was to sift through millions of bytes of reports, etc., trying to find nuggets that have smear potential? Truth and reliability being optional, of course. Wow, that's the perfect job for a sociopath. Maybe it's even cheaper now with so many tech-savvy people needing a job (any job) to pay the rent.

I was able to find articles about two firms that do this kind of work: Bridge (working for Dems) and America Rising (working for GOP). They even faced off in the Virginia gubernatorial campaign last year. Check out their handiwork.

Can we do anything about this situation? No, not a thing. It would be like trying to wipe out lies--it can never be done. My recommendation is don't get caught up in it. Use your best arguments against an opponent, not the trashiest ones.

Image: ign.com

Fun quotes:

"Their function in the media ecosystem is to launder dirt fed to them by Republican operatives..." -- the former scum sucker mentioned above

"Sure, HuffPo plays them [stupid Republican reps] up, for the same reason they have a whole staff devoted to finding and posting sideboobs. It's clickbait for the online hordes." -- Kevin Drum

"He was fired ... for being behind a website spreading rumors that then-Baltimore Mayor Martin O’Malley ... was having an extramarital affair." -- Bethesda Magazine about a campaign sociopath who recently "resurfaced" 

Extras. Read about 'rising star' campaign sociopaths. 

Death to the most hated fool in America

We needn't cry over the demise of Fred Phelps, the inventor of picketing the funerals of those who have died most tragically. His Westboro Baptist Church has been running out of steam, and now rarely even threatens to disrupt public events.*

What can I say about Rev. Phelps, who used his cult zombies to haunt families that lost sons in roadside bombings in Iraq and Afghanistan? I worry that those obnoxious multi-color signs added extra pain to the nightmares of those fathers and mothers. His punishment on Earth wasn't enough for the pain he caused, but that's true for most tyrants, even tinpot ones like Phelps.

Phelps' church was never large, with under 100 families as members, and dwindling was people wised up. Supposedly the church accepted no outside money, but I doubt that. Someone had to pay for the buses and the gas and food and those ghastly signs, even if the faithful slept on the buses and the few workers among them turned over their paychecks. Too many in the US, and possibly internationally, supported his message, and might have given money too:

"... he was one of the very few men in our day and age with the decency to confront and condemn the indecent–that is to say, vile homosexual perverts." -- conservative commenter

The church spawned hate and lawsuits, and even laws. A 2006 law prohibited protests within 300 feet of the entrances to veteran's cemeteries.  That wasn't enough, so there was a second law. Unfortunately, the church frequently sued for their rights and won judgments that helped fund them. Phelps himself was a disbarred lawyer and his daughter argued some of their cases. We may have to suffer through another generation of their form of hate, as ineffective as it was.

Image: nydailynews.com

* Oops, they still protest, but now mostly around Kansas. That's a blessing for us in other parts of the country.

Extras. This obituary has Phelps reflecting after his death. (I won't give away the punchline.) Another victim was Mr. Rogers, whose sin was wanting neighborhoods that were way too friendly for a hater like Phelps. A previous most hated here.

Short: What's this 'Aqua Buddha' thing?

There are some snickers about Rand Paul and 'Aqua Buddha.' Am I supposed to know what this is? Is it more or less important than Clinton and a blue dress?

I don't want to look like an out-of-the-loop fool, so I fired up Google and found the answer to this mystery ...

It's definitely worth a few snickers. Rand Paul pulled a college prank 30 years ago, someone dug it up, wrote an article about it, and then his senatorial opponent stupidly cast doubts about Rand Paul based on this ancient inconsequential incident. Rand Paul correctly rained scorn on the opponent when he brought it up during a debate.

Be sure to check out the links because everyone should have a good laugh. But I have a follow-up question: what is the future for 'Aqua Buddha?' I think this is just the beginning. We may have decades of Aqua Buddha fun in store for us.

Image: downwithtyranny.blogspot.com

Short: What I missed in the Camp tax proposition

I missed a huge story concerning Dave Camp's tax reform proposal. What I saw was that Camp couldn't make the math work for a 25% highest tax bracket. I also thought at the time (though I didn't write it), that Camp's tax reform was doomed because other Republicans won't accept the reality of the numbers.

Here's what I missed:

• Wall Street took exception to taxes on too-big-to-fail banks. Their lobbyists brought out the big guns (albeit behind the scenes) and made lots of GOP reps denounce or disavow Camp's tax proposal. 
• The anti-Wall Street populists in the GOP (Tea Partyers) are true to form. They don't understand and don't care about policy, so they aren't supporting these provisions on banks ... because all Tea Partyers know how to do is scream or bluster. (Confirmed again by the only article in HotAir on the issue, and its cra-aa-azy comments.)
• Tax reform was always a long shot, but we can kiss it good-bye. The chairmen of the applicable committees are changing, and the incoming ones aren't likely to pursue tax reform. 

Did we gain anything? Did we learn anything? TBD but not likely.

Image: cpn-news.com

Hat tip: Jonathan Chait again.