Like a gambler with nothing to lose, Andrew Romanoff, the Colorado Democrat running for US Senate, has gone all in.
A few weeks ago, the 43-year-old sold his Denver bungalow and loaned $320,000 of the proceeds to his campaign. Soon after, he unleashed a stinging attack ad, simply titled "Greed," on his primary opponent, Sen. Michael Bennet. The ad accuses Bennet, who previously worked for conservative billionaire Phil Anschutz, of pushing a movie-theater chain into bankruptcy and in the process looting it to the tune of $1 billion. And this past weekend, Romanoff latched onto the New York Times'probe into a controversial financial deal brokered in 2008 by Bennet, then the head of the Denver Public Schools. (Bennet denied many of the newspaper's claims; his response is here.)
So far, Romanoff's offensive has worked. After trailing Bennet by as many as 17 percentage points in mid-June, Romanoff staged a late-summer surge. By the end of July, he'd shrunk Bennet's lead to 4 points, according to a Zata3 poll, and even led by 3 points in a Denver Post-Survey USA poll. (The primary's latest poll, by Public Policy Polling, shows Bennet ahead by single digits.) Either way, Romanoff's push, boosted by an endorsement from Bill Clinton, has transformed a no-contest race into one of the most closely watched primaries of the month, pitting an liberal career politico against the Democratic Party's anointed candidate.
But will Romanoff's mettle, creativity, and willingness to attack be enough to topple the deep-pocketed, Obama-backed Bennet operation?
Down in Florida, not a day goes by without some good ol' mudslinging and accusations of corruption and graft by the Sunshine State's two Democratic nominees for US Senate, Rep. Kendrick Meek (D-Fla.) and billionaire Jeff Greene. In the race's latest twist, Greene, trailing in the polls, is linking Meek with Rep. Charlie Rangel (D-NY), the veteran congressman under investigation for multiple ethics violations. Greene recently called on Meek to return $5,500 in contributions he received from Rangel or donate the money to a charitable cause.
Greene is also bashing Meek for his ties to a real-estate developer named Dennis Stackhouse, who received a $72,000 earmark from Meek for a biopharmaceutical office park in Miami. But here's the rub: The facility never got built. Stackhouse has also been accused of ripping off a county agency to the tune of $1 million for the same office park, PolitiFact reports. Stackhouse also paid Meek's mother $90,000 for consulting and bought a Cadillac Escalade for her to drive. (Meek has said he didn't know about his mother's ties to Stackhouse.) Not surprisingly, Greene has repeatedly criticized Meek for the connection, saying he "is protecting the culture of corruption and bribery."
Greene's criticism comes after weeks of fending off accusations of flip-flopping about a visit to Cuba he made in his yacht, according to PolitiFact. First, Greene said he obtained a visa to go to Cuba and "visit the Jewish community." Soon after, the candidate tweaked his story, claiming he'd gotten the visa as part of a humanitarian trip to Cuba through the Jewish Federation. Then, a Greene spokesman changed the story altogether, saying Greene hadn't gone to Cuba for humanitarian works, PolitiFact finds, but because his yacht had suffered some hydraulic problems.
Deckhands on Greene's yacht, meanwhile, said none of the above are true. Instead, they claim Greene's trip to Cuba on his 145-foot-yacht was of the party-boat variety. One deckhand told the St. Petersburg Times, "Mr. Greene's yacht is known to be a party yacht. When it went to Cuba, everybody talked about the vomit caked all over the sides from all the partying going on." (Greene has denied the party boat story.)
Either way, with Meek and Greene trading blows daily, the race for the Democratic nomination in Florida has descended into one big and ugly attack spree. That doesn't inspire much confidence in voters, at a time when Congress' confidence ratings are already abysmal. For Democratic voters in Florida, their pick for the party's nomination could mean choosing the least-worst candidate on August 24.
The utter failure of the Obama administration's flagship homeowner rescue is, by now, commonknowledge. But has Fannie Mae, the government-backed and taxpayer-supported housing finance company, played an active role in sabotaging Obama's $75-billion bust of a program?
That's the most explosive allegation leveled by Caroline Herron, a former Fannie executive who worked closely with the Treasury Department on the housing program, called the Home Affordable Modification Program. Herron's claims appear in a suit, first reported on by Michael Hudson at the Center for Public Integrity, in which she alleges that Fannie fired her for criticizing the corporation's handling of HAMP and blackballed her from working at Treasury, where she'd hoped to start a new job. Herron's suit, available here, offers a damning critique of Fannie's handling of HAMP, saying the company put the pursuit of easy profits above helping American homeowners—even though it's ultimately American taxpayers who've kept Fannie afloat with more than $85 billion in bailout funds.
Here's one passage from Herron's suit:
"It appeared that Fannie Mae officers were focused on maximizing incentive payments available to Fannie Mae under various federal programs—even if this meant wasting taxpayer money and delaying the implementation of high-priority Treasury programs."
As the suit explains, Fannie received "substantive" incentive payments by getting homeowners modified mortgage deals on a temporary basis. In HAMP, you see, the homeowner first goes through a multiple-month trial run with lower payments. If the homeowner stays current during the trial run, the modification should theoretically be converted into a permanent modification, with the lower terms applying for three to five years. A three- or four-month trial mod doesn't do a homeowner much good—but those trial runs did put money in Fannie's pocket. As CPI's Hudson reports,
Herron charges that Fannie Mae continued in headlong pursuit of “trial mods” even though it knew many had little chance of becoming permanent. As late as September 2009, barely 1 percent of trial modifications had converted to permanent modifications by the end of their three-month trial, a Congressional oversight panel found. Nevertheless, Fannie preferred doing trials, Herron alleges, because it was eligible to receive incentive payments from the Treasury Department for trial modifications it booked before the end of 2009.
Another key part of Herron's suit is her description of Fannie's handling of what's called a "borrower portal." A chief complaint about HAMP is the sheer amount of paperwork involved, how that paperwork gets lost when sent to mortgage servicers, and how the application process creates a major bottleneck for the program. A borrower portal is basically an online application website, which, its proponents claim, would cut down on the paperwork debacle and speed up the application process.
To its credit, the Treasury Department wanted a portal for HAMP, and asked Fannie to get one into place. Herron, however, alleges that Fannie did everything it could to block the portal and resist Treasury's request, which would've boosted HAMP. In other words, the company Treasury hired to run large parts of HAMP actively prevented the program from helping as many homeowners as it could. Herron's suit says she fought Fannie's attempts to block the portal, and that action led to her firing.
In all, Herron's allegations, if accurate, offer a damning look at how Fannie, already marred by years of mismanagement and accounting controversies, repeatedly undermined HAMP, the bailout-funded program created with regular Americans (and not big banks) in mind. Still, HAMP has mostly been a disaster and waste of taxpayer money. And little wonder why: The people running the show are dooming it fail.
Read former Fannie Mae executive Caroline Herron's suit against Fannie Mae:
The Labor Department's monthly numbers are out, and it's mostly dark clouds in the jobs world. The unemployment rate remains 9.5 percent. The public sector shed more than 200,000 jobs in July, most of which were expired Census gigs. The ratio of employed Americans to the adult population dwindled slightly, but for did so for the third month in a row—a troubling sign. And the real unemployment figure—accounting for unemployment, underemployment, and discouraged workers—is stuck at 16.5 percent.
A silver lining: The private sector added 71,000 jobs in July, which, as Ezra Klein points out, is the most since April and third-best in 2010. He adds optimistically, "The 71,000 jobs we did gain came from the right place, and the jobs we lost are job losses we can prevent if Congress finds the will and the votes."
That optimism don't appear to shared by most other observers, nor backed by the Labor Department's data when you dig deeper in. For instance, the Labor Department went back and revised its jobs figures for June, reporting that 267,000 jobs were lost instead of 125,000 as initially thought. That's a major revision—and further proof that the economic recovery is far weaker than already thought.
Although the unemployment rate didn't budge, that's not because the jobs picture is getting rosier. Rather, people are still leaving the work force, quitting their search for a new job. As Zero Hedge points out, the employment-to-population ratio is the same today as it was in October 1983, per this chart:
Via Zero Hedge.
When the jobs picture finally begins to improve in earnest, those same people, encouraged by the positive signs they see on TV or read in the papers, will begin looking for work again. As a result, the jobless rate could inch even higher.
Meanwhile, the ranks of the long-term unemployed—out of work for six months or more, but still looking—remain at near-record levels, at 6.6 million, or 45 percent of all unemployed. That's still a staggering number.
All in all, this is more bad news for the Obama White House and Congress, especially the downward revision for June. It's telling that Christy Romer, the White House economic aide now on her way out the door, downplayed today's report: "It is important not to read too much into any one monthly report, positive or negative."
Yes, Congress' efforts to send more fiscal aid to state governments and small businesses (though the math behind the latter is somewhat flawed) are urgent and necessary, it's up to private employers right now to get the Great American Jobs Machine chugging along again. Many private employers have the money to increase hiring, but are spooked by new regulations or the instability of the economy and remain on the sidelines. We won't get growth until they start opening their doors again.
Should we extend the Bush tax cuts? Let them expire for all Americans? Or lapse just for the very wealthy? These are the questions being asked in the latest economic battle that's playing out here in Washington. If the Bush tax cuts, implemented in 2001 and 2003, were allowed to expire for everyone, the average American household's tax payment could increase by about $1,500, according to the LA Times. So far, the fate of the Bush tax cuts is dividing lawmakers along the typical partisan lines, with Democrats and the Obama administration demanding an end to them and Republicans arguing for their extension.
And then there's centrist Sen. Ben Nelson (D-Neb.). He says he opposes increasing taxes, and thus supports extending the tax cuts. Nelson supported his un-Democratic position with this statement: "I think we're at a point in our economic recovery that anything that would adversely affect it, we ought to avoid."
Hmm. That sounds awfully hypocritical. After all, the veteran senator voted against or failed to show up to vote on an issue that's arguably the best tonic for our ailing economy: unemployment benefits. Nelson opposed or ignored jobless benefits five separate times over the last two years. Nelson cited concerns that adding to the deficit "could jeopardize the recovery."
Too bad that's utterly inaccurate. As countless economists (pdf) and studies have shown, unemployment insurance is an effective form of stimulus and a way to bolster the economic recovery. Weekly unemployment insurance checks mean money in the pockets of out of work Americans, who in turn will spend that money on groceries, health care, or searching for a new job, which, if they find, puts them back in the tax-paying workforce. As White House budget guru Peter Orszag put it, "Research has shown that the unemployment insurance system is among the most effective dollar-for-dollar economic stabilizers that we have in terms of counterbalancing periods of economic weakness."
So Ben Nelson says he's against anything that hurts the economic recovery, yet repeatedly blocked jobless benefits even though they're one of the best tools out there for boosting the economic recovery—a position that makes no sense at all.