So here’s what I expect will happen. The lame duck session of Congress will pass a bill that essentially papers over the misdeeds of the banks that originated mortgage securities. Every member of Congress and every Senator who has been voted out of office will cast a vote for the bill. And the President will sign it.
Will the public be outraged? Probably. Financial bloggers will scream from the high heavens against another bailout of the banksters. Congress may try to create some cost for banks in exchange for the forgiveness, perhaps requiring more mortgage modifications.
But the much feared put-back apocalypse will be laid to rest.
If you’re skeptical about the possibility that this will happen, you have greater faith than I do in the ability of the political system to resist doing favors for bankers.
Carney is clearly underestimating someone here. Oh, not Republicans in Congress. He's right that this is exactly what they will try to do. I think he's underestimating the President and Democrats somewhat, but not by much.
But Carney is completely underestimating the American people. The second this happens, you will have an event which will put the Teabaggers, the Centrist Daleks, and the Dirty F'ckin Hippies on the same side, and it will be a dangerously beautiful thing. It would be a visceral reaction out there: Congress just passed a law allowing the banks to get away with stealing people's homes.
Madness. You thought people hated TARP? This would be riot-inducing, not to mention morally and legally wrong as hell. It would be over for this administration, not to mention Congress.
I just don't see how this happens. It can't.
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