Congratulations, Mr. President. This week you followed your increasingly populist rhetoric with some decisive action on behalf of the middle class.

Republicans have been waging a sabotage campaign against the lawful functions of government. With these recess appointments you've shown that you'll use your Presidential authority to stop them. Unfortunately, your Treasury and Justice Departments are still running interference for the big banks.

Your officials are pushing a foreclosure settlement that thwarts justice and potentially leaves criminals in positions of wealth and power. If this settlement is finalized it would undo all your recent efforts, leaving the distinct impression that your Administration works for bankers and not the public.

It's time to call off these officials and instruct your Administration to pursue wrongdoing wherever it may be found.

Republican Fifth Column Sabotages America

Obstructionist Republicans have been blocking the appointment of anyone to direct the Consumer Financial Protection Bureau (CFPB) for nearly a year, preventing it from assuming its full regulatory powers under law. They've also been refusing to confirm anyone to seats on the National Labor Relations Board (NLRB), which has paralyzed that agency.

That's not an accident. Republicans on Capitol Hill have had a long-term strategy of paralyzing the government from within in exactly this manner: by refusing to approve nominees to carry functions that were passed into law by Congress itself.

The CFPB is a case in point. Once it was created by Dodd/Frank (with two Republican Senators voting "aye"), forty-four Republican Senators signed a letter say they would refuse to confirm any Director until the bureau was made considerably weaker. Two Senators who had the bill watered down in return for their votes, Olympia Snowe and Susan Collins, then turned around and signed the letter.

Burning Down the House (and Senate)

See what they did there? The law was passed according to due legislative process,and these Republicans immediately announced their intention to paralyze the bureau with a technical trick. That's sabotage, and the saboteurs included two Senators who won concessions in return for their votes and then worked to undermine the very deal they'd accepted.

As for the NLRB, Dave Johnson recently observed that Republicans paralyzed it by using the same tactic - refusing to confirm anyone for seats on its board. As a result, American employees were left without government-sponsored workplace protections.

Republicans also set about to deliberately obstruct and hinder the functioning of the Financial Crisis Inquiry Commission, a bipartisan panel created by Congress to investigate the causes of the financial crisis that has harmed tens of millions of people. As internal emails and other evidence soon made clear, several Republican appointees made it their business to obstruct the Commission's actions. Then they fought to discredit the Commission's final report. (See here and here.)

That's sabotage, pure and simple.

The Turnaround

Faced with such brutal obstructionism, it's been remarkable at best that this President has used his recess appointment power much less than his predecessors. That has seemed like a remarkably passive response to a concerted Republican campaign designed to paralyze the lawful functions of government.

Now it looks as if the President is beginning to fight back. CFPB Director Richard Corday is promising aggressive action and the NLRB can go back to work protecting Americans who work for a living. This action caps a two-month period in which the President has begun using the populist rhetoric of Teddy Roosevelt and Occupy Wall Street, and has promised at long last to stop dancing with an obstructionist Congress and take bold action to address our ongoing economic crisis.

He's being rewarded for it in his poll numbers, too. He's still in big trouble compared to his predecessors - even Jimmy Carter was doing much better at this point in his Presidency - his approval ratings have jumped since he began following some of the advice he's been getting from the much-decried "institutional left."

That shouldn't be a surprise: Poll after poll has shown that the vast majority of voters (often including a majority of Republicans) wants to see higher taxes for millionaires, safeguards for Social Security and Medicare, and an end to the cushy treatment of Wall Street wrongdoers. Appointing Cordray will help him address that last issue.

If he keeps this up the President could paint a 2012 narrative that's straight out of a Sam Peckinpah movie: He was reasonable - maybe too reasonable, some folks said.

I can see the poster now. But everybody has their limit ...

The artlessness of the deal

But any good will the President may have earned could be evaporated in an instant if a cushy foreclosure fraud settlement is reached with the big banks. There is a mountain of evidence suggesting that bankers deliberately committed widespread fraud against homeowners by filing false court documents (perjury), avoiding local and state filing fees (tax evasion), and deceiving investors about the quality of mortgage-backed securities (fraud; securities fraud).

The public has watched with frustration and fury as the SEC negotiates deal after deal with big banks to settle their criminal activity with fines that are paid by others (often the same investors who were defrauded by bank executives) while the Justice Department does nothing to investigate or indict bankers. A few courageous state Attorneys General have been investigations that could uncover the extent and nature of the banks' criminal fraud and put some malefactors behind bars.

Nevertheless, officials in the Obama Administration are still aggressively pushing for a deal that would allow the banks to pay a relatively small sum, given the scope of their crimes. It would shut down those state investigations, too. That would prevent the public from every learning the extent and nature of bank crimes, and would protect possible criminals from the consequences of their actions.

There's still time

Imagine what will happen if a settlement deal is announced in the next few weeks or months, and that deal allows bankers to walk away scott-free while homeowners suffer. The President's poll numbers will plunge. Occupy demonstrators are likely to target banks, the Justice Department, the White House, and every Democratic precinct headquarters in the country.

And that's not the tragedy here. The consequences for American homeowners would be the real tragedy: No justice for people who were deceived into borrowing money on homes that the banks knew would drop in value. No justice for people whose homes were over-valued by bank-friendly appraisers. No justice for states who were defrauded out of their bank fees, or for investors who were deceived into losing money.

Even people who were foreclosed upon illegally wouldn't be guaranteed justice, since the administrator of the restitution fund would be hired and supervised by the banks. (There would be oversight by government regulators, but how has that worked out so far?)

Don't do it, Mr. President. Don't let your Administration be the architect of a lousy deal like this. There's still time to do the right thing. There's still time to use your Administration's resources to help the states uncover crimes, wherever they occur.

Most of all, there's still time to issue a directive to the Treasury Department and Justice Department: No cushy deal for bankers.
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Fix Foreclosure Fraud With A Borrowers' Bill Of Rights

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