RT stands in for another Blue Eyes (RIP)

As President-elect Obama moves to fill staff positions in his transition team and administration, locals with ties to his candidacy and a desire to move to Washington, D.C., may reasonably hold out hope of being tapped. One post that already got away from the Minnesota crowd is that of White House press secretary — Politico reports this morning that Obama has chosen campaign and Senate aide Robert Gibbs, who’s from Alabama, to fill that high-visibility vacancy. Gibbs, who served as communication director at Obama for America, beat out Bill Burton, the campaign’s national press secretary and a University of Minnesota alum. Burton made Blois Olson’s MinnPost list of Minnesotans with Obama job prospects this week.

Also on Olson’s list is Minneapolis Mayor R.T. Rybak, an early advocate of the draft-Obama movement whose line on an Obama administration post I traced back in June. Rybak’s background as a reporter got him cited at the Minneapolis Issues list this week as a possible Obama spokester, but his potential as a federal Housing and Urban Development pick is more frequently raised. Any D.C. job would likely pose a work conflict with Rybak’s rumored 2010 gubernatorial ambitions.

The news today that U.S. Rep. Rahm Emanuel will be Obama’s chief of staff means Minnesotans may want to take advantage of any ties they have to the Illinois congressman. One is Ashwin Madia, with whom Emanuel campaigned on a special trip to Minnesota last month. The two pols “are good friends and enjoyed campaigning together. They are both incredibly smart, hard-working individuals. Whether that translates into something more in the future is anyone’s guess,” Madia spokesperson Dan Pollock wrote in response to an e-mail inquiry this morning.

Meanwhile the Minnesotan with the biggest job dangled before him is Gov. Tim Pawlenty. No longer the subject of vice-presidential speculation now that McCain passed him over for colder pastures, Pawlenty has moved up in the world and now gets daily press mentions as a presidential prospect in 2012, when he’d likely reprise his rivalry with Alaska Gov. Sarah Palin. She gets the same mentions as Pawlenty, of course, and more. But unlike Pawlenty, who campaigned hard for McCain (and his own place on the ticket) in the weeks and months leading up to the Republican National Convention, Palin has already made a place for herself in the national media spotlight, where she’s paid her dues — if not her Neiman Marcus bills.

“I have a very grave concern about that,” Preston said, according to the Seattle Post-Intelligencer.

Preston said that the plan would put the onus on the taxpayers when it was the financial institutions that took the risk. Preston told the group that the housing crisis is the fault of predatory lenders, irresponsible buyers, and careless Wall Street investors.

Some consumer groups and Senate Democrats favor what are called “cram-downs,” where a judge has the power to reduce the loan value on the primary residence for homeowners filing for bankruptcy. Yet McCain isn’t talking about cram-downs with his buying up of failing mortgages; he’s talking about the taxpayers paying the banks for the full value of the loans, and Preston says such rules would hurt taxpayers, financial markets, and the nation’s court system.

Preston was confirmed as HUD secretary in July by unanimous vote, after serving for two years as administrator of the Small Business Association. He replaced Bush-appointee Alphonso Jackson who resigned amid controversy that included allegations of awarding questionable contracts.

Other critics of McCain’s housing plan agree with Preston’s assessment of McCain’s weak safety net. Instead of having the mortgage lenders– those responsible for creating the specious loans in the first place–renegotiate loan terms, McCain’s plan would have the government, or the taxpayers, buy up the troubled loans at face value and put more money directly into the pockets of those who caused the crisis. Brad DeLong, a blogger and professor of economics at the University of California, Berkeley, also shares Preston’s concern. He notes:

The McCain plan is:

• Take $300 billion.
• Pay double current market value to banks that have troubled mortgages on their books, thus:
  • Give a present of $100 billion to the bankers who made the loans.
  • Acquire and regularize the mortgages of only two-thirds as many homeowners as could have been accomplished if the $300 billion were invested wisely.

There’s a big difference here: Democrats want to prevent depression and support the financial markets by investing taxpayer money in banks with troubled assets. Republicans want to give taxpayers money away to the shareholders and managers of banks with troubled assets.

I would say that this is unbelievable, but I do believe it.