Democratic Senate: Progressives, Populists Win

It’s worth taking a moment to make sure Tuesday night’s Senate victories sink in. First, the big three.


Sherrod Brown (D) – 50%
Josh Mandel (R) – 45%

Sherrod Brown is a tenacious, strongly pro-labor, staunch defender of Social Security and Medicare who introduced and pushed legislation to break up the “Too Big To Fail” megabanks (twice!). He’s pro-choice, pro-marriage equality and a key progressive force in the Senate. He also represents the most fiercely contested swing state in the nation. From the get-go, Brown’s re-election campaign was the top target of Karl Rove and corporate interests. They threw everything at him: $40 million worth of gold-plated kitchen sinks. Sherrod Brown, as the saying goes, has all of the right enemies. He also has all of the right friends and a willingness to fight for his core values and the interests of regular working people in Ohio. That combination helped him carry the day.


Elizabeth Warren (D) 54%
Sen. Scott Brown (R) – 46%

Be afraid Wall Street, be very afraid. Elizabeth Warren just defeated your favorite Senator in her very first campaign.


Tammy Baldwin (D) – 51%
Tommy Thompson (R) – 46%

Tammy Baldwin proudly self-identifies as a Wisconsin progressives and she happens to be openly gay. Tommy Thompson is a former four-term Governor who the Republican establishment was thrilled to get as their party’s nominee. Tammy beat Tommy by 6 points.

A similar story played out across the country. New Mexico, which up until recently was considered a swing state, is now represented by two progressive populist Democrats as Martin Heinrich joins Tom Udall in the Senate. Progressive Democrats Chris Murphy (Connecticut), Mazie Hirono (Hawaii), Sheldon Whitehouse (Rhode Island), Bernie Sanders (Vermont) and Ben Cardin (Maryland), among others, all won big.

This brings me to the widely and deservedly mocked pre-election piece by Politico’s Jim VandeHei and Mike Allen, which claimed that the make-up of the Democratic coalition means that Democrats have a progressive problem.

The pressure on Obama to deliver for this liberal base will be powerful. Already, top left-wing groups are pressuring him not to buckle on a grand bargain that includes any entitlement cuts.

The Senate races offer the perfect cautionary tale to this impulse. Democrats have a good shot in Nebraska, Missouri, North Dakota, Virginia and Indiana because they have moderate Democratic candidates and incumbents who often see the president — and the party back in Washington — as out of tune with a center-right country.

Set aside for the moment that this isn’t a “center-right country” (the Democratic presidential candidate has won the popular vote in 5 out of the last 6 elections). Bob Kerrey, who embraced everything Beltway “centrists” have ever called for and then some, still lost in Nebraska by 16 points. Tim Kaine won in Virginia and Heidi Heitkamp won in North Dakota after running as mainstream Democrats on a lot of things, including the very popular earned benefit programs out of touch inhabitants of the Beltway bubble would just love to hack away at. Kaine did an event with Social Security Works. When asked at a debate whether he would vote for the Bowles-Simpson co-chairmen proposal as it is, he said that he wouldn’t while rightly pointing out that Social Security does not contribute to the deficit. Heitkamp talked about the budget deficit a lot but explicitly opposed “putting Medicare and Social Security on the chopping block.” She also ran on the Buffett Rule and the ACA. “Be a ‘moderate’ and cut Social Security and Medicare!” is a nonsensical statement. It’s not just progressives and virtually the entire Democratic voting coalition that oppose cuts to Social Security, Medicare and Medicaid. It’s a clear majority of the country as a whole.

Democrats don’t have a progressive problem. Progressive Democrats win on the West coast and East coast. Progressive/populist Democrats win in the Midwest, specifically “blue collar blue” states Minnesota, Iowa, Wisconsin, Illinois, Michigan, Ohio and Pennsylvania. Mainstream Democrats can win in the Southwest and New South. Going forward, Democrats won’t need conservaDems to build a durable Senate majority like we used to. They weigh us down (see: recovery efforts in 2009) and increase the chances that all kinds of Democrats will lose their seats, they drain resources that could go to other races and they still lose despite all of their playing to DC’s warped idea of what constitutes the “center.” Getting policy results matters. Turning out your coalition matters. Beltway positioning games? Not so much.

Of course, running progressive/populist Dems doesn’t mean we can always overcome bad fundamentals, like the awful economy and vastly different midterm electorate that defeated Democrats in 2010. Joe Sestak, for example, lost in Pennsylvania — but just barely. And he was just one of many cases of progressive/populist/mainstream Democrats outperforming conservaDems in similar races.

Every cycle I choose four of five Senate campaigns early on that I see as especially important to focus on. I’ve focused on winners before: Sherrod Brown (Ohio), Amy Klobuchar (Minnesota) and Sheldon Whitehouse (Rhode Island) in 2006; Jeff Merkley (Oregon), Tom Udall (New Mexico) and Al Franken (Minnesota) in 2008. Tuesday night was the first time all of my picks — Elizabeth Warren, Sherrod Brown, Tammy Baldwin, Martin Heinrich and Mazie Hirono — were victorious. This does not make me, or any of the many others who advocated for these candidates geniuses. But it does help show why the timidity lobby should be largely ignored. Their model is fatally flawed.

How can Democrats keep the momentum going?

John Kerry and Dick Durbin may be headed for cabinet positions in President Obama’s second term, which would mean opportunities to elect new Senators in Massachusetts and Illinois.

2014 priorities include re-electing Jeff Merkley in Oregon, Tom Udall in New Mexico, Al Franken in Minnesota and Tom Harkin in Iowa. In 2016, a presidential year, Republicans will be defending freshmen Senators in Wisconsin, Illinois, Pennsylvania and Ohio.


Roundup: The Foreclosure Fraud Settlement

Thursday morning news broke that the foreclosure fraud settlement that had been reportedly “imminent” countless times in recent months was finally a done deal. The federal government and every state but Oklahoma (whose Republican Attorney General Scott Pruitt is philosophically opposed to even a shred of accountability for banks or help for affected homeowners) are settling with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

It was good to hear President Obama described the settlement in terms of “some help” and “some measure” of accountability, because as of now, that is the most that can be said in its favor. I don’t think it’s in anyone’s interest to overstate the national impact this will have. We’re not talking about a big win here. The deal doesn’t come close to matching the scale of the problem and it falls short on the accountability front. The case for this deal is that it’s a beginning not an end.

While the settlement is far from great, it’s much better than it would have been thanks to the “Justice Democrats” and those who organized around their efforts. This group of Democratic Attorneys General including Eric Schneiderman (New York), Beau Biden (Delaware), Catherine Cortez Masto (Nevada), and Kamala Harris (California), as well as Lori Swanson (Minnesota) and Martha Coakley (Massachusetts), deserve credit for preventing a wider release of the megabanks’ wrongdoing.

Two glaring problems have been the subject of discussion since the settlement was announced. First off, and this one is basic, the term sheet hasn’t been made public. This is bound to cause people to expect the worst, as they’re understandably distrustful of anything that involves elected officials and the megabanks. Second, as feared, Scott Walker is using the funds meant for homeowners to plug his state’s budget deficit. At least two other Governors are following his lead.

Schneiderman, one of the lead Justice Dems, is adamant that the deal preserves his ability to pursue real accountability. As one of the co-chairs of the mortgage fraud task force the president announced in his State of the Union address, Schneiderman is one to watch in the coming weeks and months. Will Schneiderman be given the resources he needs to do this job right?

Schneiderman spoke to a number of media outlets about the fraud settlement and what comes next.

Greg Sargent:

Schneiderman — who has gained a national liberal profile for his insistence on true accountability for financial institutions — conceded the settlement announced today was “small” in financial terms, given the struggles of underwater homeowners and people who lost their homes.

But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.

“This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.

Interestingly, Schneiderman vowed that if the task force to probe mortgage practices set up by the president — which he co-chairs — stalls or drags its feet, he would speak out publicly against it. Some critics, such as David Dayen, have expressed skepticism that it would have the resources and leeway it needs to secure real accountability.

“I will speak up if I don’t feel that the rights of American homeowners are being protected and we’re not pursuing the investigation as aggressively as we should,” he said. “If things break down and things don’t work I’m prepared to speak up and take action. But the initial signs are really positive.”

“This will ultimately depend on the coalition that’s assembled around these principles,” Schneiderman said. “We’ve now got a progressive coalition that … can move public officials to take a more aggressive approach.”

Schneiderman outlines a credible, historically supported theory of progressive change: the right people in the right place combined with a strong movement capable of support and pressure. Schneiderman is urging progressive groups, labor unions, and civil rights groups to stay engaged on this. While some commentators have suggested that Schneiderman may have “sold out” the message he is sending about the task force and the role of grassroots pressure is entirely inconsistent with the sellout theory.

From Rachel Maddow‘s interview with Schneiderman.

Maddow: What you’re describing is at least a 90 degree turn in Washington… in terms of the aggressiveness with which people will be held accountable for what happened in the crash. Why didn’t this happen before?

Schneiderman: I took office about a year ago and the atmosphere in the country was very different. What we’ve seen is a swing toward progressive populism in this country and I’m glad to be a part of it, but I’m just a part of it.

Schneiderman again urges those who organized around this to keep at it and not disengage. Though the deal is unquestionably flawed in many respects, that’s not the fault of Schneiderman, Biden, Harris, and Masto. There’s certainly a lot in the settlement to criticize or decry; but that can be done without discarding the allies who pushed the outcome in a positive direction.

David Atkins:

Harris and Schneiderman fought as long and as hard as they could against this tide, and their efforts without question led to a better settlement than would have been achieved without them.

I would advise that progressive wrath be focused where it belongs: on Holder, on the President, on the financial institutions and their executives (of course), and on the entire neoliberal ideology that enabled this situation to occur in the first place.

Not, however, on Schneiderman and Harris, without whom this settlement would have been worse, and without whom this issue would have been quickly and quietly swept under the rug without significant national attention. If we, hating the end result, are quick to turn on our best friends and strongest champions no matter whether they fight for us or not, no one will stand up for us in the future.

I’m all for EPI/Roosevelt Institute/Paul Krugman-type Democrats fighting the outsized influence of the consistently wrong Third Way/Hamilton Project/Tim Geithner… uh… Democrats?… or whatever Tim Geithner is. The outlook of the latter group is largely confined to D.C. — they’re out of step with the mainstream of the country (let alone the mainstream of the Democratic Party) on defining issues. The long-simmering discontent with the influence of Wall Street Dems should fuel a confrontation with those who are part of the problem. But that’s not Schneiderman and company.

Elsewhere, Beau Biden spoke with Chris Hayes’ Sunday panel. Former Rep. Patrick Murphy (D-PA), who is running to be Pennsylvania’s next Attorney General, released a statement opposing the settlement.


Via Ezra Klein’s Wonkblog

Elizabeth Warren:

Today’s settlement shows a significant commitment to helping struggling homeowners stay in their homes. But it needs to be the beginning, not the end, of efforts to hold the big banks accountable with meaningful penalties that demonstrate the rules and the law apply to everyone, no matter who your friends are or how many lobbyists and lawyers you can hire. Moving forward, further investigation and prosecution are needed to bring our long national mortgage nightmare to an end.

Dean Baker:

I’m not thrilled with the settlement, since it doesn’t accomplish much, but at least it doesn’t preclude further civil or criminal suits. In terms of the commitment of payments in the form of write-downs, we don’t have a clear counterfactual that allows us to gage how much would have been written down anyhow. We also have the peculiar situation where the banks get to pay the penalty with write-downs of debts to MBS investors.

The big plus is that the settlement does not preclude further legal action on securities fraud and other issues. [New York Attorney General Eric] Schneiderman and the other holdouts deserve credit for this.

Jared Bernstein:

Here are two reasons why I like the mortgage settlement agreement just announced: It’s not voluntary and it doesn’t require Congressional approval.

I’ll elaborate in a moment, but first, the caveats: It’s a drop in the bucket. There’s something like $700 billion out there in negative equity, and even with the leveraging — another attractive attribute of the way this should work — the $17 billion for preventing foreclosures ain’t gonna solve this.

But neither is any other single idea. Along with the other interventions policy makers are working on — ones I also hold some hope for — there’s clear potential to help distressed home owners and the macroeconomy.

Here’s what’s unique, useful and potentially important about the settlement: One of the main reasons the measures we’ve tried so far have underwhelmed is because they’ve all been voluntary from the perspective of lenders and servicers. No bank had to play along with HAMP or HARP. They had a choice of whether to respond to the incentives in the programs or not, and often it was “no thanks.” (By the way, that’s why I always liked the cramdown option — moves locus of action from solely being in the lenders’ hands.)

But the five banks named in the settlement must now set up processes to do refis and principal reductions. They don’t have a choice. And that’s a real advance.Who knows, with these processes in place, we can even dare to hope that the $17 billion, which is expected to be leveraged up to about twice that amount (i.e., banks are expected to provide a dollar of foreclosure prevention for $0.50 from the settlement fund) will be testing the waters for a deeper dive into mortgage modifications.

Karen Nussbaum, Working America:

The $26 billion is not what we wanted. We were hoping for much more. This is like pocket change. So we hope this is a down payment, and we’re hoping to see more positive action coming out of this federal investigations unit. But only a handful of people are actually going to have their payments reduced, and the people who have already lost their homes will get $2,000. That doesn’t come close to fixing the problem…this just doesn’t add up to the kind of relief that people actually need to stay in their homes.

Mike Konczal, Roosevelt Institute:

Follow the money in this deal, but also follow the process. There’s good reasons, both in theory* and empirically, to believe the “servicing” model the banks use to manage mortgage debt and foreclosures (created recently alongside the mortgage-backed security model), is destroying value for investors and homeowners through large numbers of unnecessary foreclosures. Why? Because of serious conflicts-of-interest and misaligned incentives between the banks managing the debts and investors and homeowners.

The robosigning and related scandals are a symptom of this broken process, and they should have lead the way to serious reform. Unless this model is changed in some fundamental ways, we’ll continue to have problems, including ones that make a mockery of court documents, property records, and our legal system. The settlement appears to allow the banks to hire their own monitors and is so similar to settlements at the state level that were broken by the banks in the past we have to ask: how can we expect anything to be different?

AFL-CIO president Richard Trumka:

The banks broke the law by railroading homeowners through the foreclosure process. Today’s settlement provides compensation for foreclosure victims without requiring individuals to waive their legal claims. While banks must be made to pay more to help homeowners, the settlement includes needed principal write-downs so homeowners can stay in their homes.

We urge President Obama to provide the federal investigative task force with the resources necessary to address the $750 billion in negative home equity that is the result of illegal conduct by banks. The 99 percent demand a fair economy and a judicial system that holds the rich and powerful accountable for their illegal behavior.

Robert Kuttner:

The banks bargained hard for broader protection against future liability. They didn’t get it mainly because progressive state attorneys general held out for the right to continue investigating, filing civil suits, and criminal prosecutions.

Obama wanted to announce this deal in his State of the Union address, but for the past couple of weeks, there has been a standoff, with the banks pressing for more immunity and Schneiderman reserving the right to prosecute and litigate.

In the final deal, whose actual text has not been made public, Schneiderman appears to have won big.

The question now is whether federal and state law-enforcement agencies will use the authority they have. For the first three years of the Obama administration, the feds have gone far too easy on the banks. Though Schneiderman has been added to a newly activated federal task force, it remains to be seen whether the same Justice Department and Securities and Exchange Commission (SEC) that declined to take vigorous action have truly reversed course.

Ideally, we didn’t need this settlement now. It would have been better for prosecutors to mount more cases, not just related to robo-signing and MERS but aimed at the fraud at the heart of mortgage securitization. Then, prosecutors could extract penalties that more accurately fit the crime—specifically fines and mortgage relief as restitution, well into the hundreds of billions of dollars.

This is said to be Schneiderman’s goal, both in agreeing to join the settlement once it was revised so as not to tie his hands and taking part in the Justice Department task force.

The settlement is (barely) better than nothing only if pressure is kept on the Obama administration to view it not as an end but as a beginning. The signs are good that Schneiderman and the other progressive attorneys general see it that way. But it will take quite a deathbed conversion for the Justice Department and SEC to reverse their record of the past three years.

Campaign for America’s Future – Robert Borosage:

The deal has been cut before the investigation so it is suspect on its face, but limited in its scope. Whether it will be enforced adequately remains to be seen. How homeowners benefit will differ from state to state.

But the real question remains whether the federal investigation will finally turn over all the cards so we know just how bad a hand the banks are holding. Only then is there a possibility for real accountability – and real relief for homeowners.

So this settlement must be the beginning, not the end. We have to sustain pressure on the administration for an aggressive investigation. State criminal and civil suits, individual and investor relief have to continue. We are a far remove from achieving the justice and accountability that is due.

Campaign for America’s Future – RJ Eskow:

Up to now, the fight has been to prevent the Administration from doing another cushy bank deal. Now that the door’s been left open to further action, there’s a new fight: to demand that they devote the Federal government’s resources to investigating Wall Street crime.

The agreement trades away the leverage that investigators gained by essentially catching bankers dead-to-rights as they broke laws on a mass scale through robo-signing. That means they can’t use that leverage to “sweat” more information out of the banks.

When it comes to their rampant lawbreaking around robo-signing, bank executives just dodged a bullet. But they’re still vulnerable on other forms of personal wrongdoing.

Once again, it’s all in the execution. The public has to keep the pressure on the White House to back Schneiderman and others in their investigations.

More Eskow:

Two thousand bucks for having your home illegally foreclosed on is an insult. But two billion dollars’ worth of lawyers suing bankers on behalf of wronged homeowners could change everything. And a real investigation into bank crime could make a real difference.

Will we get those things? Maybe – but only if we fight for them.

Do I think some groups inside and outside Washington oversold this deal? Yes. But do I think that Eric Schneiderman and his allies made it considerably better than it would have been? Yes.

[W]ithout public pressure – either because we’ve over-celebrated the deal or walked away from it – the scenario that’s worst for the public becomes the likeliest one.

The authorities had bankers dead-to-rights on forgery and perjury, which is what “robo-signing” really is, and they traded it away for a relative pittance. I wish they’d locked somebody up with this evidence – or, better yet, sweated the small fry until they got to the top guys behind the criminal behavior. They locked up Al Capone for tax evasion, after all, not bribery or theft or murder.

So can we stipulate the following? The money banks will have to pay is meaningless, if that’s all they ever pay. The dollar amounts homeowners will receive in compensation is an insult, and the principal relief it offers are a tiny fraction of the real problem.

Now what? We keep fighting. What else?

[W]e’re going to have to strike the right balance: Cheerleading for this deal creates a false sense that justice has been served and the battle’s over. But trashing it altogether discourages people and could prevent them pressuring the Administration and their state’s Attorney General to use the tools it does provide.

You can listen Eskow discuss the settlement with David Dayen here.

Dayen, whose comprehensive coverage of foreclosure fraud is second to none, is all over the settlement.


Housing and Urban Development Secretary Shaun Donovan believes that they will be able to get between $35-$40 billion in principal reduction in real dollars out of the settlement. Donovan became the point person on the federal level, along with DoJ, as the Administration pretty much took over the investigation and settlement process from the states, who were led by Iowa AG Tom Miller.

But even this $35-$40 billion number, which is at best a guess since the direction of the principal reduction is mostly at the discretion of the banks, pales in comparison to the negative equity in the country, which sits at $700 billion. And the banks have three years to implement the principal reductions, drawing out the loss on their books.

More Dayen:

Let me focus on what the people who settled this deal will probably tell you. They would say that the interlocking state and federal claims, and the relative intensity of the law enforcement officials in the various states, many of whom would decline to go after any claims, means that the maximum you could get out of all of these lawsuits on servicing and foreclosure issues would be commensurate with the $40 billion they believe will be the ultimate outcome of the settlement. I’ve had that told to me. You can look at the fact that Catherine Cortez Masto in Nevada secured around $57,000 per homeowner in a settlement with Morgan Stanley on these issues and dismiss that claim. But that’s the thinking, at least from some parts of this.

Dayen proposed nine ways to improve housing policy around the deal. He also asked how anyone could be sure what to think of the settlement when the term sheet has yet to be made public.

There’s a HUGE difference between an agreement in principle and the actual terms. I mean night and day. The Dodd-Frank bill was for all intents and purposes an agreement in principle. It left to the federal regulators to write hundreds of rules. And we have seen how that process of implementation has faltered on several key points. But the Administration wanted to announce a “big deal,” the details be damned. And they got buy-in from the AGs. Everyone else stayed silent.

Neil Barofsky, the Inspector General who oversaw TARP, commented on this development.

Econobloggers weigh-in: Felix Salmon called the settlement “a win for all sides.” Yves Smith wrote “The Top Twelve Reasons Why You Should Hate the Mortgage Settlement,” which includes this money quote, in more ways than one.

We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

Joan McCarter at Daily Kos:

The banks are getting off pretty damn easy on the financial side of this. What makes the settlement less of a disaster than what it looked like even a few months ago is that, thanks to the concerted efforts of a handful of attorneys general (Eric Schneiderman of New York, Kamala Harris of California, Catherine Cortez-Masto of Nevada, Beau Biden of Delaware, Martha Coakley of Massachusetts and Lori Swanson of Minnesota) who refused to sign on to an agreement that gave the banks blanket immunity, legal immunity has been limited to banks very narrowly to robo-signing issues, and investigation of the residential mortgage backed securities market can still procede.

The concessions that those hold-out attorneys general were able to wring out the banks were critical for investigations and potential prosecutions in the massive fraud these banks committed. Those investigations, at the state and federal level, if pursued with vigor and a real intention to hold the banks accountable could potentially do what this settlement absolutely won’t: Force the banks to reform.

Seth D. Michaels at Main Street:

[T]he first part of this fight has come to a close—and, despite the flaws in this settlement, working people have won some victories over the banks along the way. But here are the questions we’ll be asking as we move forward. Will homeowners who need it actually get the help this settlement provides in a timely manner? Will the investigation task force be able to uncover and actually penalize misconduct on the part of the banks? And, most importantly, will the settlement and the next steps have enough force to prevent large-scale abuses like this from happening again?

Harold Meyerson at The American Prospect:

Looked at in vacuo, it’s not much of a deal… [b]ut the deal should be looked at as much for what it doesn’t do—for if it doesn’t even begin to provide adequate compensation for America’s beleaguered homeowners or former homeowners, neither does it preclude those homeowners from lawsuits of their own, or, more important, does it put an end to the civil and criminal liability of the banks for all they did to misrepresent mortgages both to homebuyers and investors in mortgage-backed securities.

In the division of labor on the coming investigation of bank abuses, Harris and Masto will likely take the lead on fraudulent and lax origination—more of which took place in their states than anywhere else—while Schneiderman, Biden, and the Feds focus more on the misrepresentation and fraudulent marketing of mortgage-backed securities and derivatives. The mansion of financial fraud has many rooms, and since Thursday’s deal did not seal them off, Harris, Schneiderman, U.S. Attorney General Eric Holder, and Company will be looking into them in the months to come.

The New Bottom Line calls the deal a “tiny drop in a big bucket… a paltry down payment toward full relief for homeowners” that doesn’t achieve justice for those who have lost their homes or full accountability for the banks’ wrongdoing. The NBL says the settlement is stronger than it would have been thanks to “grassroots groups and the courageous stance” of the Justice Democrats, whose work is building momentum “toward broad-scale relief for homeowners.” The NBL makes it clear that they will be watching the Obama Administration and the Mortgage Fraud Task Force closely.

Mike Lux:

[P]rogressives won something that was never even on the table when these settlement talks started: we got a bigger, broader investigation into financial fraud through the new task force, co-chaired by Schneiderman, appointed by President Obama.

So in this stage of the struggle, we definitely lost some things, especially the chance for dedicated prosecutors to keep investigating and prosecuting all those robo-signing perjuries, but we also won some important things that open the door for more investigation, prosecution, and forced mortgage write downs by the big banks. We have won our chance to keep the prospect of pressuring the banks alive. Now we have to take advantage of it. We have to keep the heat on high intensity to make sure this task force isn’t for show, that roadblocks aren’t thrown in the way of the prosecutors like Schneiderman who really want to prosecute, and that enough staff resources are allocated to take these investigations deep into the heart of what these bankers did to our economy.


Clearly this deal, and the discussion about how to respond to it in Democratic and progressive circles, requires a running debate. It would be a massive understatement to say there are a lot of moving parts to this. Deferring on the finer points to those with relevant expertise who you know share your values and goals isn’t a bad thing. The inherent complexity isn’t cause to dodge the difficult questions; it’s a reason to keep a close eye on new developments. Remember that even those who believe that on balance this deal is a victory stipulate that the victory requires follow-through.

If the Obama Administration doesn’t follow through, there will be a real backlash. They already have a credibility problem when it comes to taking on Wall Street to the degree necessary. Housing is an especially sore spot (see: the endlessly frustrating HAMP, Administration officials assuring Congressional Democrats that cramdowns would be pursued and then failing to pursue them). No small number of people within the Obama Administration are too deferential to Wall Street. While this dynamic predates the Obama White House, voters are beyond tired of it. This is one of the many subjects on which prominent progressive voices and swing voters align. If Eric Schneiderman is forced to walk away from the mortgage fraud task force, it will dramatically undercut President Obama’s populist re-election appeal. That’s not something the White House can afford to risk if they know that a vocal 99% movement is watching.