Democracy?
One interesting thing to me about the present foreclosure crisis is the apparent inaction of our democratic bodies. In the past, crises like these have caused elected bodies to enact all sorts of debtor protection laws. Maybe this is happening in some states, but I haven’t heard about it. To the extent I’m seeing pushback against foreclosure, it seems to be coming more from state courts.
Anti-foreclosure policies are certainly not happening — or even being discussed — at the federal level, even though banks share a great deal of the blame for our current situation and the number of homes threatened with foreclosure is truly staggering. I’m not really making a comment about the merits of such laws as a policy matter — though I think a strong case could made for some kind of broadly shared principal reduction. I’m just curious what it says about the state of our democracy that they are not even on the table.
Kevin Drum posted over the weekend about Obama’s reelection campaign and its fundraising strategies, which appear to rely on large donors rather than the grassroots strategy he used in 2008. His despairing bottom line is:
I suppose that soon we’ll be able to do away with even the charade that anyone with a net worth of less than a million bucks matters in the slightest. Given Obama’s obvious deference to the rich over the past two years, this was probably sadly inevitable.
I tend to agree with Drum that what we seem to have at this point is one party dedicated to actively assaulting the interests of working people and especially the poor in order to preserve budget space for corporate tax cuts and tax cuts for the rich. And we have another party that lacks the imagination to the challenge the terms of the debate and so is willing to consider many of the same policies, but with a great deal less glee. What is happening in Wisconsin provides some hope for a progressive revival, but I wonder whether there is room for this at the national level in the post-Clinton Democratic party. I had a slim hope during the 2008 election that Obama might provide an alternative to the Clinton model, but I was disabused of that fairly early on when I saw his economic team take shape. At the national level, does either party express a preferential option for the poor? Clearly not in the case of the Republicans, and apparently not the Democrats either. I’m not sure where we go from here.
We need a credible Third Party candidate to scare the daylights out of the establishment. Or a massive resistance to paying mortgages on the scale of tens of millions. Or a lot of prayer.
Someone remarked, a propos of Wells Fargo’s apparent involvement in the robo signing scandals, that WF is Warren Buffett’s favorite bank, and Warren Buffett is one of Obama’s favorite people, and that is a guarantee of immunity. True? I have no idea; perhaps someone else can set us straight.
Ed — Neither party cares about the poor, and neither one has cared about the poor for quite some time. That’s one of the reasons I proudly voted for Nader in 2000, a vote I still do not regret. In fact, what I wrote about both the GOP and the Other Business Party in the fall of 2000 (in Commonweal) has been more than amply confirmed.
You never were going to get anything and you still won’t get anything from President YesWeCan except rhetorical flatulence and Clintonian triangulation. As for the fund-raising strategy of 2008 — so what? Did you think all of those smaller donors were going to be the ones sitting in the Oval Office with him when he made policy? And this is the guy, recall, who installs as chief of his “competitiveness” team the CEO of General Electric, one of whose stated goals is the continued off-shoring of jobs.
I’d endorse Todd’s tri-partite strategy. But I fear that most Americans have become such demoralized, spectacle-beguiled sheeple that third-party candidates won’t get any traction, and mortgage resistance would be resented rather than supported. Yeah, we could all point to Wisconsin, but I’m skeptical about whether that’s going to trigger any larger revival of the labor movement. Which leaves us with prayer, of course. Hey, if you’re a believer in resurrection, you’ve got to believe that stranger things have happened.
The problem is that 1% of the population is ruining this country.
Here is an excerpt from the editor of Vanity Fair. What is significant is that VF is really a
magazine that is read by the wealthy. So when VF sees that the greed is too much, it is quite significant.
” While the Arab world’s remaining longtime leaders make sure their passports are up-to-date and their Swiss bank accounts in order, one Middle Eastern leader is effectively consolidating his power. With control of not just the country’s army but also an increasingly violent police force, he has recently taken charge of the once independent agencies that oversee elections, control the central bank, and combat corruption. He has likewise been ruthless in stifling opposition parties—he had police close down the offices of two of them in March—and in putting down protests: on a single February weekend, security forces killed more than 20 of their countrymen in anti-government skirmishes. The budding despot in question is our own Nuri Kamal al-Maliki. What separates the Iraqi prime minister from some other Middle Eastern tyrants is the fact that he has the confidence and support of the most powerful nation on earth. Indeed, it was the U.S. that put him in office, at a cost of almost 4,500 American lives. In the Arab world, the top 1 percent wants the status quo, while the vast majority wants to change it. In America, the top 1 percent led the country into war and economic devastation, leaving the less fortunate to fight for one and pay for both. Where is the tsunami of outrage over this?”
http://www.vanityfair.com/magazine/2011/05/graydon-201105
http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
Bill — But the question at the end offers evidence that it isn’t just the top 1% who are implicated. Where IS the tsunami of outrage over this? That goes back to my point about demoralization and spectacle — the bastards have worn us down with work and entertainment.
Besides, the real third rail of American politics is “the American way of life” — the most avaricious and ecologically destructive way of life ever envisioned or practiced. I don’t think most of the 99% on the bottom have much of an inclination to give up on it, or any idea of what they’d replace it with as an ideal. Hell, I don’t have any idea of what I’d replace it with.
There are things you can begin with, Gene. Bring the tax up to 70% on them again. They will still have plenty. Revive the Estate tax. A larger tax on corporations. Breaks for small business. Etc. What the 99% could do is vote out the 1%. There are plenty of things which can be done. The 1% have always depended on the cooperation of the middle class. That middle class has just had a huge awakening. This depression is historically different. As others have pointed out it is in the interest of the 1% to make the middle class secure. Their failure to do so this time will hurt them. Hugely.
The only thing I can think of, if you are concerned about the poor, and growing inequality, is to suggest you all move to Canada, where we are going in the same direction, but it will be a long time until we catch up.
Here is, with few exceptions, an example of how being rich does not equal beauty. The utterly ugly island of Manhattan. The Indians are crying.
http://blogs.denverpost.com/captured/2010/07/13/captured-new-york-city-from-above/
I don’t know much about this problem, but I do recall that, during President Obama’s first year in office, some legislation was passed to try to help homeowners in danger of foreclosure. Here is one outcome: http://en.wikipedia.org/wiki/Home_Affordable_Modification_Program
I recall reading some time ago that for some reason, homeowners at risk were not availing themselves of the remedies that Congress had put in place, such as HAMP. To what extent that is true, and/or what the underlying issues are, I don’t know, but perhaps others here would be able to fill the blanks?
I am doing foreclosure prevention counseling with a non-profit right now; we counsel about 700 families a year. While there are some local assistance programs, they are not to scale, and the only meaningful option out there is HAMP. The problem isn’t that homeowners aren’t applying through the program but that:
1) bank participation is optional; not all lenders participate. (HSBC/Household/Beneficial, for example, doesn’t participate in HAMP.)
2) for banks who do participate, the underwriting process is quite a mystery. We see clients with very similar circumstances, where one will get a modification, the other is declined (from the same lender).
3) the banks seem to lack either the will/capacity to process the requests they do get. We have clients waiting two years for a decision; they constantly resubmit new/ updated documents, and the application goes nowhere.
Out of the 700 folks we counseled last year, about 150 obtained loan modifications, the remaining folks, almost all have submitted packages and are in that underwriting limbo.
I think some ways to clean this up:make lender participation mandatory, have clear and transparent underwriting, and put it all in Elizabeth Warren’s shop (and make sure her new agency has some teeth.
I agree with much of what Eugene McCarraher says and am not so sanguine as Bill Mazella is. Nonetheless, I do think that third party movements are likely to be futile and there still is a significant difference between the Democratic and the Republican parties. It’s hard for me to see how one can square today’s Republican agenda with Catholic Social thought. The Democrats’ practices leave very much to be desired, but I take it that their conduct will be less harmful to the common good that the Republicans.
It would be so good if there were a strong and consistent Catholic voice emanating from the USCCB urging that all policy proposals advanced by either party be scrutinized by Catholics for their likely impact on the poor. Regrettably, the odds on that seem to be miniscule, at best. I see no evidence that the USCCB is prepared to play a serious role in any debates concerning public policy apart from those that either have to do somehow with sexual conduct or with parochial issues such as funding for Catholic schools. Somehow, their conception of “Catholic identity” has little to do with any serious “option for the poor.” Unfortunately, without the hierarchy’s support and encouragement, lay people have little chance to have an effective public voice.
Still, hoping against hope is what our faith calls for.
A concrete example demonstrating a preferential option for the poor on the part of Republicans is the proposal by Rep. Ryan and others to means-test federal transfer payments to retirees, thereby making these massive programs more of a safety net and slightly less of a political racket.
Another important example is the support of most Republicans for legitimate education reform, which is the most urgent and desperate need of our country’s poor. Of course Democrats and their corrupt union patrons fight savagely against all reform.
In another sense, it is true that Republicans do not prefer the poor — they would prefer that nobody be poor. Though they certainly can be faulted in many respects, in general Republicans are more likely than Democrats to favor the policies of growth and freedom that have lifted generation after generation of new Americans out of poverty.
“What is happening in Wisconsin provides some hope for a progressive revival”
Are you referring to the death threats, or the hooliganism generally?
I do not remember a time when a senator or congressman actually represented the wishes of his/her constituancy. We were merely a means to get them elected.
This is not a representative Democracy, this is a veiled Oligarchy.
What country have you been living in?
A concrete example demonstrating a preferential option for the poor on the part of Republicans is the proposal by Rep. Ryan and others to means-test federal transfer payments to retirees, thereby making these massive programs more of a safety net and slightly less of a political racket.
“Means testing”, otherwise known as divide and conquer. Lets those not eligible for benefits (the majority) complain about the unworthy poor on the dole who drive Cadillacs.
Regarding foreclosure programs, what little funding there is to help homeowners at risk of foreclosure (HAMP &EHLP), the House Financial Services Committee has voted to eliminate entirely in the current budget process. They do not propose any other programs in their place.
Irene, thanks for your information and your experiences with HAMP. I agree entirely with your policy suggestions. Thanks also for shining a spotlight on Republican attempts to end funding for these programs.
And, of course, thank you for providing foreclosure counseling! I suspect that there are homeowners out there at risk who just don’t know about HAMP. Without the layer of counseling that you are helping to provide, it seems possible that homeowners wouldn’t know about the program. I wouldn’t have known about it if Eduardo hadn’t started this thread and triggered a memory of something I had read.
I take it that one of Eduardo’s larger points in this thread is the lack of solidarity with the poor.
FWIW – my own very limited experience in dealing with people in danger of foreclosure is through our parish outreach ministry. I live in a middle-class suburban area, and naturally enough, the foreclosure risks I come into contact with are middle-class homeowners who are in financial straits.
Their personal balance sheets demonstrate that, financially, they are indeed poor, but they don’t fit the profile/stereotype of someone who is poor. They are college-educated, have had good jobs ( but are now out of work), have intact families, had very realistic hopes of sending their children to college. They have lived, and are trying to figure out how to continue to live, in stable, safe neighborhoods in which the great majority of residents are homeowners of single-family dwellings. They are, in background and ‘psychographics’, from the “haves” side of the tracks, not the “have-nots”. They are frustrated and ashamed and desperate, because they are not prepared for this kind of crisis in their lives and don’t believe it should be happening to them – in some cases don’t believe it *is* happening to them.
“Where IS the tsunami of outrage over this?”
The One Percent has steered it into the Tea Party.
“I proudly voted for Nader in 2000, a vote I still do not regret.”
Ditto. There remains vanishingly little difference between the two major parties. I believed it in 2000, and my belief has strengthened over the years.
Jim P. –
Now you see what some noticed a long time ago — the the middle class started being destroyed a long. long time ago when the largely Republican governments beginning with Reagan skewed the laws to favor large corporations and the very rich.
I simply don’t understand how someone who calls himself a Christian can support a party that favors the very rich even to the lethal disadvantage of everyone else and puts people like Scalia and Thomas on the Supreme Court.
If one sees the Democratic Party as just as bad, then it seems to me that one has an obligation to go to a third party or seek reform of the old parties by actively participating in them.
This country is dying.
I read blogs: like Naked capitalism and Baseline Scenerio. Helps me understand the morgage business. Basically the USA has made itself into a bananna republic. I wish I had voter for Nadar. Don’t think I will vote in 2012. (Main line media is just spin for their owners, the international coporations.)
It is clear that the foreclosure crisis is an artificial recession in home values exacerbated by the very same banksters and fraudsters who brought us the 2008 meltdown. They now refuse to clean up their mess and continue to blame the victims. They have resisted sensible regulation, and continue to lobby for the dismantling of Fannie and Freddies as well as programs by FHA, VA and the Farmers Home Admin. For over 50 years we successfully encouraged home ownership and equity build up under these federally sponsored programs. It was only when the banks and mortgage brokers went over the line and rode off the range by making greedy and fraudulent loans that we got into trouble. They then made it worse by willy nilly foreclosures, refusing to even talk with borrowers and continuing their refusal even now under HAMP. There seems no limit to their greed, the coverups, and outright incompetence of most lenders. The ultimate sufferers will be millions of people who aspired to be part of the American dream only to find their hopes dashed and their lives broken.