Thursday, October 7, 2010

Obama removes IRON boot from necks of foreclosure victims

Okay the headline overstates it a bit but could you see a Republican (or even Bill Clinton) siding with the little guy over the corrupt banks?

The Interstate Recognition Of Notarization Act or more appropriately the IRON Boot Act that was introduced by Republicans and passed with help from corporate Democrats ended life in a pocket veto by President Obama today. It’s passage had been accomplished in the dead of night as the corporate media conveniently ignored the protests of consumer groups that this was a give away to predatory lenders that could run rough shod over home owners that have been foreclosed upon illegally. It’s likely that this would have spilled over into all manner of corporate predation against anybody they chose to target.

You could say cynically that the Dems passed it just so Obama could veto it and look like a Dudley Do-right and make the bankers look like Snidely Whiplash as if that was hard to do. Well, Little Nell is off the rail road track just the same. No word if Elizabeth Warren played any role in Obama’s decision but it’s exactly the sort of thing she’s know for.

The currency war continues with the USD falling against the Euro and the Yen but gold was down as job numbers seemed to calm the panicked rush to get out of USDs. Treasury bonds were unchanged today as traders are waiting to see if the Fed will really start buying them big time.

The last big buying spree put a lot of cash in the hands of the Wall Street Banks and the big corporations with them now sitting on upwards of 3 trillion dollars and not putting a dime of it into jumpstarting the economy. Do you remember the pundits were predicting high inflation because of all the money the Fed printed?

You see they did inflate the money supply by a 100% but the money didn’t circulate so you didn’t get the price increases that are normally associated with inflation. It wasn't really intended to circulate but prevent deflation, and the economy would return to "normal", at least that was the theory. Some inflation is required to maintain a debt based system or it will automatically slip into deflation if you don't have commodity price controls. (like the gold standard, but you would need to do it with at least 30 commodities to make it work) If they do another round of money supply inflation and it does start to circulate there is a very real risk of things will get out of hand and hyper price inflation will set in.

The Fed claims that they have created a system to take money out of the overnight debt market to keep this from happening but it’s never been tested in the real world and maybe just wishful thinking. Keep your wheelbarrow in good shape to haul your “loaf of bread” money just in case.


PitchingDoc said...

Your statement: "...big corporations with them now sitting on upwards of 3 trillion dollars and not putting a dime of it into jumpstarting the economy. Do you remember the pundits were predicting high inflation because of all the money the Fed printed?"...

makes it seem like the banks, villainized for NOT loaning money to the public and small business, actually helped the economy by preventing inflation due to holding the money.

It all comes down to manipulation by those at the top. A great editorial in The Monthly Review today ( states "economics, for all its usefulness, has long since metamorphosed into a corrupted science of a corrupted society."

Anonymous said...

I'll be relieved ONLY when the veto is actually performed, not merely talked about.

When that happens i would suggest that the boot has not been removed from the collective neck of home owners but only that no further pressure has been applied.

The boot is removed when congressional and DOJ action exposes and ends the life-destroying activities of the criminally greedy.

Of course, for all we can tell, as of Nov 3, preparations will begin to made for canonization of the terminally greedy, instead.

For example, see the following summary of pre-election polls:

(Thanks PitchingDoc for the Monthly Review revelation)

John Puma

Anonymous said...

The article mentions that this bill "ended life as a pocket veto."

I see two problems with this.

A pocket veto occurs automatically (see below) if a) the president does not sign a bill within ten days after it is presented to him (Sundays excluded) and b) this occurs while congress in recess.

The Library of Congress web site ( says this bill (H.R. 3808) was presented to the president on the 30th of September.

Therefore, as to a), it seems this bill cannot die of pocket veto until October 13th at the earliest, a few days from now.

As to b): is the "Congress" really in recess? The Senate Dem leadership will hold "pro-forma" sessions to prevent the GOP from sending back any of Obama's nominees, but this will ALSO prevent Obama from making recess appointments. How are "pro-forma" sessions treated by the requirements of the pocket veto?

Some suggest the Dems let this horrible bill blow through Congress to give Obama something to veto before the elections. It would be the (latest) ultimate blow if the threatened (pocket?) veto was invalid because of inattention to legal technicalities, or, horrors he's been talking "veto" merely as a political head fake and will use the technicalities to cancel his "intent." This would be consistent with an apparent preference for corporate dollars rather than the good-will, and votes, of his supporters.

Note 1)
The U.S. Constitution Article 1, Section 7 states:

"If any Bill shall not be returned by the President within ten days (Sundays excepted) after it shall have been presented to him, the same shall be a Law, in like manner as if he had signed it, unless the Congress by their Adjournment prevent its return, in which case it shall not be a Law."

Note 2:
The story on the "pro-forma" Senate sessions are here:

John Puma

prairie2 said...

The House, where the bill originated, is in recess. The WH has said they will return the Bill there. These people are lawyers including Professor Obama, I think they can figure it out. If Congress were controlled by Republicans then I would expect problems. Maybe this doesn't indicate Obama is on our side after all, but Little Nell got a break today.

Anonymous said...

One would also think that if Obama were fully intent on vetoing it he could do just that and actually veto it, eliminating any further speculation as to whether the bill is truly dead or not. That said I agree with the earlier poster who pointed out that if this bill does in fact die it is not removing anything from homeowners' necks, it just not adding anything else to the already untenable situation many homeowners find themselves in underwater mortgages that they have already sunk hundreds of thousands of dollars into. Now had Obama signed a bill to freeze foreclosures on homeowners during this crisis, then we could begin having something to cheer about. But I guess these days we have to look for the silver linings as most days are likely to be fair to partly cloudy.

Anonymous said...

I too heard the WH claim it would "return" the bill to the House. That would be a veto, not a pocket veto. But the House is in recess, as you state, therefore the bill cannot be returned there, as per the words of the constitution presented above. ("unless the Congress by their Adjournment prevent its return.")

The pocket veto is still possible but cannot be in effect until the 13th. So the bill is NOT YET dead.

John Puma

Anonymous said...

And here's the clarification I've been asking for (John Puma):

"The White House

Office of the Press Secretary

For Immediate Release October 08, 2010
Presidential Memorandum--H.R. 3808

It is necessary to have further deliberations about the possible unintended impact of H.R. 3808, the "Interstate Recognition of Notarizations Act of 2010," on consumer protections, including those for mortgages, before the bill can be finalized. Accordingly, I am withholding my approval of this bill. (The Pocket Veto Case, 279 U.S. 655 (1929)).

The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. My Administration will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.

To leave no doubt that the bill is being vetoed, in addition to withholding my signature, I am returning H.R. 3808 to the Clerk of the House of Representatives, along with this Memorandum of Disapproval.


October 8, 2010."

SanMigMike said...

Looks good and it might slow down things a bit but I don't think in the long run it will do that much. I have how much to pay a lawyer and a bank has how many lawyers trying to prove themselves. Throwing a chewed on bone to the poor.

Do I think Obama is on our side (our side being the other 98%)? NO. Do I think that he is better than McCain or another Republican? Yes. But in the long run we are looking at maybe a year or two at the maximum for the difference in time before the real crash that will indeed force change.
Nothing has really changed. Hiring? No. Education support? No (serfs don't really even need to read and write). Real change on health care? NO (same companies might make a few bucks less but they are sure that they can roll it back with Republican help). Credit for small business...ROTFL! But so many small business types keep thinking Republicans are for them...forgetting that to the Repblicans "small business" isn't the little shop on Main Street unless that shop is 7-11 or Walmart or a Shell gas station...even then Shell is their friend, not the dealer on Main.

I think we are a Fourth World Country...a country that is "better" than a Third World Country but in an astonishing stupid manner rushing to join the Third World.

Our whole way of existence is threatened. We are dedicated to consumption, consuming more than we need (or can afford)...but somehow business thinks they can charge First World prices and pay Third World pay (the other guy can pay enough so that people can afford to shop at my store or buy my products). It just cannot work in the long run. If we are going to consume more we have to have more income...

Of course in the long run we do need to reduce consumption but...