First let me just say that I am not really picking on Rep. Boehner so much individually, as I am picking on both him and his GOP cohorts, collectively. That is to say that President Obama will be re-elected to a second term in 2012 because… well, because he’ll be running unopposed… essentially.

If you’re someone generally predisposed to vote for the GOP’s candidate, or if you’re just someone who feels major disappointment over what has transpired during Obama’s first term and is therefore ready to jump ship in ‘12, do you not see that as being the case?  If not, I would only suggest it’s a case of willful blindness.

Obama will win because the guys on the right side of the aisle are no longer a “political party,” in fact, they’re barely an “informal get together.”  The GOP has degenerated into a divided-you-fall group of confused ideologues, unsure of the difference between right and politically expedience.  In plainer terms, you guys on the right are a mess… an embarrassing mess.

Anyone who reads me regularly knows that I have been no fan of the Democrats or the Obama Administration’s attitude, acts or attempts at solving our nation’s significant economic issues.  As administrations go, Obama’s has been anything but transparent, and that alone is offensive enough, but his decision to flat out ignore the housing and mortgage crisis has placed this country in real economic danger going forward, and that is, in my mind unforgivable.

And yet, here I sit, prepared to ignore the upcoming political season, at least as far as the contest for president is concerned, because there’s nothing to be gained one way or the other by attending to it.  Unless Obama is caught on video wearing his own “blue dress,” he’s our prez for another four.

The Debt Ceiling Debacle…

Watching the debate over the debt ceiling was emblematic of the situation we face.  The whole thing was maddening, there’s no question about that, theater… yes… but beyond that… well, it was stupid.  I mean, if Goldman Sachs and Bank of America were “too big to fail” in ’08, then why wouldn’t the United States in its entirety fall under the same sort of policy in 2011?  Our banks are too big to be allowed to fail, but our nation’s treasury… nah, let it default?

Oh, come on… just stop it right now.

Speaker Boehner, telling Congress and the American people that he had worked his way into the top spot in the House in order to do more than just go to fancy meals and play golf, leapt into action.  I don’t know what it looked like to you, but to me it appeared that he contacted the White House and asked for a tee time.  Next thing I knew, Mr. Speaker and the Prez were out on the links hammering out a bi-partisan save-the-world type of deal.

And they did… for a few hours, anyway.  According to Carl Hulse writing for The New York Times in July, the deal they fleetingly struck was “transformational,” and I think it’s safe to say that right about now, “transformational” would be a good thing.  Obama and Boehner’s compromise would have cut our government’s spending by up to $4 trillion over the next 10 years, made significant changes to the tax code, and taken steps toward the shoring up of Medicare and Social Security.

Of course, that “bi-partisan compromise” came apart at the seams one Saturday night when Speaker Boehner, citing the White House’s insistence on tax increases, walked away from the deal.  Listening to him explain why he was backing out, I could have sworn that I heard beeping in the background.  Clearly, the Republicans in the House are never going to be okay with allowing the Bush tax cuts to expire, and it doesn’t matter what that means to the nation in other areas.

The tax cuts I’m referring to should be seen as a relatively minor issue… allowing the top bracket to return to paying roughly 39% instead of 35%, as they did during the Clinton administration would hardly signal the end of the world as we know it… and there’s no question as to whether the rich, and by “rich” I do mean the top 1 percent… have disproportionately benefited from their largesse.  But, to the GOP’s leaders, allowing the Bush tax cuts to expire would drive a stake through the heart of the economic recovery that’s not occurring by not allowing them to expire.

If the whole thing makes no sense to you, that’s only because it makes no sense… period.

The GOP likes to refer to those that benefit most from the tax cuts as “job creators,” which when you look at the unemployment numbers over the last four years plus, is just laughable.  But yet, Speaker Boehner was quite clearly told over that weekend by others in his “party” that he would not be supported as long as the Bush tax cuts were expendable.

Clearly… and incredibly… the GOP would rather see anything else get cut, including Medicare.  And on the other side of the aisle, the Democrats would rather see the tax cuts expire than anything else.  It’s very much as if the unstoppable force has met the immovable object… and we… you and I… are paying the price as our nation continues to circle the drain in a race to the bottom.

Republicans viewed Speaker Boehner’s ideas as a harbinger for political disaster. First and foremost, they saw the deal as having the potential to hand the Democrats what could be seen as a major victory by extending the Bush tax cuts ONLY for the middle class.  That horrific reality, they believe, would end up costing House Republicans the majority in 2012 by throwing out the tax breaks for the wealthiest Americans.  And to that I can only say, shut up, shut up, shut up.

Look, I’ve been an “employer” for some 20 years, and I’d just like to assure everyone that breaking the collective back of our nation’s middle class is precisely what is stopping America’s employers from spending the massive amounts of cash in their coffers on plans to expand and grow.  I don’t care what you do about corporate taxes, Best Buy isn’t expanding until America’s middle class can afford to shop there again.  Capisce?

Speaker Boehner must know this to be the case as well, after all, it’s not exactly a sophisticated concept, but his party’s unity on this and other issues is akin to shattered crystal being held together with superglue.  The Republicans, if there even is such a thing as “the Republicans,” and I would argue there is not, have made it clear that they will do anything to maintain the status quo for big business, too-big-to-fail bankers and the wealthiest Americans.  Now there’s a platform I’m sure will do very well in 2012… not.

What we should all have learned from watching the debt ceiling debates and our House Speaker run from a deal of his own making, is that we need politicians willing to take political chances, and in that regard we are woefully lacking.  Mr. Boehner is but one example of where we’re coming up short, but if we the people don’t start speaking out soon, demanding that decisions be made in our country’s interest and not to appease the banking class, the price we will be forced to pay is sure to exceed our available balance.

And so I give you this month’s rear… House Speaker John Boehner… and our next President of the United States, Barack Obama.  Now, I should say that my good friend Max Gardner disagrees with my forecast for the 2012 Presidential Election… he says Obama can’t… or at least may not… win.

Max is one of the smartest people I know and he’s no stranger to politics in this country, so when he talks… I listen.  But, given the options I see today, I’m still going to vote for Obama in 2012… unless it’s raining… or something good is on TV… or my sock drawer looks like it needs to be rearranged.

The thing is… Max may just be right.

Although I don’t think I could prove what I’m about to say… one of the reasons Obama won in 2008 was that people believed that he would help save people from losing their homes to foreclosure.  It’s not an issue that polls well, however, so I’m not sure if I could find actual data to support that statement, but I’m sure I’m right.

Fast forward to the mid-terms in 2010… the Democrats got their walking papers because of their mis-handling of the foreclosure crisis.  Again, not an issue that polls well, but again I’m right.

Now let’s look at 2012… Florida, Arizona, Nevada, Ohio, and Michigan… all considered “swing states” and all hotbeds of the foreclosure crisis.  Obama can’t win without these swing states… period.  Those five states alone deliver 80 of the 270 electoral votes needed to win the presidency.

And a lot of people in these states that voted for Obama in 2008… well, they HATE him today.  And yes, I do mean HATE him.  Like, with the white hot intensity of a thousand suns… get the picture.

You see, Mandelman Matters is my own private focus group.  I hear from so many homeowners from all across the country daily and over time I can take the pulse of a very large segment of voters.  That’s why, in 2009 when I told a D.C. lobbyist that the Dems were going to get killed in the mid-terms and she didn’t believe me… well, I was right.  So, even though I still believe that most folks won’t vote for the alternative no matter what, it’s starting to look possible that the distressed homeowner voting block, if there is such a thing, could sway the race.

The truth is, I think the GOP will be crushed if Max is right and Obama loses.  The Republicans, if they’re thinking at all clearly, would have to be insane to want to win the presidency this time around.  The House, they’ve already got… the Senate… well, they’d love to win that for sure.  But the presidency?  They’d have to be insane to want that brass ring this time around.  Nope… Obama is perfect for the Republicans right where he is… he can’t get anything done… he loves Wall Street almost like Shelby loves Wall Street… and they get to blame everything that goes badly… on him.  It’s really quite a fabulous arrangement if you look at it right.

So… bring on the Perrys… the Bachmans… the Palins… Newt… Mitt… Rudy… Huntsman… Johnson… Paul… or even Santorum.  Oh, who am I forgetting… that’s right… what’s his name… you know… that black racist ex-banker… Cain, yeah, bring him back too… why the heck not?  And some have even suggested that the GOP’s candidate hasn’t even announced his or her candidacy as yet.

Some are suggesting that it could be Jeb Bush that shows up on the ballot in 2012.  To which I can only say… then one day he was shooting at some food and up through the ground came a bubbling crude.  I think that would be cool… then maybe Hillary could run in 2016, and after that another Bush… followed by Chelsea Clinton… and after that another Bush.

Is it me, or has this whole American political thing become nothing more than a choice between frying pan or fire and brimstone?  I’m starting to think the debates would be better with a laugh track.

Like I said… I’m voting for Obama again… assuming the weather holds up.

Mandelman out.

And please consider supporting the documentary I’m producing on the foreclosure crisis…

… because we can’t solve what we don’t understand in the first place.

CLICK HERE to watch the trailer.

This article originally ran in December 0f 2009, but I’m reposting it because maybe it will be read by someone who will find it even the least bit interesting.

Training personnel to properly interact with those losing homes to foreclosure is not only the right thing to do… it’s also likely to improve a mortgage servicer’s bottom-line.

Losing a home to foreclosure is something most people never forget. It’s an event likely to stay with you for the rest of your life. It’s certainly not something most people think will happen to them… until it does. And it can happen to anyone at any stage of life, young, old, rich, poor… all can find themselves at risk. As the off-color colloquialism says about life… stuff happens. Although many people might not readily agree, foreclosures are statistically a “there-but-for-the-grace-of-God-go-I” type of situation.

Of course, there are times when more stuff happens to more people, and today is obviously an example of such times. The economic conditions that we’re experiencing today are causing more foreclosures than at any time since the 1930s. When housing prices began to collapse a couple of years back, no one could have seen just how far things would go, and how difficult it would be to bring our economy back to life, as we’ve known it.

One of the causalities of our accelerating economic downturn has been a shared understanding of its cause. Some blame our politicians, some blame Wall Street’s bankers, some blame the Federal Reserve, and we’ve all heard that it was the sub-prime borrowers themselves that are the root cause of our recession.

Belief in a Just World

As human beings, we need to understand the causes behind events that negatively impact our world in order to feel safe. When we don’t understand how or why something happened, when something appears

to have been a truly random occurrence, it frightens us terribly because we can’t plan to protect ourselves from such an event.

Melvin Lerner is a prominent social psychologist. In his 1980 book, “The Belief in a Just World: A Fundamental Delusion,” he argued that people want to believe in the inherent justice of the economic system in which they live, and want to believe that people who are suffering are responsible for their own situations. He conducted a series of experiments and provided empirical evidence showing that after an initial feeling of sympathy, people tend to develop negative views toward others who are suffering. And that’s the type of negative tendency that seems to be in play today.

So, perhaps it shouldn’t be surprising that instead of having sympathy for homeowners that are losing their homes to foreclosure, many people are blaming the homeowners themselves for their predicaments. It’s just an example of the general tendency that was documented by Melvin Lerner and other social psychologists many years ago.

The Sanctity of Contracts

The other factor that comes into play involves the phrase: “sanctity of contracts.” We live in a nation with a capitalist economy that depends on the sanctity of contracts. Our founding fathers put the contract clause into the U.S. Constitution to make clear that people need to live up to the documents they sign. Article I, Section 10 of the U.S. Constitution states: “No state shall pass any law impairing the obligation of contracts.”

So, people have the tendency to view those losing homes to foreclosure as not living up to the contracts they’ve signed. They bit off more than they could chew, is a phrase often heard by those who lack sympathy for borrowers in foreclosure.

How do these factors manifest themselves in human terms? To understand, picture a line of moving trucks extending for hundreds of miles, taking the furniture of countless families to storage lockers. Picture the schoolchildren saying goodbye to their classmates, leaving the comfort and security of their own bedrooms. Picture the parents sitting up late at night looking through bills trying to figure out how they can save their home, or resigning themselves to the fact that they can’t make it. Picture the arguments, the crying, feelings of loss, of failure… picture the moment when all hope is lost.

Picture the day they must leave their home, getting in the car, pulling away from their home, the ones that turn to look back, the ones that force themselves not to look. The radios that aren’t turned on because no one wants to hear music at a time like that. These people you’re picturing aren’t going on vacation, they are being abruptly moved to the other side of town. They won’t have their own yard to play in. They won’t have their patio to relax on as they watch their children run and play. They’re losing their most prized possession… their home.

Yet, it’s also easy to take a stern view of this spectacle. The arguments go something like this: Foreclosure is not the end of the world. There are valuable lessons to be learned from such a life experience. They got themselves into this mess, now they have to pay the price for their own irresponsible actions.

The Price Paid by Children

Some of the hardest-hit victims of foreclosures are children. According to the Center for Responsible Lending, over the last two years: “Over 1.95 million youth have been affected by foreclosure.”

Brenda Jones Harden, Ph.D., wrote that “children exposed to violent, dangerous, and/or highly unstable environments are more likely to experience developmental difficulties.” Children hear more than most parents think they do, so parents’ stress is transferred to their children more than anyone might think.

Oftentimes, the kids come to feel that they are both a financial and emotional burden. They can begin making sacrifices for their families, wanting less, eating less. Some children are forced to quit teams they’re on, or stop taking music lessons simply because their parents cannot afford them. Even young children start taking on weekend jobs to help pay the family’s bills. Vacations are cancelled, and other normal childhood comforts are left by the wayside.

There are other enduring side effects as well. Being uprooted creates instability in a child’s life. They lose friends, teachers, teammates, social circles, perhaps most importantly, confidence. Being forced to change one’s lifestyle is both difficult and stressful for adults. For children, it can be a nightmare.

Children that are displaced by foreclosures often start bringing home lower grades. They exhibit behavior caused by lowered self-esteem. Behavioral issues often become common problems among kids because they feel that they don’t belong in their new setting. Frequently, families that lose their homes can’t afford to move into a neighborhood of equal socio-economic standing. The children can find themselves in new surroundings that may have more crime, inferior school systems, and fewer activities available for youth.

The Great Depression of the 1930s changed a generation. Those that lived through those difficult times altered the way they lived the rest of their lives. What will our nation experience a decade from now as a result of the millions of foreclosures our country continues to experience in these difficult times? No one can know the answer to that question, but it seems clear that there will be some discernable impact on segments of our population, and today’s children are certain to pay a price.

Exhibiting Anger

The crisis we’re experiencing is morphing as it continues, and we can expect continued changes that lead to further problems in our society as the recession lengthens and broadens in scope. One of the factors that’s changing is that the level of anger among foreclosed homeowners certainly appears to be rising, and lenders and mortgage servicers, faced with managing and marketing the volume of foreclosed properties, are increasingly seeing that anger in very tangible terms.

According to the National Association of Realtors, foreclosed properties already make up 45% of home sales, and the number is climbing. Home prices have continued to decline at record pace in 2009, and there are no signs of them stabilizing. Further price declines will undoubtedly result in even more foreclosures. Homeowners remain unable to refinance out of unaffordable adjustable rate mortgages (“ARMs”), and as the market continues its decline, more homeowners, realizing that they have little hope of building equity, will choose to walk away from their properties.

Homeowners losing homes to foreclosure have started advertising their home’s fixtures on Websites like craigslist.com. Some are stripping their home down to its wiring, destroying its plumbing, tearing out entire kitchens, and even removing roofing tiles. Garage doors are disappearing. Built-in cabinets are gone. Even furnaces and air conditioning units are up for sale by homeowners losing their homes to foreclosure.

Recently, the media reported that one homeowner in Monsey, NY, actually leveled his home with a bulldozer just a few days before the property was scheduled to be sold at auction.

Of course, not all homeowners experience that level of anger, or if they do, choose not to exhibit their anger in such extreme ways. But the trends are disturbing. More and more often homeowners are damaging their homes before being forced out as a result of foreclosure.

Communities Suffering

The large number of foreclosed homes on the market today means hundreds of thousands of homes sitting vacant. And vacant homes are magnets for partying teenagers, drug users, vandalism and crime. Broken windows, smashed plaster, huge holes punched in walls, graffiti on walls throughout the homes, debris, and much worse are becoming more commonplace, as more neighborhoods are seeing more foreclosed homes remain on the market for longer periods of time.

Abandoned homes from the foreclosure crisis have a direct impact on the rise in crime in numerous communities. Even when not the result of homeowners or local teenagers, thieves start breaking into these vacant houses, stripping them of valuables, and the destruction of property and vandalism is making the homes even more difficult to sell. Often, as a result, it requires more money to repair these homes than the homes would sell for in today’s market.

According to a recent study by Dan Immergluck of the Georgia Institute of Technology in Atlanta, and Geoff Smith of the Woodstock Institute in Chicago, “when the foreclosure rate increases one percentage point, neighborhood violent crime rises nearly 2.5 percent.” A study conducted in Austin, Texas last year, found that “blocks with unsecured buildings had 3.2 times as many drug calls to police, 1.8 times as many calls reporting theft, and twice the number of calls reporting violence as blocks without vacant buildings.”

According to a paper on the impact of foreclosures, published by NeighborWorks America:

“When homes are abandoned because of foreclosure, entire communities begin to deteriorate. Garbage, un-mowed lawns, pests and dilapidated roofs and porches are eyesores. The lack of care can change the entire atmosphere in a community. The people who remain may have feelings of loneliness, fear and frustration. To make matters worse, potential buyers find conditions like these unattractive, turning them away and cause the empty homes to remain on the market for months and even years.”

Neighbors Pay Too

According to the Center for Responsible Lending, “Foreclosures cost neighbors $223 billion.” The Center also cites that “Over 44 million homes in the United States will experience property devaluation as a result of foreclosures in their neighborhoods. Forty-two counties in the United States can expect to see their property tax base erode by more than $1 billion. And households located in proximity to lost properties could see the value of their property decrease by $5,000, on average.”

According to a story in USA Today, Vallejo, California, once a vibrant and flourishing place to live, recently had to declare bankruptcy when the collapsing housing market caused their local economy to go over the edge. “Vallejo cut 87 jobs and slashed funding for parks, a library, a senior citizens’ center and other public services, but it wasn’t enough to hold off the bankruptcy filing.”

Unfortunately, social programs and public services are often the first things to be cut from municipal budgets, and seeing the irony in this vicious cycle is unavoidable. The programs that are cut first are often the programs that exist to help those suffering from the crisis that caused the cuts in the first place.

Gimme’ Shelter

Of course, the question we should all be asking, with so many people losing homes, is where is everyone moving to? According to the National Coalition for the Homeless:

• 76% of displaced homeowners and renters are moving in with relatives and friends.
• 54% move to emergency shelters at some point.
• 40% are already ending up on the streets.
• 61% of state and local homeless coalitions say they’ve seen a rise in homelessness since the foreclosure crisis began in 2007.

Of course, many homeowners that lose their homes to foreclosure ultimately become renters, and the increasing demand for rentals has, quite predictably, led to rising prices. So, not only do foreclosure victims have a tough time qualifying for rental housing due to their damaged credit scores, but many are being priced out of the market as well.

And that’s not the end of the rental story. Foreclosures are affecting renters too. Many of the foreclosed properties nationwide are apartment unit buildings. According to the Furman Center: “60% of the 15,000 foreclosure filings in New York City last year were on multi-unit buildings.” And the result is families forced out of their apartments often with very little notice. According to the National Low Income Housing Coalition, “In the State of Nevada alone, 5,000 families have been evicted from their rental homes in the last 18 months.”

The coalition also reports that in suburban Los Angeles, a tent city of more than 200 displaced residents has emerged. Notoriously high rent payments in the LA basin are leaving many with no other option than to pitch a tent or live out of their car in settlements like this. At this settlement there is no electricity, no plumbing and no drainage. There is nowhere to properly store food. Clearly, the lack of plumbing and refrigeration poses serious health risks to the residents of this makeshift community.

Homeowners Attitudes About Banks Worsening

Lenders, mortgage servicers, hedge funds, and various real estate investors are all more than aware of the crisis and its ramifications. Yet, distressed homeowners continue to report their frustration and anger over the way they are treated by their bank. And for banks and mortgage servicers wondering about the outcome of this increasing homeowner dissatisfaction… well, the writing is on the wall.

In a November 2008 story, published by the Oakland Tribune (Oakland, California), customers of Countrywide, Wachovia, and Wells Fargo, among others, describe the banks as uncooperative, ineffective and rude.

“Countrywide says it wants to help people restructure? That’s baloney,” said Dawn Aguiar, who bought her Fremont home for $587,000 in 2005. “They have not been helpful at all.” She financed the purchase with a $586,000 mortgage from Countrywide, but homes in her neighborhood now sell for $450,000 to $500,000, so her house is “under water” – worth less than the loan. Her adjustable rate loan balance increases monthly, and she’s behind in her payments.

“One lady I spoke to was so rude, she had a real attitude,” Aguiar said. “She talked down to me like I was a deadbeat.”

The complaints from homeowners at risk of foreclosure about rude treatment by bank personnel are mounting in number and visibility. A quick check online yielded the following:

Mark Gagliardi about Countrywide: “They’re not proactive. No calls, no follow-ups. And when I call them, I get put on ignore.”

Sue Chai Spaulding about Bank of America: “They don’t want to help you. But they shouldn’t take this so lightly. These are people’s lives. They have been rude to me.”

Rachelle Gonzales about American Home Mortgage: “It’s so frustrating. They say they’ll help. Then they say no. They have called me names. They have called me a slime. This has been awful. Just awful.”

On one Website discussion about homeowners losing homes to foreclosure, the following discussion thread was easily found:

The first comment said: “The best way to ruin a house beyond repair is this… Get yourself a couple of bags of cement and mix a lot of water to make it a bit light… Drop it down every open pipe in your house (sink, toilet, bathtub, sewer pipes, main water pipe) then let it set. The repair will cost the bank more than the house… replacing every pipe in the house means they have to redo the house. They might be able to charge you tho… ha, ha.”

To which another replied: “Awww… the poor banks. Whatever will they do? Ain’t karma a bitch?”

And then another added: Yes they could, but, what can they get out of you when you have nothing to lose? Remember kids, fire cleanses everything.

And then another: “Great point. I hate banksters.”

And another: “Payback’s a bitch.”

And then another: “I think this is funny as hell. Everyone getting evicted should take all they want, then burn the place down.”

And another: “The bank may own the house but not the appliances! Of course they should take them – they are theirs. I can find NO sympathy in my heart for bankers or real estate agents – they’re right up there with tax collectors.”

And then another: “If the lender makes things hard, they get to live with the consequences. That house will be torn to shreds.”

And lastly: “If you ask for peace, prepare for war.”

The Cost of Foreclosing

The costs involved in foreclosing on a home are high and getting higher. Lost principal and interest payments, tax and insurance payments, maintaining the property, lost servicing fee income, costs of collection efforts/servicing, legal costs for handling the foreclosure, administrative fees, costs of restoring the property to saleable condition, real estate commissions… all play a role in negatively impacting a lender’s bottom-line.

According to estimates from Standard & Poor’s, published in 2008, the average cost to a lender, expressed as a percentage of the loan balance is 26%. The costs breakdown as follows:

Amount lost in interest payments: 13.6%

Property taxes paid by lender: 3%

Legal fees paid by lender: 1%

Real estate agent commissions: 6%

Home maintenance: 3%

With the housing crisis still in full swing, home prices still not at bottom, and many forecasting millions of foreclosures still to come, it’s clear that lenders will endure more pain over the next few years. What banks and servicers need to consider is how homeowner attitudes are likely to change for the worse as the crisis continues.

Our politicians have recently started to see how populist anger can make governing much more difficult. The outrage over the AIG bonuses provided an example of how close many of our nation’s citizens are to marching in the streets. One can only imagine how homeowners will feel a year or two from now, when many of those who thought they could make it through our economic downturn, find that they have not. No one can know for sure, but one thing seems certain: If they’re getting angry today, they’ll be that much angrier a year from now.

Loan Modifications

As the economy has deteriorated, the number of foreclosures has continued to increase, which places further downward pressure on home values, which in turn causes more foreclosures and does further harm to our economy. Today, we all realize that foreclosures benefit no one, although to-date, we have not united behind a solution to this very serious ongoing problem.

As a result of this dangerous, downward spiral, the cost of foreclosure in some parts of the country is reaching the level at which no one, including the investors that own the property, wants to foreclose.

One alternative is loan modification. If, by modifying the terms of an existing mortgage, the borrower can afford the mortgage payments and therefore remain in the home and avoid foreclosure, it’s often true that everyone, even the investors that hold the mortgage on the property, comes out ahead. For investors, it’s really a question of which alternative, foreclosure or modification, offers the greater financial return. There are several methods for determining the cost differential between the two alternatives, for example one could compare a present value calculation with the expected cost of foreclosure, factoring in variables like repairs and reconditioning, expected time on the market, and assumptions about trends in home prices.

It’s worth considering, however, that lenders and servicers continue to struggle with loan modifications, which are transactions that are particularly time and labor intensive and often produce unsustainable results. As an example, studies published last year indicate that when banks attempt to handle loan modification negotiations directly with a borrower, the end result is that 60% are back in default in six months.

The reasons for this are many, but the overriding fact is that negotiations between a bank and an individual homeowner at risk of foreclosure, are obviously not negotiations between equals, and that manifests itself

in high re-default rates in the first year.

By contracting with qualified and quality loan modification firms, banks may be able to increase the diameter of the pipeline and therefore modify more loans, keeping people in their homes where they’re supposed to be.

Cash for Keys

A number of lenders have adopted the practice of offering to pay a homeowner about to lose a home to foreclosure a cash payment for leaving the home undamaged. Lenders report offering payments of $1500-$3,000. But with the incidence of borrowers damaging their homes before they leave rising, offering three grand may only be keeping the already honest… honest.

For those angry enough to strip wiring out of a home, remove a garage door, or even sell the air conditioning unit, three thousand dollars is not likely to accomplish much.

The Best Way to Catch Flies

Lenders seeking to reduce their costs of foreclosures should consider the old axiom: You catch more flies with honey than you do with vinegar.

As it relates to a lender’s loss mitigation and collection personnel, it means that training them to better understand the psychology of foreclosures, to feel more empathy for those losing homes, to identify with a parent with children in financial distress… and more… banks can expect to be repaid hundreds of times over.

People in foreclosure, and those at risk of going into foreclosure, are often scared, lonely, tired, insecure, and sometimes confused. They’re not thinking clearly and they’re on the edge. A little kindness at a time like that can go a long, long way. A little rudeness, on the other hand, can push someone into a rage. It’s not easy to work with distressed homeowners day after day. And even though some might feel like they’re not letting their true feelings come through, at times like these, that can be difficult, if not impossible to do.

Here are some ideas that I think bank management could consider to change the way their personnel behave toward distressed borrowers.

1. Explain what distressed borrowers are thinking and how they are feeling. Give them the details. Ask them to imagine what they would do and how they would feel. By bringing them into this kind of discussion, you’ll force people to realize that others worry about the same things they do, and once they share their thoughts and feelings with co-workers, they’ll stop seeing those in trouble as getting what they deserve.
2. Share the facts about the costs that neighborhoods, communities and society as a whole pay as a result of foreclosures. You can use some of the statistics presented earlier. People sometimes fail to see how something that hasn’t happened to them personally, affects everyone personally.
3. Play the Foreclosure Game – Ask people to calculate what would have to happen to place them at risk of losing their homes to foreclosure. You can even create cards that describe various catastrophes that happen to people in life. For example: You are injured in a car accident that leaves you unable to work for three months; the driver that hit you is uninsured. A month later your spouse is laid off from work, and you have a tuition payment of $18,000 due in 90 days. You can’t take out an equity line on your home, nor can you borrow from the bank. And your retirement plan account has been reduced by 40% as a result of the latest market correction.
4. Consider asking a borrower who already lost his or her home to foreclosure to come in as a guest speaker. Often times, it’s harder to harbor ill feelings about someone you’ve met face-to-face, and the personnel stories from people who have come through it, can have a lot of impact.
5. Conduct role-playing exercises in which one person is the borrower and the other the bank manager. The borrower starts by explaining to the bank manager how they got in so much trouble. The rest of the group votes on the level of empathy and compassion the bank manager has communicated during the call.
6. Review your personnel training manuals to ensure that they are not placing counterproductive restrictions or using guidelines that make it more difficult for your people to spend the time needed. For example, do your people try to spend less than a certain amount of time per call? If the answer is yes, you may want to consider either lifting that requirement, or lengthening it.
7. Changing culture has to start at the top. Have all of your organization’s top managers speak at your training sessions. When your loss mitigation personnel hear the CEO talk about foreclosure victims with sympathy and caring… they’ll stop and listen.
8. Clip and distribute articles that highlight the heartbreaking stories of people losing homes due to no fault of their own. Many people today, still have the impression that those that got in trouble did it to themselves. Show data on the number of prime loans that are now defaulting. Examples that destroy that perception help to open minds.
9. Encourage your people to share stories with each other at regular meetings. This is not something you want to do just once and leave it alone after that. This is an ongoing program intended to make sure that the people you have on the phone aren’t causing someone to punch holes in their walls when they hang up from the call.
10. Consider increasing the number of breaks your people take during the day. And consider providing some items “just for fun” in areas where breaks are taken. An Etch-a-Sketch, Slinky, or even Play-Doh, can all bring back happy memories and help to relieve stress, or on the more serious side, provide an exercise ball, weights, or even a treadmill or two… exercise kills stress.

Conclusion

Human beings have a need to see bad things that happen to someone as not being their problem. And because of how this crisis has unfolded, many people have come to believe that everyone losing a home is an “irresponsible sub-prime borrower”. This belief can color how someone interacts with a distressed homeowner.

Those losing homes today are going through very stressful times. Many have lost jobs, and are struggling to make ends meet. Many have young children. And many have lost all hope. It’s easy for someone under that kind of stress to become angry, and an angry homeowner losing a home to foreclosure is likely to damage the home before leaving.

Banks and servicers need to take a look at how loss mitigation personnel are trained to deal with homeowners at risk of foreclosure, because as the months and even years go by, the situation will only get worse. By helping personnel to better understand what’s happening and how these customers are feeling, they can spend a little extra time, or offer a kind word that can make the difference between a home left in decent condition, and one in need of thousands of dollars in repairs.

Most importantly, communicate with the people that interact with troubled borrowers on the phone every day. It’s a hard job and constant exposure to tragic situations and frustrated or angry customers can wear one down, even if the person doesn’t realize it.

Today, just like my mother used to say… It pays to be nice.

Mandelman out.

Almost as soon as the polls had closed this past November and the midterm elections were behind us, Senate Minority Leader Mitch McConnell (R-KY) stated that making sure that Obama is a one-term president was the GOP’s most important priority.

Well, first let me state the obvious… McConnell is a jackass.  If the United States Senate has a Human Resources department, someone needs to get this guy a copy of his job description because he’s completely lost touch with what he and all of our other elected officials are sent to Washington D.C. to do.

I know that a politician’s job is to win elections, but no one elected Mitch or anyone else to work in opposition to the best interests of the American people.

And don’t start accusing me of being a member of the “Obama Fan Club,” because I’m not.  Obama has proven himself to be a terrible crisis president.  He has single-handedly managed to take what was unquestionably an inherited economic disaster on the scale of The Great Depression, and make it, not only his problem, but also his fault.

He went from being a man of the people, to being the best friend Wall Street could ever have hoped for, and for that the Republicans accuse him of being a socialist, while the left accuses him of being too much the centrist who has turned his back on their progressive agenda.  He makes seeking bipartisan consensus look like a pathetic need to be liked by everyone at school.  It’s flat-out dizzying to watch, and makes John Stewart’s job on The Daily Show far to easy.

Coincidentally (and proving that great minds do think alike),  The Atlantic published an article this month about McConnell, titled, “Strict Obstructionist,” and it’s certainly worth reading. Here’s a quote…

“McConnell called TARP’s passage “one of the finest moments in the history of the Senate.” Obama took over expecting this spirit to endure. But from the outset, McConnell blocked or frustrated just about everything the administration tried to do, including the government’s distribution of TARP funds, in January 2009, just three months after McConnell voted to authorize them.”

Although, at many times in our history, when our nation has faced real problems, the Republicans and Democrats have put their differences aside, placing the interests of the nation ahead of anything related to partisan politics in order to do what’s right for the people of this country.  But this idea is entirely foreign to McConnell.

McConnell and the GOP have made it clear that they will spend the next two years blocking anything that has even the slightest potential to make Obama look good in 2012, regardless of the impact to the American people.  It would seem that the brain trust over at the GOP actually believes that even if Americans are starving in the streets come 2012, it’s a good thing for them.

Obviously, what we have here are some low three-digit SAT scores at work.  Let’s play it out and see where the GOP’s strategy is headed.

As I write this, the Obama Administration has all but finalized a so-called compromise that will extend the Bush tax cuts for Warren Buffet and Bill Gates in exchange for extending unemployment benefits for another 13 months.  It’s either that, or something like six or seven million people in this country will soon have no income as they struggle to survive in our depressed economy that hasn’t even begun to replace the tens of millions of jobs lost over the last few years.  I don’t want to play economist here, but that doesn’t sound like it will lead to an increase in consumer spending does it?  Or am I missing something here?

At the same time, extending the Bush tax cuts for those with annual incomes over $250,000… which is about one percent of the population, by the way… besides increasing the deficit, will do what exactly?

The Republicans want me to believe that we need to keep the tax cuts in place because of something about small business owners creating jobs and rich people trickling down their good fortune on the rest of us, but that hasn’t happened for the last ten years, so what the heck are they talking about?  It’s as if they think that by repeating something they heard Art Laffer say during the Reagan years over and over again, it makes it true.  Like when they go into that incessant drumbeat about reducing the deficit being the country’s number one priority, even though you’d be hard pressed to find 100 people on the streets of any major U.S. city that would pick that for our top priority off a list of alternatives.

So, here we go… Mitch McConnell, who has been described as having “the natural charisma of an oyster,” and his GOP pals proceed to block anything that might make our lives better for the next 18 months, after which time we’re not going to do anything but return to the moronic mudslinging on Fox News, which will be in its fear-mongering glory by that point as they point out all the ways Americans are either circling the drain or have already gone down it.  Because by that time we will be two years worse off than we are now, unemployment benefits, assuming they are extended for 13 months this time, will have provided recipients with enough money for bread and water, we will have lost another five million homes to foreclosure and even the reported unemployment rate will be solidly in double digits.

Now, close your eyes and picture what you know it’s like today all over America and imagine that everything that’s keeping you up at night now, at least on occasion, is two years WORSE than it is now.  Your house that had already lost much of its value, has dropped another fifty grand, not that it matters because there aren’t anymore people left in this country who have 860 FICO scores, 30% down payments saved up, who don’t already have the homes they want and aren’t worried about losing their jobs.

So… whose running for President in 2012… or, the better question might be… who isn’t running, because economic times as I’ve just described lead to things like the Tea Party… Ron Paul… Ralph Nader… can you say “H. Ross Perot in 1992?”

The Republican primaries stage a debate with 12 hopefuls on stage… everyone from Sarah Palin to Mitt Romney… to Bobby Jindal… to God only knows.  The Christian Right doesn’t like one side, and the Tea Party can’t stand the other.

For a single candidate to emerge victorious, he or she would need to be a conservative-populist-Christian-Wall-Streeter-Deficithawk-Pro-Militarty individual who claims to be committed to stopping the wars still raging in Afghanistan and Iraq, while preventing Iran from building nukes, that is friendly to the global concerns of China and the G20, and has a vision for lowering taxes without increasing the deficit.  If you thought McCain had problems last time getting the support of his party, this next time out is going to be indescribable.

Of course, Obama is running for reelection in 2012, and he’s out on the campaign trail touting accomplishments like health care and financial reform, trade deals with South Korea and the like, and sniping at Republicans for standing in the way of change.

Want to know what happens?

The election is a three- or maybe even a four-way race, a’la 1992.  The Tea Party candidate actually manages to win 10 percent of the Republican vote, and Ron Paul or at least a reasonable facsimile wins another 12 percent.  The main stream Republican, who has had to try to please so many masters that he’s got enough wholes in him to do a pretty good Swiss cheese imitation, has become the party’s choice because he or she is the banking industry’s favorite.  There’s an Independent candidate as well, siphoning votes from the middle that is so totally disenchanted with Obama that’s they’d rather vote for Dubya again.

And as the dust settles, Obama wins his second term with 34 percent of the vote, as the Republicans keep control of the House, and the Senate officially becomes the political equivalent of the 1960s children’s television program, Romper Room.

Oh sure, Obama’s approval rating is 28 percent, and no president has ever been reelected with unemployment over 10 percent, but it doesn’t matter because the alternative candidates have either destroyed each other during the campaign, or were just plain too nutty to begin with to win a national election.  And unless Obama is caught having sex with Bill Clinton under the desk in the Oval Office, and then lies about it on national television, he’ll get 35 percent of the vote from the youth, inner city, college, and dyed-in-the-wool Democrat crowds, and that’s all he’ll need in the sort of open field race that will result from our economy being that much worse 18 months from now.

Mitch McConnell, who doesn’t come up for reelection until 2016, will be sporting one of his stupid deer-in-headlights looks as he tells the cameras that the Republicans are prepared to work towards bipartisan solutions to the nations problems and that what we need are further tax cuts.  But Obama, now safely in his second terms can’t stop picturing McConnell in a clown suit as he watches him bemoan the election’s outcome.

Yes, it’s 2012… roughly five years into our Great Recession, if we’re still calling it that positive a euphemism.  Obama is back for another four years, absent any real mandate, and with a completely dysfunctional legislature, as he stares at the worst U.S. and global economy ever.  At the end of his second term we will be wrapping up our first “lost decade,” and hoping for the sort of recovery we had back in 1936.

Obama’s first priorities will be to stabilize our nation’s financial institutions, who by then with every third or fourth house in or near foreclosure, will need to be bailed out once again… and the passage of an economic stimulus bill that will put Americans back to work.  Oh yeah, and something about reducing our dependence on foreign oil with green jobs, education, and infrastructure… and bridges… I’m thinking we’ll need to fix lots more bridges.

It’s a fate accompli, I’m afraid, because Mitch’s plan is already set in stone and underway.  And, since I will likely be drinking heavily most days when all this happens, I’d better congratulate him now…

Nicely done, Mitch!  Crackerjack work, as a matter of fact.

Laissez les bon temps roulez!

Mandelman out.

How did this happen? How did we become so utterly and bitterly divided?  Was it 9/11? Was it the Bush administration? Karl Rove? Rush Limbaugh?  Monica Lewinsky’s oral arguments with Bill Cliinton? The presidential election of 2000? The Iraq War?  Barack Obama?  Gay marriage?  Abortion.  The “war on Christmas?  What in the world… I mean, how the hell did this happen?

I’m serious about this… we’re starting to make the Middle East look like united they stand.

I don’t think it goes all the way back to Richard M. Nixon, or anything like that.  I know the Vietnam War and Watergate divided some of us, but we all seemed like we got through that turmoil pretty much intact, and no one seems to even remembers stuff like Iran-Contra.

And not only are we splitting off in more directions than the London subway, but I’m afraid too many of us have started to like it that way.  It’s become a badge of honor for some people.  Like, if I’m a “conservative” does that mean I’m anti-environment to the point that I’m basically in favor of paving the planet?  And if I’m a liberal, does that mean that I want condoms handed out in Kindergarten.

It used to be that “conservative” meant “fiscal conservative”.  But, President George W. Bush was a “conservative,” and Republicans often say they’re conservatives, but in view of their spending record, even though they keep using that word, I just don’t think it means what they think it means. And if the Democrats are supposed to be the “liberals,” then why are they spending trillions on Wall Street and leaving the working class to “eat cake”.

It’s all very confusing.  The right says Obama is a socialist and that Wall Street doesn’t like him.  But how could that be?  Did they want quadrillions?  I mean… he’s been the best thing to happen to Wall Street in the history of Wall Street, and as far as his socialist tendencies… well, when is he going to start exhibiting them do you suppose?  Because so far, his decision-making would line up about perfectly with the CEO of Goldman Sachs.

It used to think it was strange, then funny, and now I’ve just come to realize it as being just plain dangerous.  It’s one thing to watch people in suits fighting on cable news shows, it’s quite another when segments of the population start identifying with their political beliefs more than they understand what it is to be an American citizen.

I seriously don’t even know what left and right means anymore.

Someone recently analogized that today’s politics is the new sports… and if that’s true, then maybe that’s what is missing… we need red and blue shirts and caps.

The problem is that we don’t decide to root for our home team, or the team of someone else’s home by thinking it through… I don’t like the Pittsburgh Steelers because of a careful examination of the facts, I like them because I grew up with them as my home team, and they won a lot when I was in high school, I suppose.  It’s not like it was a well thought out decision or even a choice… I just like them.

But when we start to feel about our political views and players, as we do about our sports heroes and teams, it means we stop “thinking” and start “feeling” one way or the other.  And one we form such feelings, just like my love for the Steelers even though its been some 30 years since I lived in Pittsburgh, we hold onto them for a long, long time… maybe even a lifetime.

And it may be just fine as long as everything’s going pretty well, I guess it’s okay… sit around and debate stuff like whether to fund stem cell research, or all prayer in schools, or how high a fence would need to be if it’s to stop illegal border crossings.

I guess that stuff doesn’t really matter all that much one way or the other.  But when we need to pull together in order to come out on top during World War II… well, that’s another matter.

When we need to win, we can’t be the political equivalent of the All-Star Game… we need to be a real team.  At times such as those, we need to be united we stand, and screw your views on school vouchers or whatever insignificant crap you’ve decided to align yourself with, we don’t have time for it now, and besides… you could be wrong… you’re not exactly a school voucher or public education expert, in fact you only adopted this way of thinking, chances are, because you like the way it was presented by someone you already liked on television or in the newspaper.  Okay, not always, but sometimes, right?

I have a theory, and you can laugh all you want but I think it’s OJ’s fault.

I think this Divide America movement all started with OJ Simpson back in 1995. Seriously, that’s when I think it started.  Stay with me for just a moment… and see what you think.

You see, as you undoubtedly recall, the OJ Simpson trial went on throughout the year 1995, and he was found not guilty on October 3rd of that year. The trial represented essentially free programming for quite a few cable stations and it was on 24/7, or at least it seemed like that to me. It brought all kinds of commentators out of prior obscurity. Talking heads almost seem to have been born as a result of the OJ Simpson trial… the trial, as they referred to it then, of the century.

Oh, I know talking heads were around before OJ to some degree. Crossfire was on before OJ, but it wasn’t like it is today. When OJ went off to play golf in Florida, a free man, the cable networks looked to have been left at the alter, and the people wanted more. A year later both Fox News and MSNBC were founded, it seemed, in response to people wanting more talking heads and their controversial and adversarial opinions. “People in suits fighting,” as a friend of mine phrased it at the time.

Who knows what would have happened to these fledgling networks next had they not received a gift that has never stopped giving: a certain blue dress. President William Jefferson Clinton’s indiscretions were ideal fodder for Fox News. He lied about it. There was a dress… DNA… lots of personalities… it was even better than the OJ trial… and there were talking heads popping up at a furious pace. After all, what kind of expertise did one really need to comment on that scandalous mess? A little righteous indignation more than covered it.

For example, Ann Coulter’s career was born from that blue dress. Greta Van Susteren came from OJ. Hannity… blue dress. O’Reilly… 1996… just in time for the blue dress. Oh, I know Rush was around much earlier, but he was an “entertainer” back then, not a political movement, remember?

Fox News changed the definition of “the news”. And competitors have been forced to react ever since. It’s for profit, 24 hour “news”. It’s not “the news” like we grew up with.

The news we grew up with was… well, often boring. Fox News… can’t be boring, any more than any other television drama can’t be boring. They went after an audience and captured it. MSNBC finally found a different niche, as CNN has struggled to figure out how to compete with such entertaining programming branded as “news” on both sides. It’s hard to make traditional news compete with dramatic entertainment packaged as news.

Fox News has been brilliant in their execution of their business plan. They’re shameless about it, which I suppose as a for profit business, they have every right to be. MSNBC had not done nearly as well until recently when they seem to have come to the realization that they have to play one side or the other in order to survive.

Fox News is something to behold. The level of coordination in their programming is absolutely incredible. The US Army should hope to be as in-sync as Fox News programming. It’s not just their commentators that are in alignment on essentially every single topic, but their “news” programs and special reports are right there as well. You can turn on Fox News 24 hours a day and here the same coordinated point of view. If the commercials were from the right, it’d be positively overwhelming.

MSNBC has laid claim to the left side of the debate. Chris Mathews and Keith Olbermann are clearly there to compete with Hannity and O’Reilly, and they’re doing so at least somewhat effectively, as I understand it. But on MSNBC, the rest of the day is somewhat straight… and somewhat dull as a result.

Fox News did something that really effectively drew the line in the sand. They framed the situation as being “them” versus “the liberal media”. Their point of view, or that of the liberal media. Today, if you hold a view contrary to that of Fox News, and you reference something from a newspaper, or from network news, or from NPR, or anywhere that’s not approved as “conservative,” then it’s simply hogwash from the liberal media, and to be completely disregarded by right thinking Americans.

And it’s worked very well. Try it. Disagree with a devotee of Fox News and count the seconds before your view is based on “democratic talking points” or your source is just part of “the liberal media”. Seven, eight, nine, ten, eleven… I don’t think you’ll make it to twelve.  And the reverse is true for the MSNBC crowd.

If covering the Iraq War didn’t settle it, the coverage of the 2008 presidential campaign could not have made things clearer. Fox News went after Obama relentlessly… almost desperately toward the end. While Chris Matthews absolutely had a crush on Obama, and Olbermann decided that everything wrong in the world was Bush’s fault. It was embarrassing. Entertaining to many. But, embarrassing as news, just the same.

When Obama was declared the winner, the people on Fox seemed sad, like they had failed and lost the race, while MSNBC was clearly in ecstasy.

When Barack Obama became our president, quite a few people seemed to be wondering how the Obama presidency would go, and all I could think was: Really? Couldn’t we all see clearly how things would go? How else could they go? Fox News and MSNBC are for profit businesses competing with each other to capture their respective markets. How else would you expect them to behave? It was and is a fate accompli.

In case anyone is actually wondering how the Obama presidency will go, at least in the media, here’s a glimpse of 2011:

The Obama presidency says it has done some stuff. Fox News says it’s all bad and dismiss whatever the liberal media says about him. MSNBC will laud his accomplishments and sing his praises. Both will be a little bit right. Not everything will be prefect. Not everything will be bad. The conservative media will follow FNC’s lead. The liberal press will join in the MSNBC chorus. The boring media will be as boring as ever. Obama will win again in 2012… with 36% of the vote, a’la 1992.  There’ll be a mainstream Republican who will finish a close second, a Tea Party candidate that will get more votes than expected.  Ron Paul will make a showing.  And who knows… there could be a “liberal” challenger to Obama.  At the end of the day, the “right” if so fragmented that there simply won’t be anyone on the other side capable of galvanizing the troops in sufficient number.

No? Read it again. Of course that’s what’s going to happen. What else could possibly happen? It doesn’t matter what Obama does… that’s how it’s going to work out (unless, as I’ve said before, Obama gets caught on video having sexual relations with Bill Clinton under the desk in the Oval Office… in which case all bets are off).

There’s simply no other possible outcome.

Republicans, in order to raise money and win primaries have to somehow bring together the religious right with corporate America, and now wrap a Tea Party and Ron Paul’s brand of pragmatism in there as well.  It’s just not possible, as we saw in 2008.  John McCain had significant trouble just getting the support of his own party, even after he had the nomination entirely sewed up.

The Democrats fight among themselves too, but in presidential elections, they seem to do so in a debate over whether to have coffee or tea… both hot beverages with caffeine in them.  Like, Barack v. Hillary… politically, you could almost flip a coin, yet the Hillary fans and the Obama fans fought like Yankees playing Red Sox in the World Series… and never the two shall meet.

Now, perhaps as much as at anytime in our nation’s history, we need to come together in order to solve serious very serious problems.  Do we at least all see that?

Do we at least all now see that the financial lobby has amassed far too much political clout in our legislature, and that as long as their interests are driving all major legislation, they will block the essential reforms we need to recover and move ahead?  We simply cannot allow our nation’s laws to be motivated by Wall Street’s profits above all else.  Everyone can see that, right?  If not, stand by… it becomes more evident every day.

Emblematic of this, was the banking lobby’s resistance to a bill in New York this past year, that proposed to allow homeowners to recover attorney’s fees in the even they were victorious in a foreclosure related matter; the law already provided for the banks to receive attorney’s fees in the event that they prevailed.  In other words, the banks would get their attorney’s fees if they won, but this bill proposed that homeowners be allowed the same thing if they were to come out on top.  You know… basic fairness.

Yet, the banking lobby fought tooth and nail to stop the bill from passing and once it did, to stop the governor from signing it into law.  They opposed basic fairness… vehemently, I might add.  They are simply not a group we can allow to be the dominant political force in this country, and the only way that will change is if we become one country again.

We need to stop being two Americas. On one side, we need to stop acting out of fear, while on the other, we need to stop ignoring such fear; it is not without basis. We need to find some balance, but is that even possible anymore?

We know from whom we get our news. Is it from Fox News? If so, then I know your views on most everything. Is there anything that “the liberal media” could possibly report that would change your views about anything? No. Or do you get your news from MSNBC? In that case I don’t have to worry about telling a Bush joke, or bashing Republicans around you, right?

I don’t think there’s an answer, short of maybe another 9/11, that will see our nation come together again. I think Barack Obama thinks he must try to foster bipartisanism. But that won’t change the outcome. FNC simply won’t cover Obama’s success because doing so wouldn’t be profitable… and they are a for profit business whose purpose is to make a profit for its owners. No more than MSNBC is going to attack the Obama presidency, once again, no matter what.

But we’re not talking about the president sexual indiscretions this time around. We’re not playing around with a war that’s 6,250 miles away. No, what we’re facing is going to hit us right here at home… all of us on both sides of the aisle.  What we’re facing will not discriminate. None among us will emerge unscathed or unharmed.

I think it’s clear that Barack Obama will do whatever he’s going to do, right?  Is there really any chance of changing that?  And the banking lobby is going to do whatever they are going to do, right?  And the Republicans, now in control of the House, have already signaled where they plan to take things, and the same is true from the Tea Party, Ron Paul, everyone is playing their roles perfectly and predictably.  The die, as they say, has been cast.

The only wild card is “US”.  What will the people do?  Can we be counted on to just continue to vote with all the thought of a sports fan rooting for his or her team.  Will we continue to be influenced by the same sources of news we have in the past, or will more and more people start to realize that there’s real reason to set aside the politics of left and right, and start to speak out as to right and wrong.

The score at the bottom of the half is Bankers 99… People… 1.  But the second half is coming up soon, and there’s always the possibility that the People come out fighting and things do change.  It’s always possible that we will come to realize that our similarities are far more important than our differences.

If not, the outcomes seem all be preordained.

We reap what we sow, I suppose… we reap what we sow.

Mandelman out.

Twas the Night Before Christmas, 2007

Twas the night before Christmas, 2007

And as I sat listening to some nice Andre Previn.

I realized that this had been an exceptional year,

Deserving of special mention, so I opened a beer.

~~~~~~

It started with a woman as Speaker of the House,

Cheney looked like a cat looks when eyeing a mouse.

Then I toasted Gerald Ford while having a drink at a bar,

Said Bush in his comment, “He sure made a great car.”

~~~~~~

Scooter Libby went on trial, and his supporters looked clique-ish,

Did he do something illegal, or just something dick-ish?

Global Warming took center stage, thanks to Al Gore,

Now even Bush says it’s bad, so now I’m not sure.

~~~~~~

The little guy from Iran, he kept making a racquet,

But who’s scared of a guy in a Members Only jacket?

Larry Craig got arrested, but it was just by chance,

When he sits on a toilet, he just has a wide stance.

~~~~~~

Our Attorney General had problems over people he fired,

He said: “I don’t recall,” until we were all tired.

And what about the sports guy with the last name of Vick,

He’s now in prison for making us sick.

~~~~~~

The Senate tried again to research the stem cell,

But G.W. warned that we would all burn in Hell.

Then Wolfowitz got tossed, out of the World Bank,

For helping his girlfriend, who looked to me like a skank.

~~~~~~

Of course, the war in Iraq between Shiite and Sunni,

Continued as planned, but whose planners seemed loony.

And we continued to torture detainees held in Cuba,

But the media preferred covering a missing girl in Aruba.

~~~~~~

The Brits told Tony Blair that he had to step down,

Leading Bush to wonder what could he do for Brown.

And the leaders of Pakistan sure looked like real pricks,

Still, I loved it ’cause they hit their politicians with sticks.

~~~~~~

Karl Rove quit his job, with no need to explain,

Clearly Dubya was no longer using his brain.

And sweeping baseball’s dirt finally ran out of rugs,

Apparently our sports heroes are simply on drugs.

~~~~~~

For a couple of days we followed Don Imus’ woes,

Seems a shock-jock can’t say “nappy-headed ho’s”.

And I think there was something about Brittany Spears,

But watching CNN cover it,  just brings me to tears.

~~~~~~

So, we watched while our President continued his mess,

And now we’re watching Giuliani on YouTube in a dress.

Yes old “W” proceeded to go down the old drain,

And not far behind was an even older John McCain.

~~~~~~

And don’t forget Huckabee, and Thompson, and Mitt,

It’s kind of like a choice between stupid and shit.

And what about Hillary and archrival, Barack…

I’d go pay-per-view to see them in the sack.

~~~~~~

‘Course there’s Edwards, and Richardson, and Kucinich, and Biden,

And when they’re asked questions they start slippin’ and sliden’.

To me next year’s election looks like a dogfight,

Between liberal lions and the huge Christian right.

~~~~~~

So, thinking I’d finished my poetic recap,

And after three beers, it seemed time for a nap.

Then up on the roof there arose such a clatter,

I sprang to my feet to see what was the matter.

~~~~~~

And can you believe it? Can you guess what appears?

A sleigh driven by Bill Clinton, and on his lap Brittany Spears!

I rubbed my eyes twice and was about to turn and go,

But then I heard his voice, and he said: “Ho, Ho, Ho.”

~~~~~~

He asked if my stockings had been hung with great care,

But I couldn’t stop starring at Brittany without hair.

And then he placed his finger on the side of his nose,

And all of a sudden, Brittany lost all her clothes.

~~~~~~

More rapid than eagles they flew in their glory,

Followed by a Fox News crew, who now had their lead story.

“How depressing,” I thought, looking down at the floor,

That TV news will air that, over genocide in Darfur.

~~~~~~

But I heard him exclaim as they flew by a star,

“Don’t worry, you can tune in to ole’ NPR!”

Then I went off to bed and I turned off the light,

Merry Christmas to all, and to all a goodnight!

~~~~~~

HO, HO, HO!

Happy Holidays to All!

by Martin Andelman

Mandelman Matters

Please click the link below and consider joining your fellow homeowners as they make their voices heard in Washington and across the country.  Because only together will our voices be heard.

A HUNDRED THOUSAND HOMEOWNERS

A Virtual March on Washington

Can you hear me now?

“The right of representation in the legislature is a right inestimable to the people, and formidable to tyrants only.” Thomas Jefferson: Declaration of Independence, 1776

Yesterday all U.S. citizens over the age of 18 had the right to cast their vote… to choose those that will represent and govern them, at both state and federal levels.

It is a right we should not take for granted, for it is the right to vote, more than any other, that defines our republic as a democracy.  For universal suffrage, it’s worth noting, which means letting everyone vote, did not come easily or along side the ratification of our Constitution.  Two hundred years ago, America’s voters were exclusively white, male, and wealthy.  (Today, I suppose that would make them all Wall Street bankers.)

Throughout our history there have been many great Americans… people who we remember and honor for their contributions to our society… people that helped make the experiment that was America in 1776, the great nation it evolved into over more than 200 years.  It may always be far from perfect, but that doesn’t mean it won’t always be great.

The road we’ve followed as a nation has not always been smooth, and in fact on many occasions we have found ourselves headed in the wrong direction.  But, as Thomas Jefferson once said:

“Should things go wrong at any time, the people will set them to rights by the peaceable exercise of their elective rights.” Thomas Jefferson, 1806

And so we have.

Thomas Jefferson was the author of the Declaration of Independence and the third President of the United States.  Without question, he was also our nation’s greatest champion of representative democracy and the rights of man.  And more than any other in our collective past, Jefferson and his words will never be forgotten as they are inextricably linked to the founding principles of American self-government.

Not all great Americans are as memorable as Jefferson, however, in fact there are many that have passed into relative obscurity as the years have passed and rights we fought for become second nature, or at times even taken for granted.  The right to vote should never be thought of in that way, for again in the words of Jefferson:

“It is the people, to whom all authority belongs.” Thomas Jefferson, 1821

The last two years have been particularly difficult for millions of Americans, and the years ahead are all but certain to present significant challenges for working Americans as well.  In fact, I believe that soon all Americans will come to understand that we have entered a time that history will one day view as having defined our nation’s future.

Over the last 30 years or so, the banking and financial services sector of our economy as grown in size and importance, both to our country and to the world.  Some of that growth has occurred as a result of the bipartisan penchant towards deregulation, and the economic outcome should leave little question that the pendulum of deregulation has been allowed to swing too far.

Simon Johnson, who was Chief Economist at the International Monetary Fund between 2007-2008, described the situation we face today better than I could ever hope to in an article published by The Atlantic in May of 2009, titled The Quiet Coup.  (If you haven’t read it, you have truly missed out, and I highly recommend you do so.)

In that article’s introductory paragraph, Johnson says:

“The crash has laid bare many unpleasant truths about the United States. One of the most alarming is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: Recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

It should be obvious to anyone paying even the least bit of attention to the events of the last two years that our banking industry has gained too much influence over our government.  The financial sector spends more on lobbying than any other group by such a margin that there is really no number two, and the results of that spending can be seen in the trillions of tax-payer funded bailouts of Wall Street firms to the exclusion of all else.  While working class Americans have seen much of their wealth evaporate as housing prices have fallen since 2007, Wall Street’s bankers have been paid record bonuses each year.

An “oligarchy” can be roughly defined as a group that uses its economic power to gain political power, and breaking an oligarchy’s hold on government, although never easy, is always necessary.  President Franklin Delano Roosevelt had to do it during the 1930s, and we will have to do it again going forward if we are to preserve the middle class in this country and experience growth in our real economy, as opposed to hearing of growth in the financial economy.

I know that many people today feel helpless to affect change, pitted against the immense wealth and political power of our giant banking institutions, and if it were only money that was required to fight the battle, their feelings would be justified.  Luckily, this is the United States of America and we the people in this country posses something far more valuable that mere money… we have the right to vote.

“The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to.” Thomas Jefferson, 1823

It’s up to us to demand that our government represent the interests of the people… certainly the banking lobby is not going to do it.  The banking lobby is why we have a credit card in this country today that charges 79.9% interest.

Sure, they have the money to send lobbyists to Washington D.C. in numbers so large that the challenge of being heard may appear insurmountable at first glance.  But, while 4,000 lobbyists may sound like an army, it would shrink to insignificance standing next to 80 million Americans armed with the right to vote.

“What country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance?” Thomas Jefferson, 1787

In the years ahead, working Americans will struggle financially and it will be a long time before many of us feel economically secure.  In truth, middle class incomes have been stagnant for 30 years in this country, and declining for the last 10, but we’ve coped by working longer hours and borrowing, made possible by easy credit and low interest rates.

But going forward, we can’t work more hours per week, unemployment will remain high throughout the next decade, and thanks to our bankers, it will be many, many years before obtaining credit is thought of as being anywhere near “easy”.  It won’t be easy to adjust our lifestyles to make do with less as we watch the very small, yet highly visible segment that is made up of the wealthiest Americans only become that much richer.  That is not how America was intended to operate, that is not what our founding fathers had in mind.

“We believe that… proximate choice and power of removal are the best security which experience has sanctioned for ensuring an honest conduct in the functionaries of society.” Thomas Jefferson, 1816

It is my hope that Americans will remember that although our country may have changed in some ways, it has not changed in others.  The power to self-govern is still very much ours, and it is up to us to exercise that power.  Members of the House of Representatives must still seek reelection every two years, and the House can still override a Presidential veto.  And our constitution is still very much intact.

Now is not a time to concentrate on what’s changed, now is a time to remember what has not.  Many Americans see our elected representatives as not being responsive to the needs of the people, and I think that’s a fair criticism.  They’re being responsive to the banking lobby because they are the people offering to fund their campaigns, but that’s all they can do.  They can’t re-elect them, only we can do that.

“The Legislative and Executive branches may sometimes err, but elections and dependence will bring them to rights.” Thomas Jefferson, 1821

The things said by Thomas Jefferson ring as true today as they did more than 200 years ago.  And although we remember his wisdom and his contribution to our nation’s beginnings, there are so many American heroes that we don’t think of often if at all, but who also helped to make this country great, at times of great turmoil, when it was by no means assured that we would follow the right path.

Join me now for the stories of three such Americans.  May their stories remind you of the power we all posses to serve our country and help it grow and prosper, so that our government of the people, by the people, and for the people shall not perish from this earth.

The place is Providence, Rhode Island.

It’s the month of June in the year of our Lord, 1842.

Two brass cannons stand on College Street.  They are pointed at the city’s arsenal.  A huge crowd stands in the dense fog that night, lined up behind the weapons.  They are ready to march against their own government.

It had been roughly 60 years since the American Revolution was supposed to have established liberty across the United States, and the Declaration of Independence had declared “All men are created equal”.

Our government was to represent the people’s interests, but Thomas Dorr understood that tyranny still reigned in Rhode Island, and elsewhere, because in order to vote in America’s new democracy, you had to be white, except in a few Northern states, male, except in New Jersey, where women voted until 1807, and a landowner nearly everywhere.  In some states, that meant that more than 85% of the adult population was being denied participation in the country’s political process.

Thomas Dorr, however, was not one being left out… as a white male, from a wealthy family, and a graduate of Phillips Exeter Academy and Harvard College, he had always had the right to vote in America.  But he knew that it was wrong for others to be excluded, because he believed in our nation’s Constitution, which began, “We the People…”

Dorr and vote-less delegates from around the state met illegally in October of 1841, to create a state constitution granting the right to vote to all white males over 21 years of age.  Six months later, in two separate elections, landowner voters elected Samuel Ward King as governor, while voters empowered by the “People’s Charter” chose Dorr. Rhode Island’s population had split right down the middle.

So, Thomas Dorr, his 3,000 followers, and two stolen canons stood there on that foggy June night in 1842, planning a coup… planning to disarm what Dorr called “the illegal government of Governor King”.  An observer to the events that night said: “Residents were up all night with watchful eyes and aching hearts, to await in the most painful suspense the dread spectacle of our fair city wrapt in flames and her streets deluged with blood.”

Unfortunately, perhaps, the stolen canons were apparently rusty, failed to fire, and the crowd soon dispersed, leaving Dorr and something like 50 others to drag the canons back to their headquarters.  In the morning, 1,500 armed men from the King government arrived to arrest Thomas Dorr, he was ultimately tried for treason and imprisoned for two years before being pardoned, after which he faded from public life.

At his trial he spoke eloquently, saying:

“The servants of a righteous cause may fail or fall in the defense of it.  But all the truth that it contains is indestructible.”

And on that point he was right… his cause was indestructible and the states started dropping the requirement that one own land in order to vote the very next year, although the State of Rhode Island held out until 1888.  By the time the Civil War started in 1860, just about every white man in the country was allowed to vote on Election Day.

Of course, the story doesn’t end there…

It was 1917, when Alice Paul, a demure but determined Quaker with a Ph.D. (always a dangerous combination), found herself incarcerated, and the leader of a very refined group of women imprisoned in Virginia’s Occoquan Workhouse for Women.  Serving time along with Alice was a 60 year-old nurse, a wealthy widow from Philadelphia, and even a few wives whose husbands were prominent Washington D.C. newspapermen.

The women were sentenced for demanding, quite skillfully I might add, that women in this country be granted the right to vote.  It was a fight that had been going on for many years by that time, the first Women’s Rights Convention having been held in Seneca Falls, New York back in 1848.

Men, it should come as little surprise, weren’t exactly quick to warm up to the idea of women’s suffrage in this country, in general believing that women were biologically unfit for participation in the political process.  In fact, a speaker at a large meeting on the topic, held in Albany, New York at around the same time Alice found herself in the clinker, was quoted as having told the crowd:

“A woman’s brain involves emotion rather than intellect, which painfully disqualifies her for the sterner duties to be performed by the intellectual faculties.”

And a Massachusetts journal announced:

“Housewives!  You do not need a ballot to clean out your sink spout.”

Women’s suffrage, as a result of such attitudes, was slow going.  The State of Washington was the first to give women the right to vote in 1910 and California followed in 1911.  Then the states of Kansas, if you can believe that, Oregon, and Arizona all followed suit in 1912.   But, by 1917, Alice Paul had tired of waiting for the rest of the country to come to its senses and come along.

On January 10, 1917, President Woodrow Wilson found Alice Paul and a few dozen of her female followers standing silently outside the gates to the White House.  The held banners proclaiming their intended purpose:

“Mr. President, What Will You Do For Woman Suffrage?” and “How Long Must Women Wait for Liberty?”

President Wilson, always the gentleman, smiled and tipped his hat to the women as he came and went… on one cold and rainy day, invited the women in for tea.

In April, however, the United States entered World War I, and having a group of women protesting in front of the White House became an embarrassment to the president.  Police were told to arrest the protesters, and soon the sight of high-society ladies in manacles and prison garb being hauled off to serve time in prison was titillating the country.

Stories about the conditions in the prison started coming out in the press.  The food was said to be nauseating, with worms swimming in the soup and infesting the oatmeal, and the women complained of the prison officials being inhospitable, if you can imagine that.

In October, Alice Paul began serving a seven-month term and launched a hunger strike.  In response she was placed in the prison’s psychiatric ward, force-fed three times a day through a tube in her throat and awoken hourly throughout the night with a flashlight, all as the sounds of the truly insane echoed in the background. As one might imagine, it wasn’t long before President Wilson had quite the public relations problem on his hands.

In November, President Wilson pardoned all of the jailed women suffragists, and by the end of that year he came out in favor of a suffrage amendment to the Constitution.  The bill passed the senate in January of 1919, and on August 26, 1920, after two-thirds of the states had ratified the 19th Amendment to the U.S. Constitution, women had won the right to vote.

Of course, the story couldn’t end there either…

In 1961, Bob Moses, who had been teaching high school in New York, got an education on race relations when he went to Mississippi to work as a civil rights worker.  It was in August of that year, when Bob was walking over to the courthouse with two black men who wanted to register to vote. Three white males intercepted them and in a flash, Moses was on the ground, several gashes on his head courtesy of the handle of a knife.

Moses got up and continued on to the courthouse, but wouldn’t you know it, the office had already been closed for the day.  Speaking at a large gathering later that week, and with eight stitches in his head, he described Mississippi’s problem in very clear terms:

“The law down here is law made by white people, enforced by white people, for the benefit of white people. It will be that way until the Negroes begin to vote.”

Of course, the 14th Amendment to the Constitution, which was ratified in 1868, gave blacks in Mississippi and everywhere else in this country, the right to vote, but ever since then, every state in the South had found ways to keep blacks from exercising that right.

Some states required blacks to interpret obscure sections of their state constitutions.  Other states required black voters to pay half a week’s salary in order to register.  White voters in the same state, of course, were only required to sign their names.  So, Bob Moses and other members of the Student Nonviolent Coordinating Committee (SNCC) decided to come to Mississippi where they went door to door for three years in the hot sun, in an effort to get people to register.  During those years, reports of SNCC workers being arrested and beaten by police and/or others were filed every single week.

As of 1964, roughly 40 percent of black adults in the Southern states were registered to vote, but in Mississippi, that figure was 6.4 percent, the lowest of all.   In February of 1963, while driving along a dark road in the town of Greenwood, Mississippi, Moses and two other organizers had thirteen .45-caliber bullets tear into their car.  The car’s driver was wounded after being shot in the neck.

After three hard years, as the summer of 1964 was about to begin, their efforts to register blacks had produced just 4,000 new voters, but the soft-spoken Moses only stepped up his efforts.  Thinking that he would either reduce the violent attacks on the SNCC workers, or at least increase the amount of national media attention, he brought 900 volunteers down from the North to spend the summer in Mississippi registering blacks to vote.  The effort became known as “Freedom Summer”.

Freedom Summer started off with two white volunteers and a local black activist being killed, and the as Moses had hoped, the media descended on Mississippi now eager to report on the racial violence.  Across the country, Americans would now hear about the horrors being endured by blacks trying to exercise a right granted them almost 100 years before.

Northern liberals were enraged over the news stories of Southern racism, and within a year, President Lyndon B. Johnson signed the Voting Rights Act of 1965, thus committing the federal government to enforcing equal access to voting in the South.

Bob Moses returned to his home in New York.  He was said to be tired and frustrated, not only at the slow pace of progress, but also because of increasing tensions between the white and black activists. But, Unita Blackwell, a Mississippian inspired by Moses to register to vote that summer, said the following:
“For black people in Mississippi, Freedom Summer was the beginning of a whole new era.  People began to feel that they weren’t just helpless anymore.”

Bob Moses not only changed Mississippi that summer, he had pushed our country one step closer to realizing its founding vision.  It is because of Americans like Thomas Dorr, Alice Paul and without question, Bob Moses, that “a government of the people, by the people and for the people” today means: ALL the people.

May it never perish from this earth.  Amen.

So, did you vote yesterday?  I sure do hope so, because I’m counting on you to care enough about this nation to help save it.

The 2012 Presidential Election is right around the corner, and it’s likely the most important election in my lifetime.  I hope you’ll care more about it, than any other election in your lifetime.

“The people cannot be all, and always, well-informed.  If they remain quiet under such misconceptions, it is a lethargy, which is the forerunner of death to the public liberty.” Thomas Jefferson, 1787

Mandelman out.

Elizabeth Warren is the only person I’ve seen in Washington D.C. that is both aware of what consumers are facing today, and I believe truly cares about homeowners in this country. She gets it in ways that no one else in government does, and she appeared just a few days ago on PBS to talk about the new agency and the foreclosure crisis. And I found it breathtaking to watch, and hear what she she had to say.

She says…

“It’s about respect. I believe that the American people ought to be part of the conversation about what’s happening in our economy, and what’s happening in Washington D.C. and what’s happening on Wall Street. I truly believe that if the insiders get together and rewrite all the rules, those will be rules that will benefit the insiders and the rest of America will just be left out of it.”

She was asked whether she believes that Tim Geithner is right about the way he’s handling the commercial real estate meltdown that’s around the corner.  She responded by saying:

“We have not seen a strong response from Treasury. I hope he’s right, but I would feel better if I saw more action, if we saw some plans in place. It is our job in oversight not to say ‘Oh good, let’s relax!’ Our job in oversight is push and say these are problems, and show us what you’re doing here, and we do this on behalf of the American people.”

She described it as a downward spiral. (Sound familiar?) She knows what’s ahead and she knows it doesn’t look good. People… she is our one true real hope. We need her now, and if we can’t make her the President of the United States, we must make sure she is allowed to establish and lead the consumer protection agency of which she conceived. It is only because of her that the agency will exist, and to pretend that there is anyone else to lead it, would be a travesty and a tragedy on an historic scale.

I pray… literally pray… that all of you reading me take the time to write to the White House and to  your elected representative telling both that her appointment is the single most important thing to you… and to all of us.

At the end of her interview, and I hope you’ll watch every single second of it as it appears below… she admits that she doesn’t know whether it’s possible to push back against Wall Street’s power, and she admits that many have told her that it is not. But, I’ve never felt more in-sync with anyone as when she utters her last words, saying: “I don’t know. I just refuse to give up.”

I was told by someone inside the beltway, as they say, that Treasury Secretary Tim Geithner is still working hard to oppose her appointment to lead the new consumer protection agency. I’ve also been told that Larry Summers will also oppose her appointment.

These are the two guys who have bailed out the banks at every turn, and don’t want to see anyone question those banks, or limit what they’re allowed to do to us, in order to become solvent again.

The banks, however, are no more solvent today than they were a year ago. The toxic assets… remember the “toxic assets”… are right where they were in October of 2008. Geithner has not dealt with that problem. It is abundantly clear that his plan is to allow the banks to continue crippling our economy until they can make enough money to return to solvency.

But, and please listen when I say this, and go check it out for yourself if you don’t believe what I’m about to say… Japan took that approach and it took their banks over a DECADE. It could take our banks even longer.

My daughter is 14. How old are those that you love? We are literally staring down the barrel of a DECADE LONG GUN RIGHT NOW. Geithner cannot be allowed to continue doing what he’s doing to this country.

Last year, we spent more than $4 trillion propping up the banks, and we are no better off today than we were then. In fact, as everyone will know in a matter of months, if they don’t know it already, we are much worse off than we were a year ago.

It’s not just about the TARP for $700 billion, by the way. The TARP was just the beginning. The rest is not covered by the media, but you can look it up for yourself. Try Googling the following, because these are all programs Geithner and Summers and the Obama Administration have established and approved… quietly.

TLGP (Temporary Liquidity Guarantee Program) This was set up by Geithner and Bair. It guarantees certain types of debt issued by financial institutions, and deposits in certain accounts. Thousands of banks are participating in this program. ALLOCATED: $1.5 TRILLION

GSEP (Government Sponsored Entity Purchases) This was set up by Tim Geithner and Ben Bernanke. It allows the Federal Reserve to being purchasing the toxic debt issued by Fannie and Freddie. ALLOCATED: $1.4 TRILLION

CPFF (Commercial Paper Funding Facility) This program was established by Geithner to fund the commercial paper market after Lehman’s demise. Commercial paper can be thought of as short term loans that many large companies use to cover payrolls. It was funded by the Federal Reserve Bank of New York… Geithner was the President of the Federal reserve Bank of New York before becoming Treasury Secretary, by the way. They say this program is closed, but how do we really know? ALLOCATED: $1.4 TRILLION

TALF (Term Asset Backed Securities Loan Facility) Geithner and Bernanke set this up last year to loan money to banks that offer bundled loans to small businesses and consumers. The hope was that it would make it easier for people to get car loans, student loans, and other forms of credit. Did it work? Maybe a little, but it sure didn’t fix anything. ALLOCATED: $200 BILLION

TAF (Term Auction Facility) A program whereby the Federal Reserve auctioned funds to depository institutions. Bids are submitted by phone through local Federal Reserve banks, and all advances must be collateralized, but how do we know what’s passing for collateral these days. ALLOCATED: $600 BILLION

AMLF (Asset Backed Commercial Paper Mutual Fund Liquidity Facility) This program provides loans to banks so they can buy certain types of commercial paper from money market mutual funds. The goal of this program was to make it easier for the funds to pay the investors that wanted to cash out. ALLOCATED: $1.6 TRILLION

FEDS (Foreign Exchange Dollar Swaps) This is a program whereby the Federal Reserve goes around the world offering dollars to the European Central Bank, the Swiss National Bank, the Bank of England and other central banks. These banks can print Euros, Francs, Pounds, etc. but not dollars. The european banks give the Fed their own currencies to hold, and then lend the dollars to other banks in an attempt to ease the strain in those banks. ALLOCATED: UNREPORTED AMOUNT SPENT AS OF A YEAR AGO: $420.26 BILLION

PDCF (Primary Dealer Credit Facility) This is an overnight loan facility that provides funding to primary dealers in exchange for any tri-party-eligible collateral. The purpose is to keep the markets functioning. Loans are taken out for one day, but new loans can be taken out each day. ALLOCATED: UNREPORTED SPENT: UNREPORTED

Still think it’s all about the TARP funds?

People have called me and said… “But the banks paid back the TARP funds, doesn’t that mean they’re doing better?” And I’ve replied: No, I’m afraid not. It just means they wanted to have the restrictions on executive pay lifted, and only the TARP funds place such restrictions on the banks. The rest of the programs above don’t place any restrictions on anyone.

Tim Geithner and Larry Summers are directly responsible for the situation we are in today. It’s worsening and worsening faster than ever. Don’t wait until you actually feel the pain to take action, because by then it will be too late, if it isn’t already.

Oh, and stop listening to the double dip nonsense. It’s not true. We won’t have a double dip, because we never had a recovery. We’re in the same downward spiral we went into in 2007. Elizabeth Warren knows this, but she also knows that government cannot continue to abandon the American people as it pumps trillions into the banks who caused and are continuing to cause such monumental and intense pain. We need her now… we need balance, as much as we can get.

And just like I’ve said many times over the last two years… she won’t give up. Write to the White House, and to your elected representative today. Demand that Elizabeth Warren head up the new consumer protection agency… please.

Here’s she is being interviewed just three days ago on PBS. Please watch the whole thing. Thank you… Mandelman

Watch the full episode. See more Need To Know.

Are you watching this?  The South Carolina Democratic Primary was held last week and the winner, by a significant margin… Alvin Greene over Vic Rawl.

Vic Rawl graduated from the USC School of Law in 1973.  He and his wife Laura have been married 40 years and have one son, Vic Jr.  He was an officer in the S.C. National Guard for twenty-six years, serving as a Judge Advocate and retiring as a Lt. Colonel.  His law practice was open between 1973 and 1986, and he worked as a criminal prosecutor in 1976. He was elected to the South Carolina House of Representatives four times and served from 1977 to 1978 and from 1980-1986, for a total of eight years. From 1980 to 1986 he worked on the State Reorganization Commission, S. C. Housing Authority, and S.C. Prison Overcrowding Project. And he served as a Circuit Court Judge from 1991-2003.

So, basically Rawl’s a typical politician who wanted the people of South Carolina to send him to Washington to serve in the United States Senate for the next six years.  Unfortunately, the people of South Carolina said no, but thank you for playing… and all eyes turned to Mr. Greene.

Out of a total of 170,215 votes cast, 100,362 went to Greene and 69,853 went to Vic Rawl.  Voter turnout in most counties was in the range of 20-30%.  Greene didn’t just win… he crushed his opponent winning 60% of the vote.  A “mandate,” I believe is what they like to call that, right?

There was only little problem with the outcome, and both the politicians and the media started asking questions as soon as the results were in… Who the hell is Alvin Greene?  The problem continues to be that no one has a real clear answer to that question.

South Carolina Democratic Party chairwoman Carol Fowler said she had not seen Greene since he filed to run.  Clarendon County Democratic Party Chairman Cal Land told a local newspaper that local party leaders had not met Greene, that he had not attended any local Democratic events and had not responded to any invitations to local stump meetings.

Apparently, Greene, who is currently unemployed, lives at home with his father.  He has no experience.  He has no staff or campaign headquarters.  He had no slogan and ran no advertising. He received no support from the Democratic Party, and no contributions from supporters. He held no rallies.  No buttons. No lawn signs.  No bumper stickers.  No Website.  No computer. No cell phone. No phone, no pool, and no pets.

However, it’s not like Greene has nothing in common with his would be fellow senators. The day after the primary election, the media reported that Greene was facing felony obscenity charges.   Apparently, Greene was arrested in November 2009, charged with showing a pornographic Internet site to an 18-year-old female University of South Carolina student and then propositioning her in a computer lab.  I realize that, traditionally, senators wait until they’ve been elected to rack up their first felony obscenity charge, but that just makes Greene an overachiever in my mind.

Now… when I first read about Greene’s victory I thought it was kind of funny and kind of sad.  But, then the Democrats and media pundits gave me more than I could have possibly asked for as they started asking questions and attacking their party primary’s victor.

South Carolina Democratic Rep. James Clyburn kicked off the festivities with claims that “someone,” and by “someone” he means someone from the Republican Party, inserted Greene as a “plant” into the Democratic primary as part of the RNC’s plot to ruin Democratic chances in the November elections.  Obviously, someone’s a plant alright… a potted plant… South Carolina Democratic Rep. James Clyburn, or at least he’s got a similar I.Q.

MSNBC’s Keith Olbermann really wanted to know where Greene got the $10,000 needed to enter the race?  According to Keith, Alvin Greene filed as an indigent in South Carolina in order to get a public defender related to his felony obscenity charge, but he had $10,400 for a shot at the United States Senate. Greene said that he originally got the idea to run for office in 2008 when he was stationed in Korea, and that he paid the filing fee by saving two years of his service pay.

That was Keith’s big question… where did he get the ten grand?  That’s the problem here?  Gee, and here I would have thought that the Dems would have hung their heads in disgrace at how disconnected the electorate obviously is that they’ll vote for ANYONE that’s not a “politician”.  Like, not only did Rawls lose to Greene, but he probably would have lost to “Blue” too. And I mean the color blue.

Keith, why didn’t you have Alvin Greene on your show during the primary, or at least look into him during the race?  Or, did you just see an African American Democrat running and assume everything was fine?  And where in the world is the Obama Administration?  Isn’t there some Harvard type in charge of watching the Democratic primaries, leading up to this coming November’s all-important midterms?

Looking for Blame in All the Wrong Places…

Democrats looking to place blame for Greene’s victory is, in itself, comical.  That they don’t know why Greene won is similarly, laughable.  I don’t see how it could be made any clearer that people went to the polls dissatisfied at the status quo, and angry enough to check the box marked “Other”.  And, as I’ve said many times before, there are millions of people all across this country that have been shown just how powerless they are, will soon reassert their power in the privacy of the voting booth.

We’ve lost 7 million homes over the last few years and there are tens of millions of Americans all too aware that they could soon join those undistinguished ranks.  It’s not something that polls well, however, as there are few that care to admit publicly that they are at risk of losing their homes.  As a result, how these millions of Americans feel about their country continues to be ignored by our elected representatives.

On Sunday morning, NBC’s David Gregory asked senior White House adviser David Axelrod if Greene’s election was legitimate.  Axelrod replied: “The whole thing is odd. I don’t really know how to explain it and I don’t think anybody else does either. … How [Greene] won the primary is a big mystery, and until you resolve that I don’t think he can claim to be a strong, credible candidate.”

All totaled up, most political observers are blaming some blend of faulty voting machines, foul play by political opponents, and the fact that Greene comes before Rawls when listed alphabetically.  South Carolina State Senator Robert Ford claimed that the surname “Greene” is common among African Americans, so that may have caused African American voters to identify with him, which makes sense.  Ford, after all, garnered most of his support because everyone knows how much African Americans love to drive Fords.

There’s even speculation that African American voters confused the candidate with soul singer Al Green, which is just hysterical on one hand and, I would imagine, unbelievably insulting to these voters on the other.

First of all, let’s get one thing out of the way: I hope the RNC planted Green into the race, because that would demonstrate to me that they do have some sense of humor and I might pay a little more attention to them going forward… but there’s no chance they planted Greene or anyone else for that matter.  Why?  Because it makes no sense that anyone would have done so, that’s why.

Why in the world would the RNC plant an unknown into a political race who doesn’t campaign, has no rallies, runs no advertising, raises no money, garners no party support, and ostensibly has absolutely no chance of winning?  And more than just that… no one even knew he was there… until he won, that is.

Great strategy, Republicans.  What else can you spend time and money on this year that has essentially no chance of ever being noticed by anyone?  It’s positively brilliant!

I started watching a few interviews with Greene, and they all went something like this:

INTERVIEWER: “How do you think people heard of your name before the election?”

ALVIN GREENE: (pause) “… uh, Word of mouth. I got the word around. It’s not luck. 60% of the vote…” (pause) “… I had 60% of the vote…” (pause) “60% of the vote is not luck, that’s a decisive wins”.

Journalist Scott Creighton wrote that he thinks Greene is basically playing the role of Forrest Gump.  He believes that evil Republicans planted Greene into the race, and he bases his argument on a TV interview in which Greene is unfamiliar with the term “indictment”.

“Alvin Greene is pretending to be an idiot,” Creighton writes, noting that Greene holds a college degree and worked as an intelligence specialist in the US military. “He is doing it because someone doesn’t want a strong populist democrat like Vic Rawl running against Jim DeMint in South Carolina for his seat in the United States Senate.”

What’s this… a college degree?  The plot thickens.

And sure enough, Alvin Greene received a bachelor’s degree from the University of South Carolina in Political Science in 2000 and he rose to the position of Intelligence Specialist during his military career.

The University of South Carolina confirms that Greene graduated in 2000 with a degree in political science. The Pentagon confirms that he served in the Army, and in the Army and Air Force national guards. Although Greene has not boasted of winning awards, the Pentagon says he was granted the Air Force Good Conduct Medal, National Defense Service Medal, Global War on Terrorism Service Medal and Korean Defense Service Medal. MSNBC

Olbermann asked Greene if he planned to withdraw from the race, and Greene said… without hesitation, no way, he’s in it for the long haul, announcing that:

“The Democratic Party has chosen their nominee, and we have to stand behind their choice. The people have spoken. We need to be pro-South Carolina, not anti-Greene.”

Here here!  Vote for Alvin!

Well, I’ve decided that I’m pro-Greene.  In fact, I’m going to volunteer to help with his campaign, so in preparation for that job, I’ve taken the liberty of putting together a platform that I believe will resonate with the people of South Carolina, as well as with Americans from coast to coast.

• On the topic of BP in the Gulf of Mexico, Greene says: “Clean that sh#t up!”
• On Wall Street bankers and the financial crisis, Greene says: “Clean that sh#t up!”
• On the wars in Afghanistan and Iraq, Greene says: “Clean that sh#t up!”
• On the ongoing foreclosure crisis, Green says: “Clean that sh#t up!”
• On the topic of unemployment, Greene says: “Clean that sh#t up!”
• On transparency at the Federal Reserve and Treasury, Greene says: “Clean that sh#t up!”
• On illegal immigration Greene says: “Clean that sh#t up!”
• Campaign reform?  “Clean that sh#t up!”

See what I mean?  Which one of his positions don’t you agree with?

If elected, Greene would be the first African-American in the Southern United States to win a seat in U.S. Senate since Reconstruction in the 1870s, and the first popularly elected African-American Senator from the South… ever!

Greene says he’s a moderate Democrat.  His new campaign slogan is “Let’s get South Carolina back to work.”  He supports offshore drilling.  He supports reform of the financial industry. He supports job creation and would increase highway construction projects and pursue alternative energy sources. He has called for better school facilities and increasing pay for teachers. Greene favors winding down the wars the Middle East and “using that money for domestic programs, such as job creation, education, and Social Security. And, as to firearms, Greene said he supports the Constitution.”
Regardless of any of the preceding facts, South Carolina Democratic Party chairwoman Carol Fowler issued a statement calling for Greene to drop out of the race:

“We are proud to have nominated a Democratic ticket this year that, with the apparent exception of Mr. Greene, reflects South Carolina’s values. Our candidates want to give this state a new beginning without the drama and irresponsibility of the past 8 years, and the charges against Mr. Greene indicate that he cannot contribute to that new beginning. I hope he will see the wisdom of leaving the race.”

Don’t listen to her Alvin!  Stay in there and hang tough… help is on its way.  I’m in all the way.  You’re not alone, by the way.  We’ve already seen a number of long-time politicos get tossed out by the primaries.

2010 Primaries – Upsetting the Incumbents

In New Jersey, former NFL lineman Jon Runyan, 36, won the GOP primary and used his outsider status to trounce his opponent.

“People always question my experience in politics,” Runyan said in his victory speech.  “Yes, I have no experience raising taxes over and over again. Yes, I have no experience increasing the debt. Do you really think the people who created these problems are going to be able to solve them?”

In South Dakota 38-year-old state Rep. Kristi Noem, who is a rancher and hunting lodge owner scored an upset victory over the better-known Secretary of State Chris Nelson.

Republican Sen. Bob Bennett was thrown out of office Saturday by delegates at the Utah GOP convention in a stunning defeat for a once-popular three-term incumbent. West Virginia Democratic Rep. Alan Mollohan lost his bid for a 15th term at the hands of Mike Oliverio, and if that doesn’t say “throw the incumbents out,” nothing does.

According to a CBS poll taken 10 days ago, only 9 per cent of Americans think “most members of Congress deserve re-election”.  More than 80 per cent want “new people”.  New people… I love new people.  They’re so cute and cuddly, and they drool… Yay, for new people!

Want to see what I’m saying slap someone in the face?  Then stand by in Nevada, which has the highest home foreclosure rate in the US.  When incumbent Senate Democratic majority leader Harry Reid won out over the two lovely ladies that ran against him, well… he probably fainted.

And keep in mind who Reid against.  Former beauty queen, Sue Lowden, who recently suggested patients could barter with their doctors as they did in the “olden days”. And her opponent, Sharron Angle, a Tea Party darling who is known for her position on drug therapy for prisoners recommended by the Church of Scientology. It includes massage.

I’m not sure what Alvin Greene’s position on massage is, but as far as his position on Harry Reid goes, Alvin says: “Clean that sh#t up!”

ALVIN GREENE

FOR US SENATE!

HE KNOWS HOW TO CLEAN THAT SH#T UP!

Watch this video!  I’m Serious…

First of all, who in the world is this woman?  Until today, I couldn’t pick CNBC’s Diana Olick out of a line up.

In case you don’t watch the inane and oftentimes innumerate drivel on CNBC either, apparently Diana Olick is one of those “news chicks” that the network feels it has to put on in order to offset the balding, pudgy business-geeks that live in those little talking head boxes that seem to run nonstop all day long.  You know, the ones on which you can make a decent living just by buying whatever stock they’re selling, and selling whatever they say is sure to go up.  Yeah, those guys…

Well, yesterday Diana Olick reported that:

“All it took was one bad home sales report to turn the tide of sentiment from ebullient housing recovery to double dip doom.”

So, there you have it.  I guess the “tide of sentiment” has turned then.  I promise to stop being “ebullient” immediately and start preparing for “double dip doom”.  I’m sorry, but who the hell writes like that?  Ebullient?  Seriously?

Diana says she and everyone else saw the whole housing slowdown coming a mile away…

“Look, we all knew it was coming; home sales were spiked by several shots of government stimulus in the second half of 2009, and as that stimulus starts to wear off, sales activity has nowhere to go but down.”

Yes, I suppose it’s true that some of us didn’t buy into the housing-is-back nonsense, but how does stimulus “start” to wear off.  Isn’t April 30^th when the first-time-and-more housing stimulus actually ends?  I wasn’t aware that when a tax credit program ends on April 30^th, it “starts to wear off” right after New Years.  Fascinating stuff, Diana… please, do go on…

“The extension and expansion of the first time home buyer tax credit gave buyers breathing room to sit back and think about whether they really want to jump into this market now.”

Then it’s working as planned, because I distinctly remember Obama saying that he wanted to extend and expand the tax credit stimulus program for two key reasons: 1. To give buyers some much needed breathing room.  2. So those buyers could sit back, relax… and think.

Okay, Ms. Diana Olick… what else you got…

“Unfortunately, the credit expires just as the real spring season, and its potential embedded optimism, begins (April 30th), and that’s not the half of it.”

Is that when the “real” spring season begins?  Damn.  Hang on s sec, I have to reset my wrist calendar.  I am looking forward to some of that good old “potential embedded optimism” that the real spring so often brings.  A lot of people don’t know that about me, but I am a huge fan of “potential embedded optimism”.  Huge.

Then Diana explains that…

“The next conundrum is the end of the Federal Reserve’s $1.25 trillion mortgage backed securities purchase program.”

That’s the next “conundrum”?  And it’s coming up so soon?  Damn.  I hadn’t realized we were already done with the last conundrum.  I swear, it went by so fast, I barely had time to look confused.

Then she shared her biggest concern:

“But what concerns me most is this new bandwagon driving through the foreclosure crisis.”

Don’t laugh at her.  There are quite a few people with a real fear of bandwagons, and we should all try to be more understanding of their irrational silliness. I can’t believe I missed it, can you?  I mean, I watch the foreclosure crisis all the time… every day… and I’m sure I would have at least seen a bandwagon coming through, if not jumped on it.  She says that she’s starting to hear chatter about principal reductions, but not too worry, because she says the arguments pro and con are simple.

“The idea is to give folks equity back in their homes so they don’t walk away from their mortgage commitments. It would also help borrowers who don’t qualify for modifications because they are so far “underwater” on their mortgages. The arguments are plain and simple: Bite the bullet to save the greater housing market or don’t because the moral hazard is far too untenable.”

Yes, I suppose that’s about right, although I might phrase it somewhat differently.  The idea behind principal reductions is to prevent the United States banking system from imploding, and to prevent the deflationary spiral we’ve been in for the last two years from becoming a full scale depression from which we are unlikely to recover from for, as Paul Krugman (winner of the Nobel Memorial Prize in Economics, 2008) said recently… 18 years or longer.  But, I think we mean the same thing.

Then she said something so chilling that the temperature in my study dropped by 14 degrees, and our Goldfish jumped from his bowl to his certain death…

“I would honestly rather see my home’s value go down than see the guy next door… who made a poor/negligent financial decision get a mulligan at my expense.”

Okay, so the rest of this article is just directed at male readers.  Ladies, if you wouldn’t mind just clicking off to something else… there’s articles over for the fairer sex… thank you…

Guys… are we alone?  Okay, cool…

Oh my God… did you read what that CNBC business witch just said?  How would you like to be waking up next to her every day?  No thank you.  Can you imagine what her husband is thinking tonight?  That dude probably could not sleep all night long; he’s on eggshells for the rest of his damn life.  Do you think he knew she was like that before they got married?  Doubt it.

Olick’s husband has got to be lying in bed tonight thinking… “I can’t believe she just said that… and she really meant it too… she’d rather see the entire ship go down than see her neighbor get saved?  What an uber bitch!  If we ever end up getting divorced I’m a dead man.  And I had children with this woman?  Oh shit.”

Don’t worry, Diana Olick’s husband.  Maybe you’ll get lucky and one of your close friends will see you suffering and take you out with a shovel to the back of the head while you’re looking the other way. It could happen… and it’s okay to dream.

And where’s the guy who did this to Diana?  Dude… what on earth did you do that resulted in a journalist version of Cruella Deville?  Dump her for her best friend while you were with her at the Prom?  Date her mom after her?  Get caught slogging her sister in her bed?  Whatever you did, something went terribly wrong, because this chick gives the gift that keeps on giving: emotional baggage.

Now that I think about it… I think I’ve seen her before.  She looks just like a dominatrix I saw advertised online named “Ilsa… She-Wolf of the SS.”  Splittin’ image I’m telling you… Ilsa seemed a tad more compassionate, but other than that they could have been twins.

Please God… let this woman lose her home so that she may come to understand what a nasty, insensitive and wretched woman she has otherwise been… Amen.

Was I being too subtle?

When I was a young boy, they used to say: “What’s good for General Motors is good for this country.” Back then my uncle was a Ford man, my father a GM man, and all I knew for certain was that like two parallel lines, the two would never intersect.

Then 1973 rolled around and all of a sudden General Motors, Ford, Chrysler and American Motors… the Big 4, if you can remember that far back… all seemed terribly out of step with what was going on in the world. Their cars got terrible gas mileage and leaked oil and besides all that, their executives still looked like they were living in the 1950s.

The stock market wasn’t “the big thing” back then. The Dow Jones Industrial Average was about as exciting as watching them give haircuts on Saturday. In 1966 it crossed the 995 mark, and it was November of 1973 before it broke 1,000 for the first time ever, only to go crashing back to 577 in December of 1974. Not exactly the stuff of which Hollywood movies are made. The DOW wouldn’t cross the 1,000 mark again until late in 1982.

When Ronald Reagan was inaugurated in January of 1981, we were about to finish up a 16 year bear market that had begin in 1966 and wouldn’t end until 1982.

On January 1, 1980, the DOW opened at 759.13, and from that point forward, albeit with a few bumps along the way, our stock market went straight up, closing at 11,497 by the end of 1999. There are an awful lot of people who attempt to explain this meteoric ascent. Many people credit Reagan’s economic policies, which included reducing taxes to some degree, increasing defense spending, and generally deregulating things. I’ve never been sure how much one thing accomplished over another, and I’ve always wondered whether it wasn’t mostly the demographics of the baby boom population that drove our growth, but whatever it was… from 1982 forward, Wall Street was on the move.

I was a Yuppie in the 1980s when things changed. Spaghetti turned into “pasta”. Sherbet became “sorbet”. Greed was, in a way, good. And from that point forward “they” said: “What’s good for Wall Street is good for America,” and “You can’t have Main Street without Wall Street”. In fact, over the last thirty years, this type of thinking became a part of our culture in this country. Wall Street was the place everyone wanted to be.

Today, of course, the bloom has come off of the rose, to say the least. I have always said that there are only two things that lead to true learning… age and pain, and although we’ve seen two or three other costly bubbles along the way, the demise of this last one has already caused enough pain to teach us something and stay with us for quite some time. Right? Or has it?

As I’ve watched the economy deteriorate over the last two years, I have been amazed and bewildered at our government’s response, or lack thereof. And the more I’ve learned, the worse I’ve felt about our ability to fix what has been so badly and obviously broken beyond repair.

Nine months ago, everyone agreed that our banking system was not functioning. We needed to pump $350 billion into the banks and now, or the world as we knew it would soon come to an end. So, we came up with the TARP. It was supposed to buy “troubled assets,” hence the ‘T’ and the ‘A’. But that didn’t work out, because Paulson couldn’t arrive at price for assets that are still impossible to gauge, and losing value every day. The banks wanted 100 cents on the dollar for these “toxic assets,” so Paulson decided the only thing to do to inject the necessary capital into the failed financial institutions was to buy preferred shares in the insolvent banks.

Then we were going to have some sort of TALF program, but that didn’t really work out either. And then it was the PPIP… the Public Private Investment Partnership… until that too, died on the vine. The Wall Street Journal (“WSJ”) even reported that two of the government agencies that are supposed to be singing out of the same hymn book are not in agreement at all.

According to the WSJ…

A government program designed to rid banks of bad loans, part of a broader effort once viewed as central to tackling the financial crisis, is stalling and may soon be put on hold, according to people familiar with the matter.

The Legacy Loans Program, being crafted by the Federal Deposit Insurance Corp., is part of the $1 trillion Public Private Investment Program the Obama administration announced in March as a way to encourage banks to sell securities and loans weighing on their balance sheets to willing investors.

But prospective buyers and sellers have expressed reluctance to the FDIC about participating for fear the program’s rules will change in a political atmosphere hostile to Wall Street. In addition, some banks that might have sold troubled loans into the program earlier in the year have become less eager as they regained a sense of stability.

Senior Treasury officials weren’t keen on the FDIC’s program because of the large gap between potential buyers and sellers. In fact, some Treasury officials didn’t want the FDIC program to even be created.

Now I have no idea what we’re planning to do. All I know, if I listen to Secretary Geithner or President Obama is that things are looking up. I also know that they are both completely full of malarkey.

What caused the banks to have a “regained a sense of stability?” We haven’t done or changed a Goddamned thing since the TARP except let the banks repay some TARP funds so they can use the FDIC loan guarantees to pay themselves huge bonuses again this year? Seriously? It’s downright embarrassing.

The S&P 500 has rallied 40% from its March lows. Fed officials and many others have been talking up the economy and there has been talk of “green shoots” appearing in the economy. Some economists are projecting a recovery in the second half of this year.

Despite rallies in the stock markets and talk of recovery, the recent Global Financial Stability Report by the IMF states that economies of the developed world will experience a deeper protracted recession due to further deterioration in residential and commercial real estate markets, tight lending conditions and rising defaults in corporate and consumer loans.

Futures are pointing to further declines in the US and UK residential mortgages of both prime and sub-prime loans. Loan workout programs and foreclosure moratoriums have failed to reverse the decline in the housing market. The charge-off rates in the U.S. residential real estate market is projected to peak in late 2010. Commercial mortgages are projected to follow the residential markets and have already begun to worsen in the US and UK.

So, what have we done to change things? What have we put in place to make sure what happened doesn’t happen again? How have we changed how the banking industry operates? We haven’t changed a damn thing. We put some limits on executive compensation for four months or so, but other than that, what?

The banking lobbies sure look stronger than ever… essentially more than capable of leaping tall buildings in a single bound. The Obama administration certainly ran like the dickens in every confrontation with the financial sector that’s presented itself thus far. Bankruptcy reform, the credit card bill, loan modifications, lending… what the banks want, it would seem, the banks get… the country’s best interests be damned.

In conducting the research for this piece, I came across one of the best articles I’ve ever read. Simon Johnson, a former chief economist from the International Monetary Fund, wrote it, and it appeared in The Atlantic in May of this year. (I actually read Mr. Johnson’s blog, The Baseline Scenario religiously, but never knew that it was him that I was reading.) The title of the article is The Quiet Coup, and it’s introductory paragraph changed my whole year…

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government-a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Johnson has been very critical of the Obama Administration for caving in to financial interests and he continues his criticism:

The real news is that the administration does not want to take on these financial lobbies. Why exactly they are ducking any confrontation is open to debate — particularly as these same lobbies helped get us into the crisis, for example, by opposing regulation of derivatives.

So, do you see the picture? The banks gain immense political power over a thirty-year bull market, as they become part of our cultural elite. Then they screw the pooch. Drop the ball. Come up short. Okay, they break the world, and it becomes abundantly apparent to any objective and even slightly knowledgeable observer that reforms are needed and compromises need to be made if we are to right the ship that they have capsized.

But they still have a lot of political power and money, and we’ve grown to believe that what’s good for Wall Street is good for Main Street. And as if that wasn’t enough, many of the people in government came from Wall Street and are likely to return to those jobs after serving in government.

The problem is that what they want is a return to the status quo and we the people should realize that we absolutely cannot allow them to direct the policies that will restore our economic prosperity or at least stop our downward slide. They are not out for “us”. They are only out for “them”. Everyone knows that, right?

In “The Quiet Coup,” Johnson writes:

Elite business interests-financiers, in the case of the U.S.-played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

And a few paragraphs later:

The great wealth that the financial sector created and concentrated gave bankers enormous political weight-a weight not seen in the U.S. since the era of J.P. Morgan. In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

And then…

The American financial industry gained political power by amassing a kind of cultural capital-a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country.

(Hey, that’s what I said… he’s stealing my thinking…)

The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

And finally…

Wall Street is a very seductive place, imbued with an air of power. Its executives truly believe that they control the levers that make the world go round. A civil servant from Washington invited into their conference rooms, even if just for a meeting, could be forgiven for falling under their sway.

Alright, this guy’s starting to freak me out. The Wall Street bankers are Bond villains… like Goldfinger… I get it. So, what can we do?

Well, now that’s the good news. That’s where the good old Founding Fathers come in. You see.. it really is our country. We’re actually in control. We leave most things to “them” that we elected, but lest anyone ever forget… I can only say… remember the AIG bonuses…

Honey, would you prefer a pitchfork or a torch?”

“I think I’ll have a pitchfork this time out, dear. I carried the torch last time.”

We can force the issue here and our representatives will stand up to the banking industry lobbyists because they will have no choice but to do so. Our elected representatives may want the banking lobby’s money, but they want voters even more. And when they hear our voice in unison, they perk right up. They passed the 90% AIG Bonus Tax in under a week. Seriously. I went to lunch and we had a new bill on the floor of the House. It was amazing. I had no idea they could move that quickly anymore.

In fact, our outrage over the AIG bonuses caused congress to move faster than I’ve ever seen it move in my lifetime… faster than they moved after 9/11, for heaven’s sake. They saw us all screaming the same thing in 200 million-part harmony and that was it. Presto chango!

The Website Seeking Alpha reported the following on June 14^th. The added emphasis is my own.

Bank Optimism: Too Much, Too Fast

Signs are emerging that optimism in the financial services sector may be misplaced, or at least, premature.

It’s no secret that banks have been eschewing government aid. But, in the tradition of these giant money machines, they seem to be doing so again at the expense of their long-term security – all for the sake of quarterly earnings results.

Take for example, the approval by the Treasury Department for 10 banks to repay their TARP loans more or less ahead of schedule. Rortybomb points out that the big banks may need as much as $390 billion in the worst case scenario, according to a model using rising unemployment statistics

I was actually surprised – I assume turning up the numbers a bit would cause everything to start leaking red ink. Instead it seems that if there is an additional slight downturn in the economy, we know the firms that will have all the problems. They are the ones that are too big to fail. Funny that.

Tuesday, it was reported there that the congressional panel overseeing TARP repayments gave rising unemployment statistics as the number one reason why banks should be “retested” for capital adequacy requirements. That argument was compounded by the issue that Treasury ONLY tested the banks on a hypothetical 2-year scenario.

Most recently, there’s talk of the Private Public Investment Program (PPIP) coming apart at the seams, as banks reject the possibility of marking-down the value of their toxic assets in order to sell them for cents on the dollar. Such a plan, argue banks, would force many of them to declare themselves severely financially hampered in the immediate term, since a price-floor for the securities they hold on their balance sheets would be set by the fire-sale of their assets.

Actually, banks have more or less done exactly the opposite of what the PPIP would ensure. First quarter earnings results showed that banks were not only applying the “fair value” rule of accounting for their toxic assets pretty liberally, but even declaring multi-billion dollar losses as windfall gains.

Part of the potential future problem for banks has, ironically, been their own good fortune lately in the stock market. Reuters’ Felix Salmon puts it pretty succinctly:

The market loved this idea that assets at banks would finally have a certain value, and started going up rather than down, to the point at which people weren’t scared any more about the amount of toxic assets on banks’ balance sheets. And so it didn’t matter that the adverse scenario in the stress tests is looking positively sunny these days. And it didn’t matter that PPIP disappeared with a whimper, the toxic assets no more priced now than they were six months ago. So long as the stock markets are happy, what’s to worry about?

Now that the stock market is surging, the banks are back to old tricks: generating the best possible quarterly earnings reports in order to play catch-up with expectations.

It’s true that banks are seeing signs of an increase in inter-bank lending and business in general, and that confidence has played a big part in getting that going again. It would also be dangerous to abruptly let the air out of consumer and investor optimism.

But confidence and expectations can only provide price support for so long, before the banks will be forced again into having to assume another round of loans. That scenario may put banking in even worse a scenario than the one it found itself in, in the first place.

Even a few Senators have been surprised at the power that has been amassed by the banking lobby over the last three decades.

“It’s hard to believe in a time when we’re facing a banking crisis that many of the banks created – they are still the most powerful lobby on Capitol Hill. And frankly, they own the place.”

That was Sen. Dick Durbin speaking bitterly on his hometown’s radio program following the defeat of bankruptcy reform. At the end of the proverbial day, the battle was lost because twelve democrats signed on with the Republicans to vote for the bankers, and against the interests of families who are struggling to save their homes and might have been able to in bankruptcy. Senators Baucus, Bennett, Byrd, Carper, Dorgan, Johnson, Landrieu, Lincoln, Ben Nelson, Pryor, Specter and Tester all voted with the Republicans… I mean with the banking lobby.

As a presidential candidate, Obama chose not to support bankruptcy reform, but he did promise that he would support it if he were elected.

The bankruptcy reform legislation would have changed things. The power would have shifted a little bit to the borrower in the best interests of the country, because if the bank refused to deal, the homeowner could turn to the bankruptcy court for possible relief. It was estimated that 1.5 million homes would be have been saved from foreclosure if the bill passed.

But the president wouldn’t allow the bankruptcy provision to be included in the stimulus or in the first budget. The administration suggested that it could proceed as a stand-alone measure, which is a Washington D.C. euphemism for “guaranteed to fail”. In other words, President Obama ran like the dickens when faced with having to stand up and be counted by those in the all-powerful banking industry.

As William Greider pointed out in his recently published book, “Come Home America“:

Given all of the adversities facing the country, I conclude that meaningful intervention is plausible only if it originates with people at large who are more distant from power. I envision the intrusion coming from “independent formations” free to ignore Washington’s insider routines and mobilized by citizens on behalf of their own convictions, their common sense ideas of what needs to be accomplished.

Okay, that one gave me chills… because that’s what I’ve been thinking too. This isn’t the time to molly coddle bullies because of some inappropriate amount of political power they seem to have amassed while we were out shopping. This is the United States of America… the land of the free and the home of the brave… my country. And they can’t have it… certainly not without a fight.

William Greider has been a reporter and best-selling author for some 40 years. He’s been everywhere during that time, from the White House to Wall Street. His career has included writing for newspapers small and large, magazines, public television and books. Greider writes about capitalism and democracy and explains how these two are “in collision”.

Greider joined the national staff of the Washington Post in 1968 and was a correspondent for a dozen years, eventually becoming the assistant managing editor directing national coverage. He even wrote a weekly column called “Against the Grain.” I like this guy.

On June 9^th, Greider wrote an article titled: We’re Screwed on Everything From Health Care to the Economy If the Dems Don’t Shape Up, which appeared in The Nation, our nation’s oldest and largest weekly.

Here’s what he said in the opening paragraphs:

The governing party faced an awkward dilemma. People were hurting and furious at the government’s generous bailouts for banks. But how could the Democrats do something for the folks without upsetting their friends and patrons in the banking industry? Democrats think they found a way. They are enacting a series of measures described as “breakthrough” reform and “unprecedented” defeat for the bankers. Only these achievements are more accurately understood as “reform lite.” The house is on fire and Democrats brought a garden hose.

“This crisis brought down the world economy and yet Congress still hasn’t passed a bill making sure it doesn’t happen again.”

Julia Gordon, a lawyer with the Center for Responsible Lending said: ” When we look back at the foreclosure tsunami that devastated so many families, we’re going to be ashamed that we did not fix the bankruptcy code to permit mortgage modification. That move alone could have prevented more than a million foreclosures, and while I predict we will revisit the issue in the future, it will be like closing the barn door after the horse has died.”

If not now, when? That question ought to haunt the Democratic Party and President Obama, who has been missing in action himself on key issues. Congressional Democrats are responding to this epic conflagration with the same risk-avoidance tactics they learned during many years in minority status.

In those days, they could always blame right-wing Republicans for blocking their good intentions. But whom do the Dems blame now that they have the White House and fifty-nine votes in the Senate and a seventy-eight-seat majority in the House? Their standard explanation for not doing more is, “We didn’t have the votes.” So when might we expect Democrats to achieve more? When they have eighty votes in the Senate?

The much-celebrated “Credit Cardholders’ Bill of Rights” is a fresh example of how the Democratic Party tries to have it both ways — avoiding the tough votes while mollifying the folks. The credit card reform measure imposes new rules on the industry and does away with many of the most outrageous gimmicks bankers use to extract more money from debtors. Banks cannot raise interest rates retroactively on old credit card balances or pile on hidden fees or fail to give advance notice for rate increases. These and other changes are worthy.

The achievement seems less courageous if you know that Congress was largely ratifying the regulatory rules already adopted by the Federal Reserve last year. Or that the legislation gives the industry another nine months to gouge their customers before the new rules go into effect. Or that Visa and MasterCard, Citigroup and JPMorgan Chase are free to raise future interest rates to the sky — without limit. That is the industry’s intention, as bank lobbyists reported after the bill was passed.

But that’s “usury, ” isn’t it? Of course it is… Greider continued…

The straightforward way to stop usury is to enact a hard legal limit on the interest rates creditors can charge borrowers. In the House, several legislators introduced interest-rate caps, but party leaders would not let the issue get a roll call vote. Rep. Maurice Hinchey of New York and co-sponsors proposed an interest-rate cap of 18 percent, the same ceiling enacted years ago for credit unions. “Offering the amendment raised a lot of anxiety on the part of a lot of people,” Hinchey said.

“It was withdrawn because it had no possibility of success and it would have put a number of people in a tough situation. We had to back off.”

A roll call on usury would have compelled legislators to choose between their constituents and their bankers. Rep. Donna Edwards of Maryland proposed a tougher ceiling on interest rates, but the House rules committee rejected her amendment. “Our constituents are so angry with the banks,” she observed, “siding with credit-card companies would not be helpful to me, and I expect that’s true in other districts.”

Bankers are contributors, so this is what members call “a money vote.” A consumer lobbyist explained. “Let’s face it,” he said. “The main reason lots of members get on the House Financial Services Committee is because they want to raise money from the financial industry.”

In the Senate, Dick Durbin of Illinois, the majority whip who rounds up votes for the party, introduced his own usury bill — a cap of 36 percent including the non-interest fees and charges. Durbin’s bill also empowered state governments to set lower limits. The Consumer Federation of America endorsed it, but the consumer lobbyists asked Durbin not to have a roll call on his measure because it might reveal their weakness.

Nevertheless, the redoubtable Bernie Sanders of Vermont demanded a vote on his bill — an interest-rate cap of 15 percent.

“When banks are charging 30 percent interest rates, they are not making credit available,” Sanders said. “They are engaged in loan sharking.” Sanders lost, 33 to 60. Twenty-one Democrats voted with the sharks. Senators Carper, Cantwell, Byrd, Bingaman, Bayh, Baucus, Akaka, Warner, Tester, Stabenow, Specter, Shaheen, Pryor, Ben Nelson, Murray, Lincoln, Landrieu, Kaufman, Johnson, Hagan.

The scandal of “payday” lending is being confronted by numerous state legislatures, but the issue stalled out in Congress. The industry pursued a race-based lobbying strategy that targeted black and Hispanic representatives with this pitch — poor people need these loans; don’t mess with them. Rep. Luis Gutierrez of Illinois proposed a bill that usurers found acceptable — an interest rate cap of 390 percent! (Emphasis mine, but can you blame me?)

In some ways, the politicians are prisoners too — captives of the money politics and the expensive mass-marketing that requires them to raise so much money and thus rely on the moneyed interests.

Representatives and senators know how the system works and what they need to do to survive. Now and then, they may try to win one for the folks, but mostly they are resigned to the confinements of the status quo. So long as activist groups will make no attempt to break out of this pattern or penalize incumbents for disloyalty, the party will continue to stiff the faithful.

These groups could function, not as a third party nor as standard “issue” advocates, but as a mixture of these capabilities. They could act like free-roaming guerillas who educate and agitate; like a political party that selectively destabilizes safe-seat incumbents by entering party primaries or running independent challengers; like a representative organization that can demand political relations through direct confrontations or even civil disobedience. This development sounds implausible, I know, especially in Washington. But our crisis demands a more aggressive response from citizens — something that threatens the power of both parties and makes them insecure.

Okay… so that’s pretty clear. And make no mistake, there’s plenty of time for us to fight this battle. FDIC Chair Sheila Bair said just this past Friday that:

“While the crisis that swept through the financial world last year has subsided somewhat, it was far from over and there would be ‘many more bank failures’ ahead.”

“I think there’s still some challenges, I think we need to be realistic. There are still some troubled assets on the books and we still have an economy that’s under significant stress,” said Bair in a 90-minute interview with Forbes reporters and editors on Friday.

“We still don’t know how deep the recession is going to be,” she said.

Really? And here I was told by your fabricators-in-arms that we were on the upswing. That banks were lending again. That the president’s decisive action taken with the last 100 days has saved the world as we know it. And he still had time for lunch and to create peace in the Middle East? Wow. I bet he’s more powerful than a locomotive, isn’t he?

Nothing has been done to-date, except that we sure threw a bunch of money around. We “papered over it,” is one way to look at it. It’s enough to dull some of the pain for a short period of time. But after that… it’s going to be a doozy. I think the Democrats are every bit as beholding to the banks as the Republicans and everything else in Washington D.C.

We the people need to stop being lazy and afraid. We need to wake up and mention that we’re all watching and we don’t like what we see… and there will be no hiding this time around, because this time it’s simply too important to our nation… to our homes… to our America. Because it is still our America.

Tell the banks to have a seat… a back seat to what our nation needs to recover from their inconceivably irresponsible actions. Because it’s not the borrowers… it’s the banks, betch!

I have nothing further… the prosecution rests.