Includes the song, “They Are Both Clowns,” sung to the tune of, “Send in the Clowns.”

Well, golly gee… will you look at what’s going on in the media these last few days.  Apparently the foreclosures, free fall in housing prices and growing number of underwater mortgages, combined with an unemployment problem that’s even scaring the wealthy at Goldman Sachs, is apparently… possibly… maybe… they’re not quite sure, but it could be a problem.

This past weekend, Zachary A. Goldfarb, writing on hos Washington Post/Bloomberg blog wrote that Obama’s efforts to aid homeowners and boost the housing market have fallen short of their goals.  Really, Zach?  Pray do tell.

Zach points out that Obama promised to help save 9 million homeowners from foreclosure, but guess what?  He didn’t.

Zach says that, “nearly three years later, it hasn’t worked out.”  Ooopsie.  Sorry about that.  Not only that, but Zach has apparently learned that Obama has spent just $2.4 billion of the $50 billion he promised to devote to fixing things in the housing market.

Let’s see… if I’ve got my numbers right, that would be less than 5 percent… Obama spent less than 5 percent of what he said he’d spend on the foreclosure crisis.  And this from a president under whose watch the national debt increased by $4 trillion… the most rapid increase in our national debt of any president in U.S. history.

Of course, Obama blames policies he inherited, and there’s certainly some truth to that.  Two wars, a prescription drug program for seniors, tax cuts, the Great Recession, unemployment insurance payments, subsidies to farms and funding of infrastructure programs that were part of his stimulus programs, and a decrease in tax revenues resulting from… well, the recession again.

So, Zach goes on to say that Obama’s programs have helped on 1.7 million people, so that would mean that he only missed his goal by a little over 80%.  And with that, Zach points out:

“Housing prices remain near a crisis low. Millions of people are deeply indebted, owing more than their properties are worth, and many have lost their homes to foreclosure or are likely to do so. Economists increasingly say that, as a result, Americans are too scared to spend money, depriving the economy of its traditional engine of growth.”

Well, Holy Mackerel Zacheral, what’s a girl to do?

About the administration, he explains that:

“They consistently unveiled programs that underperformed, did little to reduce mortgage debts owed by ordinary Americans and rejected a get-tough approach with banks.”

Ooooh, that sounds pretty bad, Zach.  I sure hope the 7.3 million people that Obama didn’t help after promising that he would don’t find out about all this.  ‘Cause they sure could be miffed, I’d say.  And not only that, but since the nine million promise was made three years ago, and since nothing has worked or gotten better since then, why there might be even more than that in need by now.  Ya’ think, Zach?

And, guess what else Zach has figured out…

“Doing more to address the housing crisis may be crucial not only for an economy flirting with another recession but also for a president running for reelection.”

Whoa, there Zach… let’s not get carried away here.  You don’t mean to say that you’re thinking that some of those 7.3 million plus people might be voters, do you?  Good God, man… do you realize what you’re saying?  Why didn’t Obama win the presidential election 2008 by 9,522,083?  Why there could be that many who are kind of… just maybe… a tad upset with Mr. President.  Oh, this is not good news, is it Mr. Zachary Goldfarb?

Zach even takes notice that the president’s absolute failure to do anything right, as far as foreclosures are concerned, “has caused a rift” with the president’s “political allies,” including “black and Hispanic groups” whose members, Zach explains, “have been disproportionately hurt by the (foreclosure) crisis.”

See, I’ve gotta’ say something here.  I think Zach just pointed out something very uncomfortable here.

Since the people we don’t want to “bail out” are considered irresponsible borrowers.  And since blacks and Hispanics have been disproportionately hurt by the foreclosure crisis, doesn’t that say that black and Latinos are more irresponsible than white homeowners.  Yes… I think it does.

Well, I’m glad we got that settled once and for all.  I guess banks should start charging them more just because of their skin color, right?  Wow… the bankers are going to love this.

Zach goes on to say that Peter Orszag, the former White House economic advisor, you know… the one who headed up the Congressional Budget Office before splitting for a gig at Citibank… well, Peter apparently says that the administration “underestimated how much the nation’s massive mortgage debts would weigh the economy down after the financial crisis.”

Here’s what Orszag apparently told Zach:

“A major policy error has been to put too little weight on the long, hard slog following a financial slump.  That leads you to being much less bold with housing.”

Now, I don’t have a doggone clue what Mr. Orszag means by that, and I read the damn sentence three times.  But, no matter… you know what that makes Mr. Orszag, in terms of an economic advisor?  Why that makes him a moron, Mr. Zachary Goldfarb.

Now, Zach also talked to Treasury Secretary Tim “Transparency” Geithner, and Tim says that the administration did all that it could… under the circumstances.  As Zach put it…

“Spending large amounts of taxpayer money to bail out some homeowners — but not necessarily their neighbors — carried huge political risks and faced opposition in Congress.”

Well, sure it did… after all, how can you help the irresponsible ones without pissing off the responsible ones, right?  Everyone understands that.  The only fair thing to do is to let them all go straight down the drain together.

According to Treasury Secretary Geithner…

“We tried to operate at the frontier of what was possible and have continuously expanded and refined our programs in an attempt to reach as many homeowners as possible.  We do not believe that there were feasible alternatives available to us within our authority that were better.”

Well, okay then.  They did the best they could, so everybody stop your whining.  Heck, they could of not even spent the $2.4 billion, and then look where everyone would be.  Be grateful they spent less than 5 percent of what they promised, you’re lucky you got that much.  They did all they could.

You can’t expect Obama to risk his popularity with all those responsible borrowers who lived next door to the irresponsible ones.  I mean, look how popular his is with homeowners now?  You wouldn’t have wanted him to screw that up now would you?  Of course you wouldn’t.

Lucy, you got some ‘splainin’ to do…

Zach provides us with a glimpse inside the inner workings of the Obama Administration, and this is exactly the kind of stuff I love these Washington Post guys for… get this… according to Zach, and for this he deserves to be called Mr. Goldfarb…

“Obama has rarely spoken publicly about his frustrations with the housing crisis, but in a private meeting with his advisers at the White House in December, his concerns boiled over. The president opened the meeting by saying how he had received letters from homeowners warning about problems with his housing programs. He pointed out that he had been assured by his advisers that banks would be able to step up, according to two people who attended.”

Ooooo… someone’s in trouble.  Can’t you just see Geithner sitting there, turning red, and thinking: “How the f#@k did those f#@king letters get to the president.  I expressly said no f#@king letters from the outside were to get through to the f#@king president.”

“But at the meeting, he said he was now frustrated to learn, by way of a conclusive new federal review, that banks were not providing required relief to many borrowers.”

“He was clearly disappointed,” said one participant in the meeting, “to realize the problem was worse than he thought.”

Well, I for one am happy to know that President Obama was frustrated and disappointed to learn that the bankers and those in his cabinet had made him a liar to twenty or thirty million of the American people.  You know, that a whole bunch of people had taken their own lives, had been unable to sleep for months at a time, that his inept staff had scarred untold numbers of children unnecessarily…. you know, that must be both frustrating and disappointing.

I know that I personally would be both frustrated and disappointed over stuff like that happening during the first term of my presidency.  Why I might even have been extremely frustrated and very disappointed to learn about something like that after it had been going on for more than two full years without my knowledge.

So, here’s the story… Zach… take it away…

“This story of the administration’s response to the housing crisis is based on interviews with more than 40 former and current administration officials and others familiar with housing policy, some of whom spoke on the condition of anonymity to discuss confidential conversations.”

Come on, are you loving this or what?

He starts out by reminding us that Obama had promised to spend $50 billion to help homeowners at risk of foreclosures.  Okay, Zach we’ve got that part, go on…

“Obama’s top advisers faced difficult questions about how to spend the money. None favored using taxpayer money simply to wipe out all the bad debt. That would have required one of two things: handing out up to $700 billion to more than 10 million Americans so they could pay off part of their loans, or asking Congress to force banks, which had just narrowly escaped collapse, to tell borrowers they did not have to pay back their whole debt, which would lead to more financial losses for the firms.”

Okay, so the simple answer was ruled out right from the get-go… got it.

Zach says that Shaun Donavan, secretary of Housing and Urban Development wanted debt reduction.  He argued that, “it would play an important role in healing the economy given the depth of the crisis.”  Apparently, Donavan wanted a program offering large payments to banks that would cover part of the cost of reducing the debts of underwater borrowers.

Zach says that Donovan “pressed for large payments to banks to cover part of the cost of reducing the debts of underwater borrowers.”  He figured that if homeowners owed less, they “would be able to afford their mortgages,” which would be “the best outcome for borrowers and banks alike.”

Well, that plan obviously got nixed in a hurry… so, what happened Zach, I’m on pins and needles over here.

Zach explains…

“But the president’s inner circle of economic counselors — Geithner and White House economic advisers Lawrence H. Summers and Austan Goolsbee — did not favor a big program of debt reduction.”

“We made that choice because we thought [reducing debt] would be dramatically more expensive for the American taxpayer, harder to justify, create much greater risk of unfairness,” Geithner said later before a congressional panel.”

I see… so it was Geithner and Summers that f#@ked this up.  It was Geithner and Summers that caused me to write 500+ articles pointing out the administration’s insanity and apparent corruption, spending my retirement account to try to influence people to fight back against what was and is tearing the country apart.  Unbelievable.  Well, off with their heads, I say.

Zach goes on to explain…

“The advisers also worried about the problem of “moral hazard,” when forgiving debts could encourage borrowers not to pay back loans.”

Oh, they did, did they?  Did anyone there bother to apply that sort of reasoning to the trillions of dollars they were shoveling into the insolvent banking system?  You know… I’m really starting to hate these guys.

Zach says…

“Rather than targeting debt, the administration focused its efforts on making monthly mortgage payments more affordable — for example, paying banks to lower the interest rates on loans. At the end of the day, homeowners would still have as much debt.”

Yeah, good plan guys.  Brilliant work.  And you didn’t even make that stupid plan work, you realize that now, right?  But, wait… it gets worse…

“Even with this less-dramatic approach, Obama’s economic advisers worried about spending too much taxpayer money to help borrowers who still might not pay back their loans. So they excluded large categories of borrowers, including those who could not provide extensive documentation of a steady income.”

That’s funny… they worried about spending too much taxpayer money… these guys who pumped $13.3 trillion into the banks were worried about spending too much taxpayer money on something?  That’s rich… really… that’s hysterical.  And so what… they ended up spending $2.4 billion of the $50 billion they promised to spend?  Oh, come on… f#@K these guys.

Now get this… according to Zach…

“Donovan argued it was crucial to require banks that had received bailouts to take part in HAMP, to ensure aid was offered to eligible homeowners. Others argued they could get banks to participate only if it were a voluntary program — and that view prevailed.”

And now for a brief music interlude… “They are both clowns…”

Isn’t it rich?

Aren’t they a pair?

Geithner and Summers they both…

Love laissez faire

They are both clowns.

~~~

Isn’t it wrong?

That they should approve.

Causing house prices to fall

Till no one can move

They are both clowns.

Send in the clowns.

~~~

Just when I’d bought, my own front door…

They turned our economy into one that no one could restore.

Their friends made fortunes again with unlimited bail.

There was no choice…

They were too big to fail.

~~~

HAMP is a crime,

A program that’s feared.

When millions applied for relief,

Their homes disappeared.

So, where are the clowns?

Send in the clowns…

Don’t bother they’re here.

~~~

Ain’t it a bitch?

That a financier.

Robing America blind is his career.

But they are both clowns.

Not funny clowns,

Let’s fire them this year.

~~~

Okay, so the decision was made to make HAMP a voluntary program.  And, why not?  Banks love to reduce a borrower’s interest rate or otherwise lower a monthly payment, right?  Of course they do.  There’s nothing a bank likes more than to accommodate a delinquent borrower, everybody knows that.  So, go on…

“Days before the program’s unveiling, David Moffett, the chief executive of housing finance giant Freddie Mac, arrived at the White House with a last-minute warning: Freddie’s analysts had concluded that the proposals were unlikely to help the millions Obama hoped. But, he recalled, the White House didn’t want to hear it.”

A few days later, Obama would fly to Arizona to promise the nation that his program would, “give millions of families resigned to financial ruin a chance to rebuild.” Or, maybe not so much.

Zach says that the administration recognized that the housing crisis was so intertwined with the financial crisis and recession that Geithner should play the most prominent role in overseeing and formulating its housing policies. But, Zach says, “the secretary did not seem to embrace all aspects of this role.”

According to Zach…

“Generally, the Treasury secretary did not regard direct homeowner aid as the best use of taxpayer dollars. He favored expanding the economy by spending money on construction projects or programs to keep teachers and other workers employed, which would help the housing market. In meetings, Geithner would tell the president that if he suddenly had $100 billion more to spend, he would never advise spending it on housing.”

Ladies and gentlemen, I give you… Treasury Secretary Timothy Geithner… the man charged with directing the world’s largest and most important economy during the worst financial crisis since The Great Depression.  Boo-yah.

Zach says that Geithner, “was worried that some steps to help homeowners could pose risks to the financial system, causing more harm than good.”

Okay, like what?  Give me an example.

“In 2009, for example, Obama officially supported a bill in Congress that would have made it easier for homeowners to obtain mortgage relief in court — a “stick” that would pressure banks to generously reduce homeowner payments.”

“Behind the scenes, Geithner had grave concerns that if courts could change the terms of mortgage loans after the fact, banks would be less likely to lend, reducing the availability of credit in the financial system.”

“Ultimately, political advisers decided the bill was unlikely to overcome the opposition of banks, Obama did not fight for it, and the bill died. There would be no stick.”

And there you have it… the death of bankruptcy reform.

Zach says that it was the summer of 2009 when the Obama White House started to hear from community groups that banks were foreclosing even when people were eligible for assistance under the program.

According to Zach…

“The president heard alarm bells in the often-emotional letters people wrote him.  His top economic advisers would remind him that even if the programs were working perfectly, some homeowners would not get relief.”

Oh, that’s just great… treat the President of the United States like a mushroom… keep him in the dark and feed him bullshit.

At this point, Zach explains that the data on HAMP’s performance in 2009 was not looking good.  Less than 70,000 people had been helped under HAMP, but 2.5 million had received foreclosure notices.  So, the administration started getting tougher on the banks and also started providing money to states to help homeowners through programs of their own design.

Zach says that according to former assistant Treasury Secretary Michael Barr, “A lot of his concerns and questions were about trying to figure out how we could do more on housing, while also being mindful of the costs and risks, and making sure our approach was fair to taxpayers and homeowners who were not going to directly be getting helped.”

But, the administration’s programs were off balance, Zach admits.  Although the administration’s advisors were saying that the debt problem should be addressed, “the administration’s programs have permanently reduced the debt on only one tenth of one percent of underwater borrowers.”

Wow, one tenth of one percent.  That’s more than I would have guessed.

Zach’s article goes on to talk about Fannie and Freddie and the new acting director, Edward DeMarco, who has been steadfast in his resolve not to allow Fannie or Freddie to participate in any debt reduction programs.  And he also discusses the more recent investigations that uncovered banks foreclosing when borrowers qualified for relief under various programs, and the administration’s efforts to negotiate a settlement that would ideally include some sort of debt reduction component.

Zach closes by recounting the admission made by the president this past summer, when he was asked what mistakes he felt his administration had made in handling the recession.  Obama said:

“We had to revamp housing several times to try and help people stay in their homes and try to start lifting home values up. Of all the things we’ve done, that’s probably been the area that’s been most stubborn in us trying to solve the problem.”

I’m not sure what to say to that, now that I’ve read Zach’s article and been shown more of what went on behind closed doors at the Obama White House.  That mistakes were made is abundantly clear, but even with such admissions, the depth and breadth of the crisis is just so staggering that it’s hard to feel anything but outright anger towards an administration that didn’t do more to stop what was happening to so many millions of American homeowners.

To win a second term, Obama must carry the states hardest hit by the foreclosure crisis.  To be sure, he’ll try to tell us that he’s still the right man for the job.  And even though the Republicans haven’t shown the slightest interest in addressing the foreclosure issue, it’s not going to be easy for the president to carry states where so much wrong was allowed to happen to so many families… people whose lives will never be the same.

So, even though Zach’s article did show me a side of the administration I hadn’t seen before, I’m still not sure that I see anything that resembles change I can believe in.

Mandelman out.