Today, President Obama announced that he will nominate Rep. Mel Watt (D-NC) to be the director of the Federal Housing Finance Agency (FHFA), the agency that regulates housing giants Fannie Mae and Freddie Mac.

As a veteran of the House Financial Services committee, Watt is well-qualified to lead the agency. Among his accomplishments on the committee is the spearheading of one of the earliest federal efforts to combat predatory lending, and had Watt’s bill passed, it could have prevented some of the worst practices that led to the housing crisis.

Watt’s nomination comes at a crucial time for the agency, as the companies it regulates currently guarantee approximately two-thirds of new mortgages. FHFA is currently run by Ed DeMarco, an unelected and unconfirmed civil servant who is using his virtually unlimited powers to reshape housing finance in America. These decisions will impact nearly all American families whether they own their home, hope to become homeowners someday, or are simply seeking affordable rental options.

Yet instead of using Watt’s nomination to begin an open discussion about the future of housing finance, the right is already signaling they will gin up a misinformation campaign in an attempt to derail his nomination.

The first salvo appeared in a blog post from the Wall Street Journal bluntly called “Obama, Housing, and Blacks.” (Is it a coincidence that this piece was published on the same day that the Administration nominated Watt, who is African-American, and was once a chairman of the Congressional Black Caucus?)

The Journal piece begins by referencing an Urban Institute report describing the massive loss of wealth by Hispanic and black families during the Great Recession, a large part of which was due to collapsing home prices. But the piece blames this loss of wealth on “federal policies that pushed lenders to loan money to people unlikely to be able to repay it.” The piece goes on to claim that “well-intentioned housing policies aimed at low-income minorities” have only “[saddled] a lot of minorities with foreclosed homes, huge debt burdens and bad credit scores.”

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Our guest blogger is David Sanchez, a special assistant with the economic policy team at the Center for American Progress Action Fund.

While Congress scrambled to undo sequestration cuts to the Federal Aviation Administration last week after receiving complaints from frustrated travelers, one Republican is shrugging off the impact of the across-the-board cuts in his state:

Rep. Billy Long (R-Mo.) said this week that most people that he’s spoken with in his district support the sequester and want to see more of these forced, across-the-board cuts to federal spending.

“The people that I’ve talked to seem to be doing well. In fact, when I got out in restaurants here in town, people come up to me. They want to see more sequestration, not less,” he said, according to KOLR 10 television.

Long also downplayed the effects of the sequester and said people he’s met in Missouri are not feeling the pain of the cuts.

“I think that’s different than it could be in some parts of the country, but we haven’t seen any measurable effect here at all,” he said.

But Missouri isn’t immune to the impact of the cuts. A Head Start facility in St. Charles closed its doors and the program will reduce the number of children by 65 while laying off 18 staff members in other locations. Another in Ironton will drop three weeks of programming. The Youth Conservation Corps program for inner city children at Wilson’s Creek National Battlefield will be shut down. Cuts to defense spending will hurt the state, which is home to two large installations, Fort Leonard Wood and Whiteman Air Force Base. Whiteman officials have already cut flight training time by 10 percent, eliminated non-essential travel, and frozen civilian hiring.

The pain could pick up speed as the year continues. The state’s Head Start program is likely to drop 1,200 children in total, and its education system overall will lose $11.9 million in funding, putting 160 education jobs at risk, serving 17,000 fewer students, and funding 60 fewer schools. Up to 8,000 civilian defense employees could be furloughed, resulting in the loss of $40 million in wages. A variety of other programs will lose significant money, including meals for seniors, air and water protection, domestic violence services, job search assistance programs, and law enforcement and public safety.

If national polls are any indication, the citizens of his state may not agree with his assessment. A new poll finds that just one in ten Americans said sequestration cuts will help the economy, while nearly half felt that they will hurt. These sentiments held true for Democrats, Republicans, and independents alike.

An important poll was released Friday by National Journal, reported by Ron Brownstein here and here.  The poll digs deep into people’s economic hopes and fears, uncovering a deep vein of pessimism about the country’s economic trajectory and what that means for the fate of the middle class. This economic pessimism is Obama’s greatest enemy: it can potentially break down the coalition that came together so successfully to re-elect him and it will certainly stymie any efforts that are being made to expand that coalition.

Start with raw economic dissatisfaction. As summarized by Brownstein:

The millennial generation and minorities are much more likely than the public overall to describe their current economic situation as only fair or poor. While 54 percent of the public overall (and just 39 percent of the college white women) put that negative designation on their current economic standing, 63 percent of millennials, 67 percent of African-Americans, and 69 percent of Hispanics say they are struggling…. [I]f minorities and millennials remain this dissatisfied with their economic condition, Democrats will face a growing challenge to maintain through 2016 the lopsided advantages they enjoyed among them in 2012.

In chart form:

That’s bad. And it gets worse. When asked how the middle class is faring today versus their parents’ generation, respondents were far more likely to say things are worse today than better. Brownstein:

Respondents were twice as likely to say the middle class has less, rather than more, opportunity to get ahead today than in their parents’ generation. They were three times more likely to say today’s middle class has less, rather than more, expendable income after paying for expenses. And they were four times as likely to say today’s middle class has less, rather than more, job security than the previous generation.

Chart:

These are politically toxic sentiments, no doubt fed by our ongoing economic woes. If they continue to deepen, it will become ever more difficult to reach beyond the core Obama coalition (even assuming that coalition can be kept together) and recruit new supporters who believe in change. This is particularly true of the white working class, whose views across a range of indicators are uniformly and strikingly pessimistic.

Start with whether they had reached a higher class position than their parents.  Unlike most other groups in the survey, noncollege whites were more likely (36 percent) to say they’d lost ground rather than gained ground (29 percent), relative to their parents.  And a stunning 76 percent of white working class respondents over the age of 40 expressed fear that they would fall out of their current economic class over the next few years, including 46 percent who were “very concerned”.  Reflecting these fears, 60 percent of non-college whites define being middle class as simply managing not to fall behind (“having the ability to keep up with expenses and hold a steady job while not falling behind or taking on too much debt”) rather than getting ahead (“having the opportunity for financial and professional growth, buying a home, and saving and investing for the future”).

Unsurprisingly, their view of the President and his policies is rather bleak. Just 32 percent of white working class respondents approve of his job performance and a meager 18 percent believe his policies will “increase opportunity for people like you to get ahead.”  Efforts to expand the Obama coalition among this demographic seem likely to founder on these sentiments until and unless strong growth returns to the economy and they can envision a future that offers more than a struggle not to fall behind.

In his weekly general address in Vatican City’s St. Peter’s Square on Wednesday — which is also the labor holiday May Day — Pope Francis condemned putting profits ahead of human suffering and called for job creation:

“And here I think of the difficulties that, in various countries, today afflict the world of work and businesses,” he told tens of thousands people gathered for his weekly general audience in St. Peter’s Square.

“I think of how many, and not just young people, are unemployed, many times due to a purely economic conception of society, which seeks selfish profit, beyond the parameters of social justice. I wish to extend an invitation to solidarity to everyone, and I would like to encourage those in public office to make every effort to give new impetus to employment.”

The Pope has long been an advocate for the poor, living a spare lifestyle, visiting impoverished areas, and taking his name from the Catholic church’s biggest advocate for the poor. He has called extreme poverty and growing income inequality violations of basic human rights.

Pope Francis joins a growing anti-austerity chorus on his continent. U.S. officials have also urged Europe to shift the focus away from budget cutting and toward pro-growth policies. Yet leaders in this country haven’t heeded the same advice, hurting growth with spending cuts and harming important social programs.

Francis also condemned the factory collapse in Bangladesh and working conditions in that country:

A headline that impressed me so much the day of the Bangladesh tragedy, ‘Living on 38 euros a month’: this was the payment of these people who have died … And this is called ‘slave labor!’

The death toll from that tragedy has already exceeded 400, yet major U.S. retailers have refused to implement a plan for better safety and working conditions.

GOOSE CREEK, South Carolina — Former Gov. Mark Sanford (R-SC) fielded questions from members of the local chapter of the NAACP on Tuesday, and explained his support for a balanced budget constitutional amendment by citing the now thoroughly debunked research by Professors Carmen Reinhart and Ken Rogoff.

“I don’t think it comes as any epiphany for anybody that I’m for a balanced budget…I’ve been focused on this for a long time because there was a professor from the University of Maryland and a professor from Harvard, Reinhart and Rogoff. They did a study of the last 800 years of financial history…What they said was in every instance civilizations basically get to a tipping point when they have to decide ‘do we continue with this sort of happy but ultimately unsustainable cycle of upward government spending, upward government consumption?’ And 9 times out of 10 they said we’ll just continue down that path because this time it’s different. But it’s never different. The math always works.”

Watch it:

In fact, the math only worked after Reinhart and Rogoff wrongly excluded a significant amount of inconvenient data, gave improper weight to certain statistics that backed up their hypothesis, and committed a sloppy error in an Excel spreadsheet that dramatically altered their findings. Their 2009 book “This Time Is Different: Eight Centuries of Financial Folly” that Sanford referenced on Tuesday is based on much of the same data as their debunked 2010 report.

Fiscal conservatives worldwide had for years cited the academic research by Reinhart and Rogoff, which purportedly showed a deleterious effect on economic growth once federal spending eclipsed 90 percent of a country’s GDP. But in the weeks since a group of researchers at UMass-Amherst published their own findings that corrected the errors of Reinhart/Rogoff, politicians like Paul Ryan have largely tried to distance themselves from the report. Sanford is among the few politicians still left propping up the faulty data as evidence in support of austerity measures.

Congress recently passed a bill to undo furloughs at the Federal Aviation Administration (FAA) caused by sequestration, but it left cuts to many other programs intact, including Meals on Wheels. The program brings hot meals to homebound seniors and adults with disabilities, thus providing them with nutrition and helping many of them live independently.

Directors of Meals on Wheels programs across the country spoke with ThinkProgress about how they are coping with decreased funding. Some, like Meals on Wheels of Western Broome in New York, are private nonprofits that don’t rely on government funding and will therefore be shielded. But by and large, the heads of these programs described facing deep cuts after having already slimmed down in response to lean times over the past few years.

Contra Costa County, California: Meals on Wheels of Contra Costa will need to reduce its program by about 13 to 15 percent, which means it will reduce its current 1,500 delivered meals by 200 a day, treasurer A. Paul Kraintz told ThinkProgress. The program had already been struggling with cuts, and then “we get hit with a thousand dollar sequestration cut and it just shoved us over the cliff,” he said. As of May 1 it will freeze new enrollees to the program except for those in the most critical need who have no other means of getting a daily meal. The program usually adds about 50 people a month as vacancies occur, so it will reduce its rolls to a more sustainable level through attrition over three or four months.

If the picture doesn’t improve by next year it will have to consider cutting back on routes and staff. It also risks drying up its contingency fund in a year or two if funding isn’t restored. “And that’s a real problem because when you’re providing a service like this you should have a contingency fund,” he added.

The financial troubles at the Contra Costa program will simply mean a greater strain on other systems, he was quick to point out. “The health care system’s going to pay for this, no doubt about it,” he said.
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