C’est au bord du gouffre qu’on arrive à changer. Dr. Helen Benson (Le jour où la terre s’arrêta, décembre 2008)
Il ne faut jamais gaspiller une crise grave. Cette crise fournit l’occasion de réaliser des choses qu’on n’aurait pas pu faire avant. Rahm Emmanuel (directeur de cabinet de Barack Obama)
Les historiens de la moralité nous rappellent que ceux qui ont recherché le pouvoir par des moyens douteux pour des buts soi-disant élevés changent rarement de méthode lorsqu’ils arrivent en position d’autorité. Victor Davis Hanson
L’histoire a perdu le compte de tous les despotes qui ont émergé à la faveur du chaos. Ariane Krol
Les Démocrates seraient-ils en train de nous rejouer la « stratégie du choc » à la Naomi Klein?
Guerre quasiment gagnée en Irak, ennemis de l’Amérique terrés dans leurs grottes ou largement affaiblis par l’effondrement du prix du pétrole et du gaz, relations avec l’Europe depuis bien longtemps normalisées, crise économique issue d’une décennie d’interventionnisme étatique commencée, contrairement à ce qu’en disait il y a deux jours le NYT, bien avant l’Administration Bush …
Reprise en main voire élimination des radios de droite, commissions et poursuites judiciaires des anciens membres de l’Administration Bush, frontières ouvertes et amnisties pour les immigrants irréguliers, fin des élections syndicales secrètes, reprise du modèle Freddie/Fannie pour étendre l’emprise de l’Etat …
Alors que, comme semblent le confirmer ses premiers choix de personnel (recyclage des anciens de l’administration Clinton – mais avait-il le choix les Démocrates n’ayant été au pouvoir que 8 ans sur les 28 dernières années ? – et même reprise – pour la Défense! – d’un ancien de l’équipe Bush), l’auteur du hold up du siècle s’apprête à nous sortir le coup de bonneteau du siècle …
Et au moment où sort l’intéressant remake du « Jour où le monde s’arrêta » (même s’il a encore besoin d’attribuer la fin du monde à des forces extérieures à nous) et son ordre du jour décroissantiste ainsi que ses héros dûment politiquement corrects (et même obamesques: héroïne blanche mais veuve de guerre et mère adoptive d’un métis, etc.) …
Retour sur une édifiante déclaration de son homme de confiance, l’ancien « chien d’attaque du parti » et futur chef de cabinet de la Maison Blanche (mais aussi précédemment, ancien collecteur de fond et conseiller de Clinton et membre du conseil d’administration de l’organisme de prêts Freddie Mac!) Rahm Emmanuel deux semaines après l’élection à l’occasion d’une conférence organisée par le Wall Street Journal.
Qui, comme le montre malgré elle l’éditorialiste canadienne Ariane Krol (même s’il est vrai que l’industrie américaine et notamment automobile n’a effectivement pas profité des leçons des chocs pétoliers des années 70), fait quelque peu froid dans le dos.
Où l’on redécouvre que « l’histoire a perdu le compte de tous les despotes qui ont émergé à la faveur du chaos ».
Qu’à la différence des « gestionnaires » qui « se concentrent sur leur survie en attendant le retour à la normale », les visionnaires à la Obama-Emmanuel « voient une chance unique de réinventer le monde ».
Que « de toute évidence, le centre gauche a très bien compris la « stratégie du choc » dont Naomi Klein accuse la droite et qui consiste à « provoquer des crises » pour favoriser l’avancement de ses ordres du jour.
Qu’à l’instar du sauveur du New Deal, Saint Obama est « déterminé à saisir l’occasion » et à « profiter de la conjoncture pour implanter ses réformes » et des mesures impensables il y a deux ans, mais qui paraissent aujourd’hui beaucoup moins chimériques ».
Que, comme le ministre canadien des Finances, le nouveau Messie de Chicago « surfe sur le concept » qui, seul pour le premier (est-on prié de croire), « trahit davantage l’opportunisme que le souci du bien public » et « des manières bien cyniques de saisir une occasion de changement » ….
Profiter du chaos
le 30 novembre 2008
«Il ne faut jamais gaspiller une crise grave», a récemment déclaré le directeur de cabinet de Barack Obama, Rahm Emmanuel, dans le cadre d’une conférence organisée par le Wall Street Journal. Un point de vue qui rallie de plus en plus d’esprits en ces temps difficiles. Les crises ne sont pas seulement porteuses de calamités, mais aussi d’immenses possibilités.
«Cette crise fournit l’occasion de réaliser des choses qu’on n’aurait pas pu faire avant», a expliqué Rahm Emmanuel. Occasion: le terme résume tout. C’est ce qui fait la différence entre les gestionnaires et les visionnaires. Alors que les premiers se concentrent sur leur survie en attendant le retour à la normale, les seconds voient une chance unique de réinventer le monde.
La dynamique est bien connue en affaires. C’est ce qui a incité Nomura, la plus grande firme de courtage japonaise, à racheter de grands pans de Lehman Brothers en faillite. Une occasion comme on n’en voit «qu’une fois par génération», a souligné le président de Nomura. Plus près de nous, le quincaillier Rona compte bien profiter du ralentissement économique pour attirer des quincailliers indépendants sous sa bannière. Sans oublier Wal-Mart, qui voit affluer les nouveaux clients pendant que les détaillants plus chic mangent leurs bas.
Les politiciens, eux, sont capables du pire comme du meilleur. L’histoire a perdu le compte de tous les despotes qui ont émergé à la faveur du chaos. Heureusement, il y a aussi des chefs d’État qui ont saisi l’occasion d’implanter des réformes durables. Sans le New Deal, grâce auquel la plus grande partie des dépôts bancaires des Américains sont aujourd’hui assurés, la crise financière aurait été bien pire, rappelle l’économiste Paul Krugman. L’héritage de Roosevelt est aujourd’hui contesté, mais Krugman, qui vient de recevoir le Nobel, s’inscrit en faux. Si le New Deal n’a pas réussi à remettre l’économie américaine sur les rails, ce n’est pas parce que ce président-là en a trop fait, mais parce qu’il a été trop prudent, écrivait-il récemment dans sa chronique du New York Times.
Barack Obama, lui, semble bien déterminé à profiter de la conjoncture pour implanter ses réformes. Serrer la vis au secteur financier, investir dans l’éducation, promouvoir les énergies durables, rendre l’assurance santé plus accessible… Des mesures impensables il y a deux ans, mais qui paraissent aujourd’hui beaucoup moins chimériques. Dans son essai La stratégie du choc, Naomi Klein accuse la droite de provoquer des crises pour favoriser la montée du libéralisme économique. De toute évidence, le centre gauche a très bien compris l’usage que l’on peut faire de telles circonstances.
Même le ministre canadien des Finances surfe sur le concept. «Les chapitres les plus marquants de l’histoire s’écrivent toujours dans les moments les plus difficiles», a-t-il déclaré jeudi. Hélas, son énoncé économique trahit davantage l’opportunisme que le souci du bien public. Sabrer le financement des partis politiques? Envisager de privatiser des actifs de l’État à un moment où tout se vend au rabais? Voilà des manières bien cyniques de saisir une occasion de changement.
In Crisis, Opportunity for Obama
Gerald F. Seib
November 21, 2008
As the economic signs grow ever more grim, so do the problems facing the incoming Obama administration.
That’s one way of looking at things. Here’s another:
As the economic signs grow ever more grim, the opportunities for the Obama administration to drive through its agenda actually are getting better.
The thing about a crisis — and crisis doesn’t seem too strong a word for the economic mess right now — is that it creates a sense of urgency. Actions that once appeared optional suddenly seem essential. Moves that might have been made at a leisurely pace are desired instantly.
Therein lies the opportunity for President-elect Barack Obama. His plans for an activist government agenda are in many ways being given a boost by this crisis atmosphere and the nearly universal call for the government to do something fast to stimulate the economy.
This opportunity isn’t lost on the new president and his team. « You never want a serious crisis to go to waste, » Rahm Emanuel, Mr. Obama’s new chief of staff, told a Wall Street Journal conference of top corporate chief executives this week.
He elaborated: « Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before. »
He ticked off some areas where he thought new doors were opening: energy, health, education, tax policy, regulatory reforms. The current atmosphere, he added, even makes bipartisanship easier: « The good news, I suppose, if you want to see a silver lining, is that the problems are big enough that they lend themselves to ideas from both parties for the solution. »
Mr. Emanuel noted, correctly, that the U.S. largely squandered the opportunity the oil shocks of the 1970s presented to make serious, long-term changes in its energy habits — a failure that has returned to haunt the nation today.
Conversely, history points to examples of leaders who have used crises to seize opportunities. Most obviously, President Franklin Roosevelt took advantage of economic trauma in the 1930s to drive through a new economic agenda, as did President Ronald Reagan with his tax cuts in 1981.
The lesson holds true in foreign policy as well. Only the 1973 Arab-Israeli war, and its shock to the Middle East status quo, made it possible for President Jimmy Carter to move in and negotiate the historic Camp David peace accords between Egypt and Israel.
And so it is for Team Obama now. The risk, of course, is today’s opportunities will tempt the administration to overreach, lifting government spending so high that the deficit hangover at the other end of the cycle is intolerable, or injecting government so far into the marketplace that bipartisan support evaporates.
But for now, the call for government action is so universal that the playing field is wide open. With interest rates approaching zero, the Federal Reserve Board is nearly out of interest-rate ammunition to stimulate an economy sinking into recession; Fed policy makers likely are quietly praying for fiscal stimulus to start filling the void.
The chief executives gathered at the Journal conference this week called for the new administration to enact a fiscal-stimulus package of at least $300 billion — perhaps double the amount of stimulus such a group likely would have called for just a few weeks ago.
That creates an opening through which Mr. Obama can drive a fair amount of his domestic agenda. Certainly the field is open for some immediate form of the president-elect’s middle-class tax cut to become part of a stimulus package.
By the same token, the yearning for government spending on « infrastructure » to stimulate economic activity creates an opening for the new president to push the kind of green projects that fit his call for a transition to alternative energy sources, including new kinds of mass-transit systems. And the Obama call for government « investment » in alternative energies will be easier to turn into reality if it, too, can be cloaked as part of stimulus spending.
At the same time, as thousands of additional Americans lose jobs in the recession that lies ahead, they also will lose their employer-provided health insurance and swell the ranks of the nation’s uninsured. That will add a bit of rocket fuel to the Obama call for universal health coverage. And certainly the broad dissatisfaction with the way financial markets were regulated will make it easier to rebuild regulatory structures.
The crisis also presents the Obama team with an opportunity that isn’t so obvious: using economic distress to step back from the protectionist cliff Democrats edged toward during the election campaign.
A time of global economic distress isn’t a good time to construct barriers to international trade. Conversely, it may be a good time to help both stressed American consumers and distressed developing-world economies by lowering tariffs on some goods made abroad. One test of the Obama administration’s economic philosophy is whether it is as eager to take advantage of that opening as some of the others now before it.
Bush drive for home ownership fueled housing bubble
Jo Becker, Sheryl Gay Stolberg and Stephen Labaton
International Herald Tribune
December 21, 2008
WASHINGTON: « We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home. » – President George W. Bush, Oct. 15, 2002
The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, « scared the hell out of everybody. »
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
The president listened as Ben Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
Then his Treasury secretary, Henry Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
« How, » he wondered aloud, « did we get here? »
Eight years after arriving in Washington vowing to spread the dream of home ownership, Bush is leaving office, as he himself said recently, « faced with the prospect of a global meltdown » with roots in the housing sector he so ardently championed.
There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.
But the story of how the United States got here is partly one of Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone.
Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.
Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Bush chose to oversee them – an old school buddy – pronounced the companies sound even as they headed toward insolvency.
As early as 2006, top advisers to Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Bush and his team misdiagnosed the reasons and scope of the downturn; as recently as February, for example, Bush was still calling it a « rough patch. »
The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.
« There is no question we did not recognize the severity of the problems, » said Al Hubbard, Bush’s former chief economic adviser, who left the White House in December 2007. « Had we, we would have attacked them. »
Looking back, Keith Hennessey, Bush’s current chief economic adviser, said he and his colleagues had done the best they could « with the information we had at the time. » But Hennessey did say he regretted that the administration had not paid more heed to the dangers of easy lending practices.
And both Paulson and his predecessor, John Snow, say the housing push went too far.
« The Bush administration took a lot of pride that home ownership had reached historic highs, » Snow said in an interview. « But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost. »
For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security. The housing market was a bright spot: Ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.
Lawrence Lindsay, Bush’s first chief economic adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Bush meet housing goals.
« No one wanted to stop that bubble, » Lindsay said. « It would have conflicted with the president’s own policies. »
Today, millions of Americans are facing foreclosure, home ownership rates are virtually no higher than when Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions of dollars.
As the economy has shed jobs – 533,000 last month alone – and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.
Never once, Paulson said in a recent interview, has Bush overruled him. « I’ve got a boss, » he explained, who « understands that when you’re dealing with something as unprecedented and fast-moving as this, we need to have a different operating style. »
Paulson and other senior advisers to Bush say the administration has responded well to the turmoil, demonstrating flexibility under difficult circumstances.
« There is not any playbook, » Paulson said.
The president declined to be interviewed for this article. But in recent weeks Bush has shared his views of how the nation came to the brink of economic disaster. He cites corporate greed and market excesses fueled by a flood of foreign cash – « Wall Street got drunk, » he has said – and the policies of past administrations. He blames Congress for failing to reform Fannie and Freddie.
Last week, Fox News asked Bush if he was worried about being the Herbert Hoover of the 21st century.
« No, » Bush replied. « I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing. »
But in private moments, aides say, the president is looking inward.
During a recent ride aboard Marine One, the presidential helicopter, Bush sounded a reflective note.
« We absolutely wanted to increase home ownership, » Tony Fratto, his deputy press secretary, recalled him saying. « But we never wanted lenders to make bad decisions. »
A policy gone awry
Darrin West could not believe it. The president of the United States was standing in his living room.
It was June 17, 2002, a day West recalls as « the highlight of my life. » Bush, in Atlanta to introduce a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.
West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment – just the sort of creative public-private financing Bush was promoting.
« Part of economic security, » Bush declared that day, « is owning your own home. »
A lot has changed since then. West, beset by personal problems, has left Atlanta. Unable to sell his home for what he owed, he said, he gave it back to the bank last year. Like other communities across the United States, Park Place South has been hit with a foreclosure crisis affecting at least 10 percent of its 232 homes, according to Masharn Wilson, a developer who led Bush’s tour.
« I just don’t think what he envisioned was actually carried out, » she said.
Park Place South is, in microcosm, the story of a well-intentioned policy gone awry. Advocating home ownership is hardly novel; Bill Clinton’s administration did it, too. For Bush, it was part of his vision of an « ownership society, » in which Americans would rely less on the government for health care, retirement and shelter. It was also good politics, a way to court black and Hispanic voters.
But for much of Bush’s tenure, government statistics show, incomes for most families remained relatively stagnant while housing prices skyrocketed. That put home ownership increasingly out of reach for first-time buyers like West.
So Bush had to, in his words, « use the mighty muscle of the federal government » to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.
Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.
And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down. Republican congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as West did. Many economic experts, including some in the White House, now share that view.
The president also leaned on mortgage brokers and lenders to devise their own innovations.
« Corporate America, » he said, « has a responsibility to work to make America a compassionate place. »
And corporate America, eyeing a lucrative market, delivered in ways Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment.
« This administration made decisions that allowed the free market to operate as a barroom brawl instead of a prize fight, » said L. William Seidman, who advised Republican presidents and led the savings and loan bailout in the 1990s. « To make the market work well, you have to have a lot of rules. »
But Bush populated the financial system’s alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
Like minds on laissez-faire
The president’s first chairman of the Securities and Exchange Commission promised a « kinder, gentler » agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general’s report.
As for Bush’s banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.
The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina’s attorney general, said, « They took 50 sheriffs off the beat at a time when lending was becoming the Wild West. »
The president did push rules aimed at forcing lenders to explain loan terms more clearly. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.
In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not complete the new rules until last month.
Among the Republican Party’s top 10 donors in 2004 was Roland Arnall. He founded Ameriquest, then the largest U.S. lender in the subprime market, which focused on less creditworthy borrowers. In July 2005, the company agreed to set aside $325 million to settle allegations in 30 states that it had preyed on borrowers with hidden fees and ballooning payments. It was an early signal that deceptive lending practices, which would later set off a wave of foreclosures, were widespread.
Brian Montgomery, the Federal Housing Administration commissioner, understood the significance. His agency insures home loans, traditionally for the same low-income minority borrowers Bush wanted to help.
When he arrived in June 2005, he was shocked to find those customers had been lured away by the « fool’s gold » of subprime loans. The Ameriquest settlement, he said, reinforced his concern that the industry was exploiting borrowers.
In December 2005, Montgomery drafted a memo and brought it to the White House. « I don’t think this is what the president had in mind here, » he recalled telling Ryan Streeter, then the president’s chief housing policy analyst.
It was an opportunity to address the risky subprime lending practices head-on. But that was never seriously discussed. More senior aides, like Karl Rove, Bush’s chief political strategist, were wary of overly regulating an industry that, Rove said in an interview, provided « a valuable service to people who could not otherwise get credit. »
The White House pursued a narrower plan offered by Montgomery that would have allowed the FHA to loosen standards so it could lure back subprime borrowers by insuring similar, but safer, loans. It passed the House but died in the Senate, where Republican senators feared that the agency would merely be mimicking the private sector’s risky practices – a view Rove said he shared.
Looking back at the episode, Montgomery broke down in tears. While he acknowledged that the bill did not get to the root of the problem, he said he would « go to my grave believing » that at least some homeowners might have been spared foreclosure.
Today, administration officials say it is fair to ask whether Bush’s ownership push backfired. Paulson said the administration, like others before it, « over-incented housing. »
Hennessey put it this way: « I would not say too much emphasis on expanding home ownership. I would say not enough early focus on easy lending practices. »
Kitty Bennett contributed reporting.
Rich Addicks/The Atlanta Journal-Constitution
Bush unveiled a plan to increase home ownership by members of American ethnic minorities in a speech in Atlanta in June 20