Undernews for 3 February 2009

UNDERNEWS
The news while there's still time to do something about it

THE PROGRESSIVE REVIEW
Editor: Sam Smith

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2 February 2009

WORD
A man is accepted into a church for what he believes and he is turned out for what he knows. - Mark Twain

PAGE ONE MUST
WHO'S ON FIRST? AN EXPLORATORY CALCULATION
Sam Smith

Let's say a couple borrows $100,000 on their new house. Let's say one of the pair loses their job and has to take one at a lower wage and the family is no longer able to pay the $7200 annual mortgage cost. Thanks, however, to one homeowner still being employed, the couple can still pay about $5000, or 70% of the total.

What's to be done? If the bank lowers the interest rate from 6% to 5% and extends the mortgage from 30 to 40 years, this would lower the annual payments to about $5800, still too much but within the park. Besides, perhaps the owners have savings that allow them to handle it for a few years.

But what if the bank doesn't want to help and what if the bank is no longer in charge of the mortgage, but has bundled it off to somewhere else?

This is why giving bankruptcy courts strong powers to modify such loans is so important. Mediation can help, too, although a study in Connecticut found that about half of endangered homeowners didn't ask for any help, many apparently unaware that it was available. In the end, mediators could only resolve about 5% of the cases.

Michael Hiltzik, in the LA Times, explains how the proposed bankruptcy court changes would work:

"Under the leading proposal in Congress, a typical plan would work like this for a debtor owing, say, $225,000 on an adjustable-rate mortgage on a home now worth $200,000: The judge reduces the balance to $200,000. The excess $25,000 becomes an unsecured debt to the lender, to be paid off, probably for pennies, at the end of the case. . .

"The judge can modify the remaining loan by converting the adjustable rate to a fixed market rate, adding 1% to 3% as a risk premium. The judge can erase all the fancy gingerbread that makes so many mortgages toxic -- periodic rate adjustments, prepayment fees, balloon payments, etc. -- and extend it out as long as 40 years. If the judge determines that no combination of these alterations would produce a mortgage the debtor could handle, the house could be foreclosed."

Another solution - one the Progressive Review has argued for - would be for the government - federal, state or local - to become a part owner of the endangered house, pay its share of the mortgage and get its share of the proceeds when the house is finally sold, probably under better market conditions than at present.

But let's say the market doesn't recover and the house is sold ten years from now for 20% less than was paid for it, i.e. $80,000. The government would get $24,000 out of the sale. Interest payments plus principal balance minus sales price would leave the government in the hole about $23,000. If the house had increased in value by 10%, the government would end up down about $14,000.

But let's say you're part of the Washington power system. You know that more of your campaign contributions come from creditors than from those who owe them money. Besides you're used to dealing with issues from the top down. So instead of be interested in working out endangered homes at a local level based on the specific facts of each case, you decide it's a lot simpler just to bail out the banks, especially when Hank Paulsen says if you don't, we may have riots and need martial law.

So that $100,000 foreclosure-in-waiting disappears into a giant bailout. It's safe to guess that some of that bailout is going to be used to cover the bad $100,000 loan; it just won't be accounted for that way. Better yet, the bank can even get tax dollars for the failed mortgage and then sell the house at, say, a 50% discount. Then the bank would be ahead $150,000 from where it was before Congress acted.

There are other approaches being discussed, such as the government buying the $100,000 mortgage and then disposing of the house itself at a discount. In which case the bank would be ahead $100,000, the government down $50,000 and the homeowners still on the street.

Either way, what has happened - without a word being said about it - has been a substantial transfer of wealth. In one approach, the government has subsidized the homeowner by $14-24k and in the other case the winner is a bank that will end up $100-150k ahead. Which is cheaper? Which is wiser?

The troubled homeowners lose their house, their down payment and everything they have paid the bank to date. Further, everyone who does business with the family will likely suffer as well. The town in which they live will find their property tax revenues slipping. Social service costs may increase as the family needs assistance of one sort or another.

Meanwhile, if the bank is designated the official victim in this matter, it will either recover its losses (plus all the interest that was paid before the crisis) and may even make a profit out of the deal. Further, the gap between being a banker and being a homeowner has just widened again.

Note finally that if you primarily help the banks, the homeowners have gained nothing, but if you help the homeowners the banks are helped as well.

Multiply our aforementioned troubled homeowners by their several million colleagues in disaster and we're talking about real money and a real transfer of wealth and power.
59% SUPPORT FEDERAL HEALTH INSURANCE
A new CBS-NY Times poll finds that 59% of Americans answer yes to the question: "Should the government in Washington provide national health insurance, or is this something that should be left only to private enterprise?" This parallels a poll last year that found that 64% said the federal government should guarantee health insurance for all Americans. Among those who have otherwise voted no on this issue: President Obama and Congress, who remained beholden to the health insurance industry.
CLINTON'S WELFARE PROGRAM BOMBING IN RECESSION
NY Times - Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.

The trends, based on an analysis of new state data collected by The New York Times, raise questions about how well a revamped welfare system with great state discretion is responding to growing hardships. . .

The deepening recession offers a fresh challenge to the program, which was passed by a Republican Congress and signed by President Bill Clinton in 1996 amid bitter protest and became one of the most closely watched social experiments in modern memory.

The program, which mostly serves single mothers, ended a 60-year-old entitlement to cash aid, replacing it with time limits and work requirements, and giving states latitude to discourage people from joining the welfare rolls. While it was widely praised in the boom years that followed, skeptics warned it would fail the needy when times turned tough. . .

Even some of the program's staunchest defenders are alarmed. "There is ample reason to be concerned here," said Ron Haskins, a former Republican Congressional aide who helped write the 1996 law overhauling the welfare system. "The overall structure is not working the way it was designed to work. We would expect, just on the face it, that when a deep recession happens, people could go back on welfare.". .

Born from Mr. Clinton's pledge to "end welfare as we know it," the new program brought furious protests from people who predicted the poor would suffer. Then millions of people quickly left the rolls, employment rates rose and child poverty plunged.

But the economy of the late 1990s was unusually strong, and even then critics warned that officials placed too much stress on caseload reduction.
STIMULATING LANGUAGE
Yeas & Nays, DC Examiner - You can often judge an issue's importance by how desperately everyone tries to apply metaphors to it. Case in point: yesterday morning's talk shows, which hosted such guests, all ready to discuss the House's passage of the economic stimulus bill.

-"Unfortunately this bill has become a Christmas tree where members are hanging their favorite program on it."- Sen. Susan Collins, R-Maine, on CNN's "State of the Union with John King."

"And there's no pork in this. … But there may be some sacred cows." Sen. Ben Nelson, D-Neb., on "State of the Union."

-"It's like the heart of the body. You can have a lot of muscle, good brains, but if the heart's not working it ain't going to function." - former presidential candidate Steve Forbes on "Meet The Press."

-"Looks like one-and-a-half a mind." -Rep. Barney Frank, D-Mass., on "This Week with George Stephanopoulos" (in response to the host suggesting that the administration "appears to be of two minds").
WERE SPECIFIC REPORTERS TARGETED BY NSA WIRETAPS?
Center for American Progress - Fewer than 24 hours after the end of the Bush presidency, a former analyst at the National Security Agency revealed on MSNBC's "Countdown with Keith Olbermann" that Bush's National Security Agency "monitored all communications" of Americans and that U.S. news organizations and individual journalists were specifically targeted.

Former analyst Russell Tice told Olbermann that, "The National Security Agency had access to all Americans' communications-faxes, phone calls, and their computer communications. And it didn't matter whether you were in Kansas, in the middle of the country, and you never made any foreign communications at all."

Tice went on to explain that, in fact, particular journalists were targeted, just as they were during the bad old days of Watergate. When Olbermann asked if there was "a file somewhere full of every e-mail sent by all the reporters at the New York Times?" or if "there [is] a recording somewhere of every conversation I had with my little nephew in upstate New York? Is it like that?" Tice responded that, indeed, "if it was involved in this specific avenue of collection, it would be everything. Yes. It would be everything."

Within days, New York Times reporter James Risen also appeared on Olbermann and said that he suspects he was a victim of such surveillance: "What I know for a fact is that the Bush administration got my phone records. Whether that was obtained by the FBI or the NSA, my lawyers and I have been trying to investigate that."

Risen and Tice have some history together-in 2005, Risen, along with Eric Lichtblau, wrote an article in The New York Times exposing the Bush administration's warrantless wiretapping program for the first time. Tice was one of their sources. Risen and Lichtblau won Pulitzer Prizes for their reporting - something that Dick Cheney noted during his farewell round of interviews "always aggravated him."

The Bush administration was aggravated as soon as the story was printed and attempted to identify Risen's sources within the federal government. The New York Times reported in April that government officials called before a grand jury were confronted with phone records documenting their calls with Risen. Notably, neither Risen nor The New York Times received a subpoena for those records. This is why Risen believes he was targeted under the surveillance now described by Tice.

So, how did The New York Times cover Tice's revelations that ordinary American citizens, journalists in general, and possibly one of their own reporters in particular, had their communications monitored without a warrant? As far as we can tell, not at all. . .
IRAQ WAR COSTS UPDATE
John Tirman, Nation - The United Nations estimates that there are about 4.5 million displaced Iraqis -- more than half of them refugees -- or about one in every six citizens. Only 5 percent have chosen to return to their homes over the past year, a period of reduced violence. . . . According to Unicef, many provinces report that less than 40 percent of households have access to clean water. More than 40 percent of children in Basra, and more than 70 percent in Baghdad, cannot attend school.

The mortality caused by the war is also high. Several household surveys were conducted between 2004 and 2007. While there are differences among them, the range suggests a congruence of estimates. But none have been conducted for eighteen months, and the two most reliable surveys were completed in mid-2006. The higher of those found 650,000 "excess deaths" (mortality attributable to war); the other yielded 400,000.

The war remained ferocious for twelve to fifteen months after those surveys were finished and then began to subside. Iraq Body Count, a London NGO that uses English-language press reports from Iraq to count civilian deaths, provides a means to update the 2006 estimates. While it is known to be an undercount, because press reports are incomplete and Baghdad-centric, IBC nonetheless provides useful trends, which are striking. Its estimates are nearing 100,000, more than double its June 2006 figure of 45,000. (It does not count nonviolent excess deaths -- from health emergencies, for example -- or insurgent deaths.) If this is an acceptable marker, a plausible estimate of total deaths can be calculated by doubling the totals of the 2006 household surveys, which used a much more reliable and sophisticated method for estimates that draws on long experience in epidemiology. So we have, at present, between 800,000 and 1.3 million "excess deaths" as we approach the six-year anniversary of this war.

posted by TPR | 2:11 PM | 0 Comments
BARACK OBABBLE
Congress is discussing one the most important pieces of legislation in American history, but the president apparently considers concerns over a $825 billion measure just more childish things to be put away.

Washington Times - President Obama Saturday morning called on the Senate to quickly pass his more than $825 billion economic stimulus plan, saying Americans "have little patience" for political bickering and noting that while the bill isn't perfect, it can jumpstart job creation. . . "I will continue working with both parties so that the strongest possible bill gets to my desk. With the stakes so high we simply cannot afford the same old gridlock and partisan posturing in Washington," he said.

posted by TPR | 3:40 PM | 0 Comments

READER COMMENTS

JUDD GREGG

Jesus, I know Jugg Dregg, the pencil-necked dauphin of the NH right wing. He's being hailed as a moderate, but that's not the Juggie I know.
I get the feeling that Obama likes things complicated. Everyone else is confused while he pretends to know what he's doing. Sort of the mirror opposite of W's management style.

This is the same Judd Greg that used to consult on a daily basis with Karl Rove. The senator from the darling state of the Free State movement being nominated for Secretary of Commerce--can the Libertarian business-as-usual crowd get a bigger wet kiss? Change you can count on. In the ethnic environment of my youth we used to called that chump change. And on it continues. . .

CASS SUNSTEIN

Big business is where wealth goes to become super-concentrated into the treasure chests of the few. But big business isn't the problem - the concentration of wealth and power into human hands it enables is the problem. Businesses can safely be big if the great fortunes are not allowed to be captured and kept forever by a few people at the top.

The automatic concentration of wealth and power into few hands can be countered for by sane restriction of private inheritance. The heirs have done nothing to create the wealth, so deceased estates above the first couple million should be inherited by the working public who were underpaid all along.

And I don't mean give the money to the government: I mean give their rightful wages back to the rightful earners.

POST PARTISAN DEPRESSION

Unfortunately Obama's and Washington's "high intelligence" seems to center around fattening their purses in the belief that wealth and power are genuine measures of the man. I wouldn't want to be lost in the woods with the lot of them as appears to be the case. The only real assets they possess are armaments and the immorality to use them. This all reminds me of the old saw that says the only thing wrong with Christianity is that it's never been tried. We could say the same for democracy.

CITIZEN GROUPS TROUBLED BY OBAMA'S MEDICAL RECORDS BILL

If you read your own medical records now and then you will be astounded at how inaccurate they are. You can't evaluate erroneous test results, but notes thast medical personnel write can be wildly off by confusion, inattention and sometimes clearly self-serving to cover up mistakes, second- guess diagnoses, etc. Widely circulated, these errors can become untraceable and cast in stone.

THINKING ABOUT OBAMA

Is it really so startling that those who call themselves progressive are generally as incapable of critical thought as those who label themselves conservative?

That for the overwhelming majority a world view is always the far greater determinant of position than thought, argument or reality testing?

That the greatest determiner of results in polls is usually the methodology and wording of the question, rather than the meaning of the query?

Inductive thought versus deductive logic: wisdom lies in knowing when and how to apply each. Along with reasonability testing and analytic processes.

I guess you're just longing for the good old Bush days.

Sam's studies apparently did not include epistemology. His definitions of inductive and deductive reasoning contrast with treatments of those concepts normally found in philosophy. One big problem with politicians is they do not think deductively, and this is no more clearly evidenced then in the prevailing belief that nuclear deterrence has ever been demonstrated, or is supported by the facts. On the other hand, the character Sherlock Holmes, stresses the importance of deductive reasoning for the detective gathering evidence. He has no idea what to look for unless he comes up with a theoretical explanation that might be tested by the evidence.

Sam does get it right, however, when he notes that theoretical/deductive accounts must always be submitted to tests against new facts. Theories based upon the facts, inductive theories, are not capable of entertaining new facts, and tend to shade over rapidly into dogma. They are not capable of generating testable hypotheses. Only deduction can do that.

RIAA

I wish RIAA would understand that letting people hear music and see programs and movies on the tiny pixeled screen can sell CDs and DVDs.
I have found music and movies I like on YouTube and seeing it there has caused me to buy products from the performers. If those vids weren't available, I never would have seen the artists or bought their CDs, t-shirts or attended their shows. I won't buy music from a performer I'm not familiar with from a written description of their music, and most other people feel the same way. Anyone who doesn't understand that is really confused or worse.

UNDERSTAFFED FBI DIDN'T LOOK INTO FISCAL FRAUD

"Retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control with devastating financial consequences, but made the decision not to give back to the FBI the agents it needed to address the problem. After the terrorist attacks of 2001, about 2,400 agents were reassigned to counterterrorism duties. "

Yeah, but on the plus side, al-Qeda failed to launch a Ponzi scheme to ruin our economy.-- Polar Bear

WAS THE BLAGO IMPEACHMENT FAIR?

As an Illinoisan, not only do I think the impeachment and removal of Rod Blagojevich was fair, but it was two or three years overdue.

In addition to the allegations of criminal behavior, this governor has antagonized the legislature, subverted the separation of powers, spent tax dollars without authorization, changed his demands in the middle of a negotiation in progress, going beyond the pale even by Illinois standards in seeking political gain for every executive decision, and generally having an imperious attitude while lacking stable leadership and basic competence. The state is a disaster after six years of his reign, and the federal charges of corruption are not an isolated incident but are simply the straw that broke the camel's back.

In the end, the Illinois Constitution states only that the state House determine "existence of cause for impeachment" and that the state Senate "do justice according to law" in trying the articles of impeachment. Impeachment is a political action -- a job performance hearing, if you will -- as distinguished from a criminal case with strict rules of evidence and a presumption of innocence until proof of guilt applies. The criteria by which an Illinois official is convicted on impeachment charges are thus determined solely in the consciences of the Senators who hold him in judgment. The outcome of an impeachment proceeding therefore doesn't require criminal behavior as a condition of conviction; the crux of the matter is nothing more than the question whether the official on trial is deemed fit to remain in office.

Not only was this judgment fair, there is evidence that the unanimous conviction of Blagojevich and lifetime ban on him serving in public office has the support of close to 90% of Illinois voters. - JRR

Does your second paragraph apply to our previous President?

Josh Goodman's article merely presented the question of whether having such vague "political" requirements for impeachment is such a good idea. Maybe the impeachment of Rod Blogojevich wasn't the best case to raise the question after, as shown by the 100% vote, but the idea of having some specific requirements for impeachment would not be a bad idea.

Josh Goodman states: "My question. . . is whether it (the 6th Amendment) should apply. There are, in my opinion, lots of good reasons that the 6th Amendment was included in the Constitution. It discourages frivolous prosecutions and helps ensure that the facts come out at trial. If it's a good idea for criminal trials, why isn't it a good idea for impeachment trials? Along the same lines, why shouldn't Illinois specify what constitutes an impeachable offense and what the standard for conviction is, whether it's "beyond a reasonable doubt" or something else?

Unless Blogojevich is convicted of a felony, an impeachment alone shouldn't restrict a person from running for another political office. That's punitive, has nothing to do with impeachment, and sounds like the reason for a future court case. This was not just a no confidence Vote.

DASCHLE TOOK A QUARTER MILLION BUCKS FROM HEALTH INDUSTRY

Maybe it's time to page Dr. Howard Dean for a vetting and possible confirmation as Obama's Secretary of HHS as it looks like Daschle screwed up big time. But then Rahm the Knife would have to eat crow and those Chi-town boyz hate to do that. Since strategically, Dean was right and Emanuel was wrong, the Doc should have a shot but that's not the Chicago way. - Pete

A GREEN PARTY FIRST 100 DAYS

Hell, I can make up what I'd do within 100 days, too. What the Greens don't realise is that their president would have to deal with Congress to achieve their "programs." - JayV

Reparations? Come on. Otherwise fine, but reparations discredit the entire party. That and pushing Ralphie out. Way to lose your momentum guys.

All these things have been supported by Nader who in 2004 spent a lot of time and money defending Green challenges to his ballot inclusion. For myself, I doubt I'll ever trust them again.

ENDS

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