Tuesday, June 17, 2008

From My Lips to Barack Obama's Ears

It was June 10 when I first picked up the story of chief campaign aide Jim Johnson, the former Fanny Mae chief and friend of Countrywide Bank executive Angelo Mozilo. I wonder now if the title to my blog was too crude: “Obama's Johnson Caught In CountryWide Bank's Zipper.”

A day or two later, Barack Obama fired Jim Johnson at warp speed. It just goes to show you the devastating impact of my 200 strong readership. Are you sufficiently wowed? Of course, the story is very big right now on the blogs, the major media, the big newspapers like the New York Times and the Wall Street Journal. Apparently, it wasn’t only Barack Obama’s Johnson which was caught in Countrywide’s zipper; Senator Dodd, chairman of the Senate Banking Committee, also benefited from being a “FOA” or Friend of Angelo (Mozilo), and so did Senator Kent Conrad of North Dakota. There’s no telling how deeply this tinge of corruption runs and the Wall Street Journal and others are right in calling for an investigation. This goes to the heart of the American economy and the reckless subprime mortgage business. It raises questions of public corruption and these senators should not be given cover simply because they are “FOB” (Friends of Obama). There were other former public officials who received phat loans from Angelo: Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke also favorable treatment which wasn’t available to other customers.

Well, this is the “new politics” folks and I hope you like it. The revolving door of politics and profit seems to be behind a lot of the Obama campaign maneuvers, beginning with the support Obama received from Rezko. While Obama was just an eager young junior politician in a hurry to rise, Jim Johnson, Chris Dodd, and these others are veteran players in an established game of hoodwinking a na├»ve public while profiting at taxpayer expense. Frankly, scams like these depend upon your neglect of tedious economic matters. Economics is a sleep agent for me as well as for too many others. I have resolved to keep myself awake, however, especially in these times of the “new politics of Barack Obama, the all-purpose Messiah-Demagogue who rants about “lobbyists” in the Republican party.

Johnson was a CEO at Fanny Mae which has the U.S. government’s imprimatur and the insurance of the taxpayer. Fanny Mae bought millions of dollars in mortgage debt from Angelo, which it then turned into securities packages. Countrywide got into deep trouble with its sub-prime lending and weak mortgage structures and this didn’t seem to bother Jim Johnson. It was far more important to cozy up to the money machine and its special “Friends of Angelo” window. The Wall Street Journal reports that 28 percent of Fanny Mae’s home mortgage (single homeowner) business was with Friend Angelo, as compared to 4 percent for giant Bank of America. No wonder B of A is trying to acquire Countrywide, notes the Wall Street Journal. The quid pro quo is that all of these people previously mentioned received special treatment in return: cheaper money, faster service, a departure from banking regulations that apply to the common folk.

If you’re at all skeptical by now, I can only suggest a stomach antacid. Obama fired Johnson at warp speed, a powerful indication of his recognition of a very serious problem. To know how serious Obama considered the potential for scandal, consider how long it took him to fire Jeremiah Wright.

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