[[{“type”:”media”,”view_mode”:”media_large”,”fid”:”93625″,”attributes”:{“alt”:””,”class”:”media-image”,”height”:”339″,”style”:”float: right;”,”typeof”:”foaf:Image”,”width”:”250″}}]]Try as I might, I cannot rule out the possibility that the Democratic Party is some sort of elaborate performance art piece. One of those subversive ones where the real point is not the performance itself, but the reaction drawn from an unsuspecting audience. There was a cocktail party where the artist explained his vision, but we squares who are part of the patriarchal consumer culture weren’t invited. They are just seeing how far they can push this thing before we catch on. That must be it.
There can be no other acceptable explanation for the straight-faced rationalizations many of us have had to sit through as to why 500,000 people getting insurance under Obamacare is more significant than 5 million Americans losing it, or how abridging the rights of lawful gun owners will somehow make us safer. I keep waiting for a narrator, clad only in a goat mask and a diaper, to emerge and make a rambling, postmodern speech about how we need to be awakened from our complacency. Unfortunately, the performance seems like it will never end. And Harry Reid is the closest we ever come to that narrator.
The good news, if you can call it that, is that presidential hopefuls have already started to crawl out of the woodwork. Twenty-sixteen can’t come soon enough; if Obama keeps showing just how much he cares for us, we might not make it. But there are plenty of high-profile Democrats who could vie for the chance to finish us off…er, that is, finish what Obama started. Some of the most intriguing potential candidates include a man equally suited for the job of crazy uncle as for his current gig as vice president; a first lady cum senator cum secretary of state who is as well-known these days for presiding over a humiliating attack on a United States embassy as for being generally unlikeable; and, who knows, newly minted Senator Cory Booker, could follow Obama’s proven path to the White House as an untested, partial-term member of the Senate—if he can keep his head down in the meantime and resist the urge to accomplish anything of meaning.
Another name being floated to execute the Democrats’ contract on America is New York Governor Andrew Cuomo, who took office in 2011 as the Empire State shook off the disastrous tenures of call girl aficionado Eliot Spitzer and his bumbling accidental replacement David Paterson. Cuomo is New York political royalty of sorts. He was married for 15 years to Kerry Kennedy, daughter of New York Senator Robert F. Kennedy, himself a presumed Democratic presidential candidate until his assassination. His brother is CNN journalist Chris Cuomo, who recently took flak for not recusing himself from an interview with his elder sibling in the aftermath of a fatal train derailment. And for those who prefer garments to governance, his sister Maria Cuomo Cole is married to Kenneth Cole, the fashion designer and social activist.
But most importantly, his father is former Empire State governor Mario Cuomo, who served three terms in the ’80s and ’90s. Andrew cut his political teeth as a staffer on his father’s failed 1977 bid for mayor of New York City. It was a bare-knuckle campaign in which Andrew was accused of pulling no punches. Someone placed signs on Queens Boulevard (the main drag through the Cuomos’ home borough of Queens) that read: “Vote for Cuomo, Not the Homo,” a reference to the late Ed Koch, Mario’s chief rival in the Democratic mayoral primary. Koch was a fundamentally decent man and a combat infantry veteran of the Battle of the Bulge whose ambiguous sexuality was long the topic of gossip in New York. He understandably took umbrage at being called a queen on the streets of Queens. Conventional wisdom was that the signs were hung by someone within the Cuomo campaign, perhaps even Andrew. Koch went on to defeat Mario in the primary and served three terms as mayor. He is fondly remembered by New Yorkers as a self-proclaimed “liberal with sanity” who restored the city’s fiscal condition after the imprudent spending of previous liberal mayors. But he never quite forgave the Cuomos for those signs.
Mario had better luck in 1982 when he again faced Koch in a Democratic primary—this time for governor. He was helped by an unforced error; Koch made snobbish remarks about the quality of life in upstate New York to an interviewer for Playboy. (I can relate to Koch. My father and stepmom live in Rochester and they keep a map of New York on their refrigerator which has the phrase “This is New York State” written over the metropolitan area and “This is too” over the remainder of the expanse.) But Mario was also helped by the political savvy of his son, Andrew, promoted this time around to campaign manager. During his father’s tenure as governor, Andrew served variously as a gubernatorial staffer, assistant New York district attorney, private lawyer, chairman of the New York City Homeless Commission, and founder of a homeless services charity. He did a competent job in these positions, by all accounts.
It is worth noting that the elder Cuomo is no stranger to presidential speculation himself. A seasoned public speaker, his keynote address at the 1984 Democratic National Convention catapulted him to prominence, and he was considered a potential frontrunner in ’88 and ’92, though he never formally entered either race. The Cuomos, father and son both, were immortalized in the roman à clef Primary Colors as Orlando and Jimmy Ozio.
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It took Andrew Cuomo two tries to make it to the governor’s mansion. A 2002 run started auspiciously, with the charismatic and telegenic Cuomo leading the pack in both the polls and fundraising. But his campaign fell apart when he made disparaging comments about Republican Governor George Pataki’s handling of September 11 recovery efforts. Momentum shifted against him, and he dropped out of the race to clear the way for New York’s milquetoast comptroller, Carl McCall, to run uncontested in the Democratic primary and lose handily to Pataki in the general election. Cuomo’s penance was to run in the next cycle for attorney general, as the incumbent of that office—none other than Eliot Spitzer—ran for governor.
Cuomo saw Spitzer, the son of a real estate magnate, use the AG post to propel himself to civic fame as the “Sheriff of Wall Street”—much of Spitzer’s policing consisted of publicly shaming corporate interests and threatening prosecution to squeeze money out of tycoons who were never charged with crimes—and figured it might punch his ticket someday, too. The gambit paid off sooner than expected as Spitzer proved unable to resist the lure of a high-price prostitution ring and resigned in shame. His lieutenant governor, David Paterson, was elevated to governor but always seemed overwhelmed in the big chair. A recurring Saturday Night Live sketch played on Paterson’s legal blindness and hapless nature by constantly having him wander on camera at inappropriate times. Paterson briefly launched a campaign for a full term, but decided to step aside for Cuomo as Cuomo had done for McCall. Reportedly, President Obama personally urged Paterson not to run. It must have been a slap in the face—Paterson was New York’s first African-American governor—but Cuomo had a date with destiny and, perhaps, designs on succeeding where his father hadn’t even tried.
At first blush, Cuomo doesn’t seem all that bad as far as Democratic governors of elite, coastal states go. In fact, a Cuomo presidency would be a day at the beach now that we’ve put more than five years of Obama’s Chicago-style cronyism behind us. Cuomo has been admirably willing to make tough choices, such as the deal he cut with New York’s largest public employee unions, the Civil Service Employees Association and the Public Employees Federation. In lieu of layoffs, Cuomo got the unions to agree to a suspension of raises for several years, furlough days, and increased contributions to their healthcare plans. He has said that reducing public employee pensions is a “top goal.” In his first year as governor, he managed to pass both an on-time budget that cut expenses without tax increases, and a property tax cap. Few Democratic governors have taken such decisive actions to restore fiscal sanity, preferring instead to indulge the unions and special interests at the trough.
But Cuomo has one huge, underreported skeleton in his closet that could emerge to block his path to the White House. During his tenure as attorney general, he had nothing but tough talk for the Wall Streeters whom he said caused the financial crisis. What he failed to mention was his own key role in causing it. From 1997 to 2001, Cuomo served as Bill Clinton’s Secretary of Housing and Urban Development, the only organization with regulatory powers over the two congressionally chartered housing finance companies at the center of the crisis, Fannie Mae and Freddie Mac. He fell into the role when, during a stint as assistant secretary, his predecessor, Henry Cisneros, became embroiled in a scandal for lying to the FBI about payments made to a former mistress. At 40, Cuomo was the youngest HUD secretary ever, and he had little previous experience in banking or finance.
A HUD press release from 1999 helpfully informs readers that “Congress gave HUD the responsibility of regulating Fannie Mae and Freddie Mac because the two companies are Government Sponsored Enterprises (GSEs) that were chartered by Congress.” Follow the logic of that non-answer. Congress gave HUD the responsibility to regulate Fannie and Freddie because Congress created them. Heaven forfend Congress should ever exercise any regulatory authority of it own, rather than delegating it to unelected functionaries. Reading this sort of stuff is enough to make anyone want to hop inside a DeLorean and go back in time to stop the madness.
The same release, remarkably, touts then-Secretary Cuomo’s initiative to force Fannie and Freddie to “provide $2.4 trillion in mortgages for affordable housing for 28.1 million families,” read: to buy up massive quantities of the bad-bet loans that eventually ended up getting us into this mess. Using his regulatory authority as HUD secretary, Cuomo increased the percentage of loans from low- and moderate-income families that Fannie and Freddie were required to buy from 42 to a staggering 50 percent of their purchases. I would like to sell some pre-scratched lottery tickets to whoever thought that was a good idea.
The release explains how the racket works for the uninitiated: “The GSEs buy mortgages issued by banks, thrift institutions and other mortgage lenders, and then package the loans and sell them to investors as mortgage-backed securities. When Fannie Mae and Freddie Mac buy the mortgages from lenders, they provide the lenders with the cash needed to issue new mortgages.” Mortgage-backed securities? Nothing could possibly go wrong, right? Cuomo sure didn’t think so. “This action will transform the lives of millions of families across the country,” he said at the time. And he was right. Just not in the way that he predicted.
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The best coverage on this issue to date has come from the Village Voice, of all places. Wayne Barrett, an excellent political reporter and even better gadfly who used to relentlessly hound Rudy Giuliani as well as my old employer, the Manhattan Institute (Giuliani’s think tank of choice), wrote a 2008 cover piece called “Andrew Cuomo and Fannie and Freddie.” The illustration shows a stunned Cuomo clutching two twin infants supposed to represent the federally chartered mortgage giants. Ignorance and Want, the two allegorical twins from A Christmas Carol,spring to mind.
According to Barrett:
Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded “kickbacks” to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.
Not all the blame, of course, rests on poor Andrew. There was near-universal consensus during the Clinton and George W. Bush administrations that homeownership was for everyone. There was an earnest and noble desire to help low-income families and members of racial minorities achieve the American Dream. There were the cynical extortion rackets run by community organizers like Obama and outfits such as the Greenlining Institute, a Berkeley-based nonprofit that waged pressure campaigns against banks to dole out loans to unqualified borrowers lest they be branded as racist. There was the complicity of those in Congress such as Barney Frank, who rewarded the cause of the extortionists with Community Reinvestment Act funds. There was the irrational exuberance of the investors who purchased the mortgage-backed securities, spurred on by embellished claims of safety promoted by the government and private investment firms. In the end, the housing bubble did what it had to do, what all speculative bubbles do: It burst.
But something more insidious was going on under the surface while Cuomo was the man in charge at HUD. Way back in 2001—a political lifetime ago for Cuomo, and perhaps longer in the memory of voters—Stephen Hayes wrote in rhe Weekly Standard that Cuomo, who had launched his first failed campaign for governor only nine days after departing HUD, had used his federal gig to pay “lavish attention to New York. He showered his home state—particularly the electorally important upstate region—with federal dollars.” Cuomo, alleged Hayes, had used HUD as his de facto campaign office, making risky bets with the house’s money in the process. Cuomo pegged funds for upstate improvement projects to Section 108 loans, which require small towns to put up future HUD allocations as collateral for present loans. If the loans go south, the towns lose out on the future cash. One senior New York State housing official told Hayes at the time that “we’ve got a black cloud over us for the next 18 years, all so he could issue press releases.”
Cuomo was so busy building his political reputation by spreading taxpayer wealth around that he forgot to keep his eyes on the money going out the door. The New York Post reported in October that tens of millions of dollars in late ’90s HUD funds pegged for the New York-New Jersey region were instead funneled to scammers. Incidentally, Cuomo’s director in the region at the time was Bill de Blasio, who is about to be sworn in as New York City’s mayor. Being an incompetent HUD administrator is a surefire path to political success, it seems.
Worse yet—though perhaps predictably—instead of performing his congressionally invested role of regulating the GSEs, Cuomo cozied up to them. At the same time that he increased the number of risky loans that the GSEs had to buy, he declined to institute reporting requirements that would have provided a clear picture of just how many had been purchased. He also reneged on a recommendation from his own office that the GSEs should be barred from purchasing loans with high costs or predatory features—you know, the kind that people are likely to default upon in droves contributing to a massive economic crash. Cuomo got his pieces of silver for this, according to Barrett who reported that at least three of the 88 lobbying firms working for the GSEs made campaign donations to Cuomo once he left HUD.
Cuomo rarely speaks about his tenure as HUD secretary these days, and for obvious reasons. Barrett noted that Cuomo’s attorney general gig created the awkward potential that he would have to bring suits against real estate interests whose practices he had previously condoned—or even encouraged. Even if Cuomo can successfully minimize his role in the crisis, it remains a political hot potato. To the extent that he has commented, Cuomo’s explanations have been facile and unsatisfying. In 2010, when running for governor, he claimed that the charges that he is partly to blame for the financial crisis are “devoid of reality.” “I was HUD secretary,” he said. “We were promoting home ownership. The administration that came in after the Clinton administration was more aggressive in promoting home ownership. There was no evidence of the sub-prime problem for years and years and years after I left HUD.” Of course, he misses the point that promoting home ownership, no matter how laudable, does not insulate you from the consequences of poor policy decisions, nor does the fact that those bad practices continued after his tenure exonerate him. As essentially one of the only men who had authority over the epicenter of the housing collapse, he can’t just wash off the stink.
Should “This action will transform the lives of millions of families across the country” be ranked up there with “I did not have sexual relations with that woman, Miss Lewinsky”? With “If you like your health plan, you can keep it”? The difference, of course, is that Cuomo’s statement was issued in earnest, whereas the other two were bald-faced lies. But that does not change the fact that he led us into one of the worst financial disasters in American history. Democratic voters must ask themselves whether that is an excusable offense. The rest of us are just glad that if we’re stuck watching a performance art piece, at least it’s an interesting one.
