The editorial in today’s New York Times may be a sign that the tide is turning. The elites are starting to break ranks with the mortgage industrial complex.
Gretchen Morgenson reported yesterday that the Obama Administration was pressuring the New York Attorney General Eric Schneiderman to drop his opposition to the so-called 50 state attorney general mortgage settlement. The short form is the banks want a “get out of liability for almost free” card, which is patently absurd. Not only have they caused a colossal economic train wreck, but sadly, they remain such central actors that they need to be involved in remediation. Letting them off cheaply would be tantamount to putting a band-aid on gangrene.
As much as having Morgenson reveal this heavy-handed effort to undermine an investigation in progress was important, Morgenson is an outlier at the Times. She is the only writer in the business section who routinely exposes bad conduct in the corporate and financial arena. Too many of the other writers there engage in stenography, punctuated by random acts journalism. In fact, I’ve thought the only reason the Times keeps her is her Pulitzer prizes make it impossible for them to get rid of her.
As much as Morgenson’s expose was key, the editorial page of the New York Times throwing its weight behind Schneiderman gives him real political cover. From “It’s a Flawed Settlement”:
The Obama administration has turned up the heat on Eric Schneiderman, New York’s attorney general, to go along with a proposed settlement with the nation’s largest banks over dubious foreclosure practices. Mr. Schneiderman should stand his ground in not supporting the deal. The administration says that a settlement would quickly deliver much needed relief to hard-pressed borrowers, but it’s doubtful it would provide redress on a par with the banks’ wrongdoing or borrowers’ needs….
Mr. Schneiderman, who became the attorney general of New York after the scandal broke, has rightly refused to go along with a settlement that is not based on a thorough investigation, and has ordered investigations of his own. He has been supported by a handful of other state prosecutors, who say that the proposed deal would restrict their own investigations and prosecutions.
I do quibble with one part of the op-ed:
Shaun Donovan, the secretary of Housing and Urban Development, however, says that a settlement on the narrow issue of robo-signing would not preclude other investigations by individual attorneys general. But, clearly, once the robo-signing issue is off the table, investigators would lose leverage to pursue remedies for other possible illegalities in the packaging, marketing and transferring of mortgage securities.
This isn’t correct. Robosigning isn’t worth a lot liability-wise nor does it give much (any) leverage into other theories of action. The real issue is much simpler. The banks are not going to agree to a deal that includes only robosigning. The only reason for them to come to the table and pay any kind of damages is to get a broader release. We’ve said so from the get-go. And the Administration has spent so many cycles on the settlement that it perceives that it has its credibility at stake on getting a deal, no matter how bank friendly it is. (Actually, bank friendly is the point, it just can’t be blatantly bank friendly).
Back to the editorial:
The administration also says that the proposed settlement would require the banks to write down the principal balance on underwater loans. According to news reports, the banks are likely to pay around $20 billion in the deal. With 14.6 million homeowners owing $753 billion more on their mortgages than their homes are worth, how far does the administration think $20 billion would go?
The administration should pursue principal reductions for stressed borrowers, and it could do so immediately by calling on Fannie Mae and Freddie Mac to refinance the underwater loans of borrowers who are current in their payments. What it shouldn’t do is pretend that the proposed settlement is the only — or best — way to get quick relief to homeowners.
It is also significant that the Times is pushing principal modifications. Mind you, meaningful principal mods will take place over Timothy Geithner’s dead body. But that isn’t impossible. Geithner has said he wanted out but then had to reverse himself when Mr. Market got nervous that their favorite sugar daddy might not be there if financial hell broke loose any time soon (likely).
And if the economy really stinks next year (certain), the Administration might try a more ambitious mortgage mod program as a pre-election Hail Mary pass. The only way I can seem them reversing themselves is out of desperation, and the odds of them becoming desperate are pretty high.
As much as this is a very positive step, I hope readers will not take this for granted. In comments, not only did quite a few call or write Schneiderman to show support, but some of you also took it upon yourselves to express your disapproval to the two parties that Morgenson had identified as putting the screws on the attorney general: Donovan and a member of the New York Fed’s board, Kathryn Wylde.
I hope those of you who haven’t yet taken action will either give an “atta boy” to Schneiderman, or better yet, call or e-mail Donovan and/or Wylde and voice your disapproval.
Schneiderman: 800 771-7755 or 212 416-8050 or http://www.ag.ny.gov/online_forms/email_ag.jsp (the form is much more user friendly than most of this sort)
Shaun Donovan: Secretary.Donovan@hud.gov
Kathryn Wylde: no direct number, the “media outreach” (which shows what their priorities are) is (212) 493-7511. The main number for the Partnership for New York City (guess only the top 1% are “partners”) is 212-493-7400.
Barry Ritholtz has called for her resignation from the New York Fed (as a class C director, she purports to represent the public, when it’s clear she represents only the corporate funders of her not for profit). Call her office and say the New York Times editorial proves she is not standing up for what is best for the city and the country. Demand that she resign from the New York Fed.
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Geez, Louise, Yves. That editorial sounds like you wrote it.
Great stuff, it is just amazing how corrupt the system has become.
I am concerned we are going to have the desperate administration just go ahead and give the banks a free pass because they seem to think that is the only way to get the economy going, of course due to their distance from reality. We are geting near max age of capitalsm and I would say we are no longer living in a remotely free economy. The stock market is under control of HFT and large institutions and they are squeezing out anyone who is not part of the elite. A free market would give reasonable opportunity to individuals to compete on the open market IE as in stock and options trading and that is being taken away ironically by the LACK of regulation, reversing uptick law and having to put circuit breakers to save the wealthy. The big funds didn’t get screwed in the first flash crash because the whined enough and got their trades reversed that cost them millions. The little guy that had his stock knocked out by hitting stop orders and not being able to buy back in quickly enough the margin calls that were made cost the little guy. They couldn’t get their trades reversed. the middle class is getting screwed at both ends.
I am concerned we are going to have the desperate administration just go ahead and give the banks a free pass because they seem to think that is the only way to get the economy going
That’s what the Administration is chomping at the bit to do. Problem is, they don’t have jursidiction. they can pressure behind the scenes, but The FedGov has no say in what 50 separate State AGs do.
Congress on the other hand could pass some sort of retroactive law making everything that was illegal, legal… but it would be dicey and I’d guess contentious.
as Yves said long ago: there is no easy way out of this. If there was it would already have been done.
Incidently, that’s not an op-ed, it’s an editorial by the NYT itself.
Whoops, that’s implicit in the headline and I have that in the entire piece save the opening sentence! Ouch.
Thanks Yves. I called yesterday’s Schneiderman number and received a very pleasant welcome for my support.
I will happily do all of the above later today. Emails, etc.
Remember the ownership society? Implication -get wildly in debt, we’ll send a hustler around to visit you and convince you $750,000 is nothin.’ Just trust him/her; they work for ‘us.’ And then you will be a homeowner. (‘proud’ homeowner implied).
no longer homeowners, they’re borrowers -next, they’ll be ‘debtors.’
from the article: “… but it’s doubtful it would provide redress on a par with the banks’ wrongdoing or borrower’s needs….”
It’s home owners who are at issue (yes, I know, there are speculators involved -but that’s like the air we breathe). Since a large segment of the entire population are home owners, this affects all of them, their ability to buy and their mobility -the ability to move with the necessity to buy and sell a home.
Mortgage holders were, under the law, a different category of ‘borrower.’
It’s worth noting because this kind of word ‘tweeking’ is a favorite technique of the propaganda machine in the war of words against the American population -aimed straight at brain functioning against communication. Its a non partisan war against the people with the full 100% cooperation of MSM; lead by the NY Times.
Probably there was a time when the NY Times took its clues for proper word usage from scholars; obviously, that changed a long time ago to getting their marching orders on word usage from corporate banking government propagandists. Where’s our US czar in the War on Words? Who is he? she?
scroll down to ‘list of U.S. executive branch czars’: Wikihere
Yeah, where is George Orwell when you need him?
I tried yesterday on numerous occasions to talk to someone at Schneiderman’s office and never got through to a person, although sometimes I got voicemail.
The email form worked nicely, although I worry they pay more attention to calls than emails.
Nice to see the Times on the right side of this
Emailed support this morning. We’ll see how long his office can hold out.
Maybe another option instead of(or in addition to) a mortgage cram-down would be allow people with a foreclosure on their credit report to have access to borrowing again from Fannie and Freddie?
I have a foreclosure and would certainly like to get a low interest loan, but apparently I’m shut out for 3 or more years. That’s even with a 50% down payment!
Or course with the new deal from Fannie and Freddie that allows vulture funds to buy up houses in bulk, I’m sure it is not politically popular to keep people in their houses any more. Better to let the whole mess collapse even further and make everybody renters….
Kathryn Wilde has it all wrong. New York needs to reestablish itself as the center of honest and quality investment products by strong regulation under the Martin Act and of insurance products and companies by the Insurance Department.
That would be the best thing for the economy of New York City long-term.
One of the things that’s stuck me amongst all the bankster’s whining about how “regulation will decrease Wall Street’s competitiveness” is that banking relies fundamentally on confidence and this, in turn, relies on a level of trust both in the institutions themselves and in those charged with keeping them on (or close to) the straight and narrow.
Now we know from the last 4 (10 ? 20?) years that that trust has been shattered and the belief in any kind of law has been corrupted into a corrosive cynicism.
So … if we assume that any kind of economy needs some kind of banking system then those that recover first will be those that succeed in rebuilding this trust first (*). Perhaps this is what Schneiderman has realised and is, in fact, the Street’s best hope, although the current crop of financial con-merchants wouldn’t ever in 10**100 years go so far as admitting it … even if they realised what his game is.
Of course in the case of the Wall Street/DC/Corporate nexus this rot may have gone too deep for too long to stand any chance of recovery.
(*) As far as I can tell there are only three places where this particular penny has dropped: The Swiss national bank and the associated regulators, some parts of the the Bank of England (Andrew Haldane comes to mind) and the FSA, and finally Iceland. I’m leaving out the Scandinavians since their corruption and recovery cycle was a long time ago although maybe this “recovery of trust” was a motivation for the actions they took back in the early-mid 90’s
There’s that dreaded word again – long-term. You know that term is not in vogue right now, don’t you ?
I’m thinking every call and email of support Schneiderman gets is also a vote Obama loses.
Until he reigns in Donovan and personally asks Wylde to resign.
Clearly, we should all be encouraging our state AGs to resist the free pass for the banks. Schneiderman may have the most clout here because he’s in New York where most of the banks are, but if other AGs start hearing from us, maybe we can encourage more of them to get out.
I have said before and will say it again. It is time to get rid of the restriction on impairment of home loans in bankruptcy.
Yes, exactly. Time for a legal reinterpretation in favor of homeowners.
The “writedown underwater mortgages” thing is NOT a win for homeowners, just an acceleration of losses banks have to take anyway. They are sitting on a pile of mis-marked stuff, and this provision is probably going to give them a get out of jail free card on it. Once that’s done, the banks are all healed up. And we paid for it.
They never talk about writing down all mortgages, just the ones where the homeowner is sitting on an in-the-money put (walkaway) option that he hasn’t exercised yet. It’s writing down the other mortgages that would really help homeowners.
So as usual the issues are “framed”. A writedown of underwater mortgages would be structured to help banks, and it would provide a slight general support to the market prices by stopping walkaways — although those who haven’t walked away yet, having been underwater for a while now already, are probably less likely to do so (a form of “seasoning”). But it’s the sort of writedown that is the least helpful to homeowners who still can be helped, because they still have some equity.
The idea of writedowns are sickening to those homeowners who are not only still paying, but paid large down payments and because of acting responsibly in doing so, would not be considered “underwater.” How about giving back to these homeowners their down payment plus the difference in what the house is worth now and the value the inflated appraisal showed at closing?
How about giving back to these homeowners their down payment plus the difference in what the house is worth now and the value the inflated appraisal showed at closing? October Sky
The entire population should be bailed out, not just homeowners since the banking system has cheated everyone including (ironically) the banks themselves.
Exactly, F. Beard.
However, I was just talking about the housing writedowns some often mention.
I think we all are going to be bailed out, but not as we would want. We’ll be bailed out of life as we have known it. This system is going down and it’s unlikely that anyone really knows how we will get through it.
Making payments on time, making a big fat down payment, etc, does NOT mean you are not underwater. If you are paying more for your home, regardless of your credit rating, than it is worth then you are underwater and are, in fact, foolish to continue throwing money away. All you are doing is making a bankster richer.
When the people originating the loans are crooked to the core, there is no such thing as a “responsible” mortgage owner (you are NOT a “homeowner” until you own the title). Since the mortgage originators are fraudsters and corrupt, there is no obligation, moral or otherwise, to pay them back. They belong in jail, penniless. Their families destitute for their greed and self-worship.
Shaun Donovan
Secretary Housing and Urban Development
(202) 708-0417
http://portal.hud.gov/hudportal/HUD?src=/contact/principal_directory
Be sure to also commend Mr. Schneiderman on suing gas companies for inflating projected Marcellus gas reserves and for suing the DRBC (Delaware River Basin Commission) to prevent it from issuing drilling regulations before a comprehensive environmental review is completed by the EPA. I hope he will continue in the people’s interest when he is elected governor.
My concern is that it all might not matter. If we fine them $20 billion and then effectively give them $20 billion through a Fed maneuver so that they can afford to pay it back to us, what’s the point?
Yes we’re all so used to that sort of thing now, it’s reasonable to assume this is yet another.
Just say no. Maybe some other state AGs will grow a backbone and help.
Anyone got an e-mail on the “Wylde bitch” (pun not intended)? I blasted Donovan yesterday and praised Schneiderman, but would LOVE to unload on Wylde.
I sen Schneiderman a $100 contribution yesterday and emailed his campaign staff to please let him know that I was motivated by his stance regarding the settlement. This is what politicians pay attention to more than anything.
Wylde’s remarks were, not surprisingly, echoed
by another Wall Street toady who was formerly
(supposedly) a Democratic congressman.
Harold Ford, Jr. said, on Meet the Press, that
“Wall Street and Main Street are the same.” Of
course, we should expect Ford, who’s become a
Wall Street whore, to say something like this;
after all, a million dollar token job on the
Street will buy a lot of loyalty, but it does
show how low some (supposed) Democrats have
sunk.
Good to see some success for the great effort of decent people covering the US mortgage foreclosure mess, with Yves standing in the forefront.
As serious numbers – “14.6 million homeowners owing $753 billion more on their mortgages than their homes are worth” – are mentioned: do MMT economists or informed readers here have some back-of-the-envelop calculations how ‘meaningful’ principal mods for defaulted loans would impact the housing market, as well as balance sheets of banks and/or GSEs?
Would such mods even increase aggregate demand, and how much so? And how many families could keep their home? This reader also wonders if an end of TBTF has to be a precondition.
Thanks for pointing out this NYT editorial. Looks like maybe a chink in the armor of the Banksters.
What I’d like to see is a settlement plan that makes homeowners (like me) who were fraudulently foreclosed upon made whole..and remediation for those still in their homes and seriously underwater.
The Banksters (with help from this admin) have vilified the homeowner/borrowers since this crisis began, and now the worm needs to turn back to bite them in the arse!
The U.S. economy will never recover until we address the fraud and corruption perpetrated by Wall St. & the Banksters which caused the wheels to come off our economic bus.
Now let’s see. Where would we expect the Obama administration to side with on an issue like this? Well, consider who he brought in a few months ago as his new Chief of Staff. The senior executive in charge of lobbying at the crooked JPMorgan Chase!
Consider also that the little seen FDIC HAMP Guideline, on page 3, in fairly cryptic language, mandates that homeowners with substantial equity be categorically excluded from modifications because the investors in the mortgage backed securities can realize a better cash flow by foreclosing and tapping the homeowner’s equity. Based on the December’s 2010 COP report’s review of the Homeowners Loan Corporation (HOLC) of the 1930’s, homeowners with equity were the least likely to re-default after loan modifications, as one would intuitively expect. Nevertheless HAMP excludes them. HAMP is meant to help mortgage investors, not homeowners. How else can you explain the exclusion of homeowners with equity…typically older homeowners who have paid into their mortgage for years, or taken out smaller loans relative to property values.
To make matters worse, both HAMP and banks loan modification pre-qualifications pages on their respective web sites never ask about equity, effectively luring these homeowners into trial modifications that are doomed from the start, to fail, while the servicing banks make a great profit servicing delinquent loans, and “dual-pathing” these unwitting homeowners to foreclosure.
I’m still fighting for a modification under the courts supervision so Chase can’t cheat as easily… while Deutsche sues Chase looking to put my mortgage back for false reps, and warrantees, grossly substandard underwriting, etc, with their evidence coming directly from US Senate testimony of WAMU (now Chase). The new HAMP CHECKMYNPV site, which does ask that yo input the homes value, says I qualify by a large margin. (I still qualify even if I vary the income and housing value figures substantially.) Yet I doubt I’ll be approved because I still have equity. If I am denied a modification I will sell my home and move to China, where my retirement accounts will allow me to survive with a vastly lower cost of living… and I will forever be disillusioned about America. At least in China I will have no false expectations of a government for the people, by the people.
While there’s much talk about jobs, I believe the housing crisis is equally, if not more important to economic recovery. Even with a well paying job it makes no sense to keep a home that is underwater. President Obama’s failure to save homeowners, as the government did directly in the 1930’s, and his failure to hold the banks accountable for fraud, will be his unfortunate legacy.
Why hold back? This isn’t just another President we all regret around the office cooler, this is a new chapter in how crappy life is going to become for people, and already is for many more. But it’s all out of sight, out of mind, like Haiti. The press understands their mission more than anything, it’s all about perception. Most of the Machine assures us that the evil Libyan is getting evicted in the name of freedom, and that Banks and Shit Street just drank a little too heavily last decade, but don’t you worry, just keep doin’ what you doin’. We’ll refinance, you can trust us, come on, it’s safe.
Thank you for this well-put insight.
Yes, I tried for HAMP, with equity. No go. But through shear agony of determination, was able to get an in-house loan mod out of it.
It was the worst business experience in my life. And if time is considered, the worst financial decision, too.
More proof for your point: the process was intentionally delayed (I do have documentation of this fact, including that all NACA application were put on hold by Bank of America, stated in writing by a Bank of America rep).
Here’s the kicker. The NPV test (Net Present Value) test you refer to, which disqualifies homeowners with equity, is not only concealed, it was not run or at least the results were not given, until the _end_ of the process.
So the process was: demand documents from the homeowner. Promise a decision. Do not deliver the decision. Demand more documents and updates. If the homeowner fails to deliver documents at any point, they are disqualified and the entire amount due under the program could escalate, with penalties. This could strip the equity in the house through foreclosure.
In addition, the homeowner’s credit is ruined by even starting the program, making any other solution impossible.
A sane plan that was not about equity stripping could have still favored the lender, but would have run the NPV _first_, so the homeowner would know their status, before their credit was ruined and they accrued vast fees and late payments.
No, I think there is no other intreptation, but that HAMP was designed in part to strip homeowner equity.
Good point about the banks’ hopes that the homeowner will eventually fail to provide some required document.
In my case, after a 5 month in-house Chase trial modification, timely payments, and accurate timely paperwork, they rejected me. Then, 3 days LATER they sent a letter threatening to drop my loan Mod. request because I failed to provide the required paperwork. It went on to state, SPECIFICALLY, that I failed to provide my DEATH CERTIFICATE and proof of social security death benefits! I’m not kidding. I have it in writing! Now it does feel like I’m in Chase hell, but my doctor assured me that I am still alive. It would be funny if it wasn’t indicative of all my dealings with Chase. What’s their new slogan, “CHASE, THE WAY FORWARD?” Wow, I don’t think I want to go forward!
OK the bank is dishonest. This isn’t really such a surprise. But what is surprising and truly disheartening is that they have the support of our government.
The Trial.
I think the only real way out of the mess with home loans is to let EVERYONE(bank, borrowers and other) take their losses. If you agreed to pay more than you could handle, you lose. If a bank loaned more on a house than it will be worth today you foreclose and sell it for whatever you can get, you lose.
There is no way for everyone to win in this deal!
Idiot. You see any Banks other then BOA having a tough go of it?
Good point. After we are done prosecuting, and arresting Bank management for intentionally stealing from the Country, we go after the despicable realtors, the scum brokers, the flippers, the profiteers, the corporate attorneys, the rentiers and ship them off to the new “Libertarian Islands” where they can live their ‘Murican dream far away from any possibility of inflicting more damage. Gotta be safe!
But, but, but…
BOA is a Bank Holding Company, holding many banks themselves… Presumably, they are ALL in trouble…?
1. It can’t be emphasized enough how fortunate and privileged we are to have your Yves persona giving cry to so much of the corruption going on and perspectives about the workings of the economies.
2. Yves – don’t know if some observation on this aspect is anything you would wish to comment on. But it strikes me that this issue with Bank of America can be regarded as a really significant if not crucially pivotal battle for the soul of the United States – I hope that’s not too dramatic. If Obama’s forces as the arm of the financials succeeds in defeating the few remaining brave voices on this BofA issue in what is a venal and unconstitutional infringement into states’ affairs, I can’t see how the undeclared but de facto war for the control of the country by the plutocracy and oligarchies will be all but over. On a federal level, the war is already completely lost. The financials are now stunningly, crystally, starkly, and blatantly completely above and exempt from federal law and the entire federal administration. All that remains are the few states’ attorneys and one can hope and pray enough of the states’ courts that can form one last battle line. Whether that can be enough is highly problematic but it seems that it is our only hope.
3. One of the ‘interesting’ aspects of the BofA desperation attempts in this particular case is that the big investor names seem to acceding to a settlement by BofA. I wonder if you have any links or comments about why this may be. My own supposition, based in no small part on references here and there in posts of yours, leads me to believe that the big financials like BofA have been allowed to completely substitute and rearrange which initial loan instruments are included in the various tranches and even in the compositions of the various trust amalgamations. That would then lead to a speculation that the bigger investors have been given assurances behind closed doors (and undoubtedly in gross corrupt illegality) that they will be given the entirety of whatever more sound initial loan instruments there may be while the smaller investors will be left with completely worthless assets, perhaps even within a given tranch. Further speculation would be that this is especially to the advantage of the bigger investment operations since if the end game were to be a dissolution of these trusts, the proceeds would be more evenly divided than what would take place with a ‘settlement’ corruptly manipulated by the big financials. Certainly the lower tranches are worthless in any case by construction of the trust tranches. So maybe my speculation has no substance. But there must be some reason(s) that the bigger investors are lining up.
Late news
New York Removed From State Group Working on Foreclosure Deal
http://www.businessweek.com/news/2011-08-23/new-york-removed-from-state-group-working-on-foreclosure-deal.html
“Aug. 23 (Bloomberg) — The New York Attorney General’s office was removed from a group [the executive committee of state attorneys general] that is working on a nationwide foreclosure settlement with U.S. banks, according to a state official.”
I sent an encouraging e-mail to Schneiderman’s office yesterday, and a nasty e-mail to Shaun Donovan today. I also noted this, via Bloomberg,
“Fed Chairman Ben Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages.”
Sigh.
That’s from Bloomberg, at work spreading the propoganda.
The TBTF Banks should have failed, every gdman one of them. As other highly regarded economists have noted, we would have been better off. The bailouts and associated cum shots from the FED should make any one’s blood boil. Tell us about moral hazard you fu$#%ng crooks?! How many Billions have we shoved into Fannie Mae’s a$$ so they can take care of their “business”? etc
I wonder why Bloomberg uses a low figure. The boys gave themselves $16 trillion. Some of it came out this summer with Sander’s GAO audit push. Why would Bloomberg flat out fucking lie?
NY AG having a wet dream about $20B…..but wants more. His politically driven motives will implode in his face and be litigated well beyond his brief term as AG. NY is an odd state where its AGs continually attack the state’s largest employers ~ imagine someone like NV constantly harassing Steve Wynn, Shelden, and Kirk. Current ny AG following in spitzers footsteps. Some never learn. Treasury has made a killing on ‘public money’ invested in the larger financials but the shorts don’t like to cite that as it blows a gaping hole in their arguments. In the end, selfish and power hungry cops walking around with a hard on for the banks will come back to haunt them.
Ohhh, we’re so scared of gangsters. Tell us more about New Jack’s largest employers.
Mr. Schneiderman,
Thank you for continuing to remain firm
in your principled commitment to seek a
fair settlement with financial
institutions, and for resisting calls to
grant blanket immunity for fraud and
other malfeasance by their executives.
Your efforts are greatly appreciated,
and there are many more like me who
respect your commitment to the
application of the rule of law to all.
If I may humbly suggest with tongue in
cheek, some sauce for the gander:
perhaps offers of limited immunity might
be considered appropriate only for
“distressed” banking executives. Say,
those facing more than 25% of their
remaining lifespan behind bars under
mandatory minimum sentencing guidelines.
Sincerely,
I usually don’t bother proposing “solutions” within the context of the system of privilege, greed and corruption that passes for economic democracy in our dying imperial nation.Until the sh– storm that is on the horizon does its work and the banksters and warlords that rule are toppled from their thrones any reformist ideas are mere intellectual gymnastics. Usually the best I can muster is an attempt at gallows humor from the point of view of one of the exterminated nations.
However sometimes I can’t resit a what-if thought experiment.
1-Since the majority of residences in the USA are not owned by the people living in them and paying (or not paying) the mortgages, but rather by banksters and their corporate shell games:
2- And since the banks and hedge funds that hold fraudulent liens on those mortgages (those they haven’t been able to offload onto Fannie & Freddie)are functionally insolvent:
3- And since an abandoned and foreclosed home is soon stripped of anything that can be sold or bartered away and becomes useless as a residence:
4- And since under the present system of ownership as many as half the population would be evicted from their homes and left with no choice but to join the mobs on the street armed with AK-47’s in the event of a real economic collapse:
It is time to start over again with the way we put a roof over our heads.
As Dimitri Orlov points out in his book, “Reinventing Collapse” the key difference between the relatively painless way that citizens of the Soviet Union (and Cuba as well) were able to survive the economic collapse of their societies vs. the US is due to the fact that they DID NOT OWN their own homes. Paradoxically, because the state owned the homes and apartment blocks (however basic they might be) when the state collapsed the residents simply stayed in their homes with little increase in homelessness. Where private property is sacrosanct, capitialists believe in the power of the bulldozer rather than a right to shelter and food to stave off starvation.
In the US we have a long tradition of Homesteading, used as a way to perform ethnic cleansing with my people as the cleansed, while opening up opportunities for the newly landed farmer class. It’s time to revive and modernize that proven system. Here is how it could solve the property/housing/debt slavery problem that is one of the trigger points of our national collapse.
First we’d have to make a few um-changes.
1- Exterminate/bankrupt/nationalize/break up all the too-big-to-fail private banks. Simply requiring them to use mark-to-market accounting would take care of most of them.
2- Establish a publicly owned State Central Bank in each state. Prohibit any former senior officer of JP Morgan/Goldman/BOA etc. from coming closer than 100 yards to the Peoples’ Bank and require them to wear orange jump suits whenever they appear in public.
3- Transfer ownership of all mortgaged property in each state to the state bank. Administer state employee salaries and savings accounts through the state bank, giving it a substantial initial depositor base. Limit privately owned community banks to a single local branch, and prohibit all other private banking. A study of the North Dakota experience would be a good starting point.
4-Grant every homowner who owns a modest home free and clear and lived in for at least 10 years a lifetime exclusion from property taxes.
5-Rewrite mortgages on all property under lien to reflect a not-for-profit loan rate, only covering expenses from the state bank and the local lender.
6-Offer all previously bank owned and foreclosed properties for homesteading on a first come basis, only one per family, retaining the old tradition of requiring the homesteader to prove up on the property by improving it, along with penalties for letting it deteroriate.
7- Institute a highly progressive property tax system based upon size. One dollar per year for 1,000 sq. ft., $100,000 per year for 10,000 sq. ft. ,and $10,000,000 per year for those trying to emulate The Donald seems about right.
Gotta say, I like your style.
Especially the part about the orange jump suits. It would be nice to have the visual aid, as to who can, and CAN’T, be trusted when they open their mouths or sign papers.
And having the states run their OWN banks, FREE from private control, is an idea that has been ignored for far too long. Modern Banks are death on that idea; it’s a mystery, how the State Bank in North Dakota has survived this long…
I hope this truly is a crack in the establishment, but the late breaking news that Schneiderman is off the team doesn’t bode well, or perhaps it means they are feeling the heat
Weasels are embarrassed when the name Geithner comes up.
Oh, c’mon, that’s part of a politician’s “acclimatization” to DC; that thing about losing one’s own perspective and replacing it with the words of the Lobbyists who call you 24/7 to share their “good” ideas (and money, of course) with you.
I’m sure that Geihtner (sp?) now thinks of his departed spiritual independence not as “weaseling,” but as “adapting to reality.”
The New York Times? Among the most marxist/socialist extremist anti-American pieces of trash on the planet. All would do well to take the opposite view of this unfortunate entity.
The corrupt NY AG being escorted out of the room this week confirms that he is a cancer on not only the mortgage-related committee but also on anything representing America. His intent to undermine and debase his peers over these past few weeks was a very ugly display of arrogance and attempted commandeering. The public statement made by the Iowa AGs office was meant to highlight the reckless and selfish actions of this Jerk from NY. foolish Jerk from NY. I feel sorry for NY that you have another elliott spitzer in that seat.
So where do you get such tripe? I’m betting “your” line is what’s going for wisdom on FAUX “News.”
Which is a perfect illustration, of that propaganda organ’s corrosive influence on the spiritual and mental life of this country.
Keep on watching it, if you don’t care what you let into your brain. I assure you, we know better; and we will no longer listen to anything you say.