WHO BENEFITS FROM AUSTERITY? WALL STREET!

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Editor’s Comment:

You might wonder why people, mostly republicans, are all about “spending cuts.” just for clarification here, spending cuts are what Europe calls “austerity measures.” every policy possibility has been played here and the worst one is clearly austerity or “spending cuts.” everyone calling for austerity is controlled by the banks. Everyone who is not controlled by the banks thinks it isn’t a bad idea to continue government safety nets and sponsor more commerce. Once upon a time Wall Street made its money riding the crest of successful economies, collecting brokerage fees for more and more deals. Not anymore. The Banks are intent on taking the capital — all of it. What then?

People think it makes sense to spend less money to have more. But when the government does that it has less, not more money, thus cutting off vital services. So you might want to think about who benefits as all the major industrialised nations go down the tubes. We know government loses, we know the people lose their services and pay more taxes, so who is it that benefits from the austerity spin?

WALL STREET is the answer. With the level of commerce declining, plummeting they can bet on a sure thing — that interest rates are going to go through the roof, which means that the prices of bonds already issued are going to fall like stones. Only on Wall street can you make bets on interest rates and bets on bonds or groups of bonds or banks or groups of banks. They are pushing the austerity engine and taking us all into a ditch while Wall Street rakes in whatever money is left in our limping economy.

Wall Street has not only turned the lending models on their heads they have succeeded at turning the policy models on their head. The results are unthinkable— Wall Street has created an incentive to kill commerce. And now they are so deep into those bets that the only game in town is putting every economy into crisis. Someone needs to pull the rug out from under these banksters and put them jail where they belong. As society gave them the license to create and grow liquidity for the engine of economic growth so too can society take it away when the banks bite the hands that fed them.

Paul Krugman Debunks Mitt Romney’s Economic Nonsense

By: Jason Easley

On CNN, Paul Krugman called out Mitt Romney today for spouting nonsense about the economy and explained why Romney’s plan to do what Greece did won’t bring prosperity to America.

Here are Krugman’s thoughts on Obama and Romney via CNN:

ZAKARIA: All this said and done, are you enthusiastic about President Obama? You were not for him in the Democratic primary four years ago.

KRUGMAN: Right. I mean, we’re a long way past where I think enthusiasm is the appropriate emotion for anything here.

But he’s learned a lot. And, you know, his heart’s always been in the right place, and I believe his head is now in the right place. And you certainly — of course, I can’t do endorsements, right? It’s a Times rule. So you have no idea who I prefer in this election.

(LAUGHTER)

But he certainly is talking sense about the economy, and Mitt Romney is talking utter nonsense. And you really do worry. In effect…

ZAKARIA: What is the single biggest piece of nonsense that Mitt Romney…

KRUGMAN: Mitt Romney is saying basically that spending cuts are how we’re going to get to prosperity. Mitt Romney is saying, see what’s happening in Greece and in Portugal and in Spain and in Ireland; let’s do that here.

Boy — you know, we’ve just had a massive test, human experimentation on a massive scale, in effect, alternative doctrines of economic management. We’ve just seen which doctrines are disastrous. And the Republican platform is, let’s put that doctrine that has just caused collapse in Europe — let’s put that doctrine into effect right here in America.

Krugman was right on the money. Republicans have been trying to play what they think is a clever game of pretending that what they have proposed isn’t austerity, while at the same time threatening to implement austerity if they don’t get what they want, which is austerity. History shows that economies suffocate under austerity, but Republicans like Mitt Romney and Paul Ryan keep pushing the insane idea is that we can do the same thing that Europe did, but expect a different result.

Republicans are using austerity as an economic justification for their policy of feeding the rich while starving everyone else. The Romney and Ryan plans by design don’t force any austerity measures on the wealthy. The austerity is designed for everyone else. The rich would benefit while America’s devolution into a society of haves and have nots would accelerate. The reality is that Spending cuts never bring prosperity, and many of the rank and file Republicans who are championing the cuts fail to understand that those cuts will be coming out of their hides. All of the Republicans over 65 years of age who support Romney haven’t put the pieces together that a vote for Mitt is a vote to slash their Medicare.

Mitt Romney is spewing contradictory economic nonsense, because the Republican platform is becoming little more than historically discredited feel good dreams of trickledown worship and gibberish.

Paul Krugman is right. A majority of his fellow economists know he is right. The American people know he is right, and history proves him correct, but the Republican Party is trapped in a suicidal fantasy economy of their own creation. It is this fantasy that Romney has to pander to in order to keep his base, and it is the same fantasy that Paul Krugman absolutely destroyed.

16 Responses

  1. @Nora,

    I will support everything that is right. Might be coming from McCain, Obama, socialists, dictators, a church, Mandelman, Garfield or anywhere; as long as it right, I will support it. The guy is old enough to teach everyone a few things and smart enough to know that Citizens United is an atrocity. The same way that we shouldn’t kill the messenger when the message is bad we ought not to kill the message even though we might not like the messenger. Otherwise, nothing will ever get accomplished. See, no one is perfect in all respect. No one has the absolute knowledge and no one will agree 100% with your positions.

    The better approach is to support what is right, good, positive, beneficial and speak against what is contrary. The personality of messenger or his political orientation are secondary.

  2. Ain’t no way I’m supporting anything McCain is involved in. He ranks up there with Al Gore in idiocy. White House involved in the battle against Citizen’s United? Horseshit. White House is the center of the nest of lying vipers. Check your facts.

  3. It would be funny if it weren’t so tragically wrong…! It will take generations and generations to give us back what any society desperately needs to survive and thrive: trust. Not just in government but in each others. if we can’t trust our chosen leaders, our justice system, our representatives, who else is left to be trusted?

    If I were to write a How-to book on the first thing to destroy when you want to win at any cost, I would put trust first.

    http://www.nakedcapitalism.com/2012/05/obama-and-schneiderman-to-double-size-of-non-existent-task-force.html

    Obama and Schneiderman to Double Size of Non-Existent Task Force

    On Sunday, roughly one thousand people from liberal community organizing group National People’s Action showed up at Tim Geithner’s house to ask that he investigate the banks. ”Are you with the people”, asked these activists. In response to this exceptionally mild pressure, the administration and New York “Attorney General” Eric Schneiderman have decided that they have no choice but to do a bit more PR around the task force. They have doubled its size, and they have appointed a coordinator.

    Senior administration officials and New York Attorney General Eric Schneiderman said they’re busy behind the scenes doubling their team to more than 100 federal and state financial experts and drawing on staff in 10 U.S. attorneys offices around the country. Matthew Stegman, an assistant U.S. attorney, has been tapped as the group’s lead coordinator, according to three sources familiar with the task force’s work.

    The unit has also delivered more than 20 civil subpoenas, collected more than a million documents and deposed many witnesses as it digs through the work of bankers, mortgage brokers, appraisers and others who from about 2004 to 2007 helped millions of Americans buy homes they couldn’t afford at prices that didn’t match their property values — all while bundling the mortgages into securities for sale to investors.

    20 civil subpoenas on appraisers and brokers? How… adorable! And they finally tapped a coordinator, an assistant US Attorney based in eastern California. That’s a clear tell, appointing someone far from a place where they could easily coordinate among multiple agencies.

    The truth is, there is no task force. Obama is lying. Schneiderman is lying. The Department of Justice simply took various individuals already working on cases involving foreclosure rescue scams and petty mortgage fraud, and designated them a new task force. It’s absurd. The reality is that Obama and Schneiderman are both working on behalf of financial elites who will fund their campaigns and pay them a lot of money when they are out of office. That’s the game, as I noted this morning in discussing Bill Clinton’s $80 million payday from banks (among other entities).

    If you look at the video above, you’ll see that protesters are asking the question of whether Geithner is with the banks or with the people. Um, he’s with the banks. That’s been clear for years now. The real question is why protesters are even bothering to ask. And I suspect the answer is that no matter how many times Barack Obama proves himself to be a corrupt and dishonest politician, it’s too painful to concede that those who want social justice in America are truly without representation.

  4. When Clinton was elected, I wasn’t a citizen: i couldn’t vote. I wouldn’t have voted for him. Something about him I didn’t like. Too much smoke for it not to be fire somewhere. Too many scandals. The guy couldn’t keep it zipped. And there was White Water, Jennifer Flowers, the other woman whose name I forgot. Too much mud surrounding him. Too many decisions I didn’t feel right about. Including NAFTA.

    He, among the PTB, was one of the biggest winners. He still wins.

    Sad to say, Obama appeared different. No scandals, good ideas, he looked as though he was sincere. I voted for him. I have been regretting it eversince. And there’s nobody else. Not even Ron Paul.

    God forgive us: we really didn’t know what we were doing. Then again, we really didn’t know what we were up against. And still are.
    http://www.nakedcapitalism.com/2012/05/its-not-about-reelection-bill-clintons-80-million-payday.html

    Tuesday, May 22, 2012
    Bill Clinton’s $80 Million Payday, or Why Politicians Don’t Care That Much About Reelection

    “There was a kind of inflection point during the five-year period between 1997 and 2003 — the late Clinton and/or early Bush administration — when all the rules just went away. You went from a period, a regime, where people did have at least some concern about going to jail, to a point where everything is legal, and derivatives couldn’t be regulated at all and nobody went to jail for anything. And looking back I would say that this period definitely started under Clinton. You absolutely cannot blame this on George W. Bush.” – Charles Ferguson of Inside Job

    “I never had any money until I got out of the White House, you know, but I’ve done reasonably well since then.” Bill Clinton

    On December 21, 2000, as President, Bill Clinton signed a bill known as the Commodities Futures Modernization Act. This law ensured that derivatives could not be regulated, setting the stage for the financial crisis. Just two months later, on February 5, 2001, Clinton received $125,000 from Morgan Stanley, in the form of a payment for a speech Clinton gave for the company in New York City. A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, also in New York. It turns out, Bill Clinton could make a lot of money, for not very much work.

    Today, Clinton is worth something on the order of $80 million (probably much more, but we don’t really know), and these speeches have become a lucrative and consistent revenue stream for his family. Clinton spends his time offering policy advice, writing books, stumping for political candidates, and running a global foundation. He’s now a vegan. He makes money from books. But the speaking fee money stream keeps coming in, year after year, in larger and larger amounts.

    Most activists and political operatives are under a delusion about American politics, which goes as follows. Politicians will do *anything* to get reelected, and they will pander, beg, borrow, lie, cheat and steal, just to stay in office. It’s all about their job.

    This is 100% wrong. The dirty secret of American politics is that, for most politicians, getting elected is just not that important. What matters is post-election employment. It’s all about staying in the elite political class, which means being respected in a dense network of corporate-funded think tanks, high-powered law firms, banks, defense contractors, prestigious universities, and corporations. If you run a campaign based on populist themes, that’s a threat to your post-election employment prospects. This is why rising Democratic star and Newark Mayor Corey Booker reacted so strongly against criticism of private equity – he’s looking out for a potential client after his political career is over, or perhaps, during interludes between offices. Running as a vague populist is manageable, as long as you’re lying to voters. If you actually go after powerful interests while in office, then you better win, because if you don’t, you’ll have basically nowhere to go. And if you lose, but you were a team player, then you’ll have plenty of money and opportunity. The most lucrative scenario is to win and be a team player, which is what Bill and Hillary Clinton did. The Clinton’s are the best at the political game – it’s not a coincidence that deregulation accelerated in the late 1990s, as Clinton and his whole team began thinking about their post-Presidential prospects.

    Corruption used to be more overt. Lyndon Johnson made money while in office, by illicitly garnering lucrative FCC licenses. It was the first neoliberal President, Jimmy Carter, who began the post-career payoff trend in the Democratic Party. In 1978, Archer Daniels Midland CEO Dwayne Andreas convinced Carter to back ethanol subsidies. After Carter lost to Reagan, he faced financial problems, as his peanut warehouse had been mismanaged and was going bankrupt. AMD stepped in, overpaying for the property. But Carter wasn’t nearly as skilled as Clinton, because he didn’t stay in the club.

    Over the course of the next ten years after his Presidency, Clinton brought in roughly $8-10 million a year in speaking fees. In 2004, Clinton got $250,000 from Citigroup and $150,000 from Deutsche Bank. Goldman paid him $300,000 for two speeches, one in Paris. As the bubble peaked, in 2006, Clinton got $150,000 paydays each from Citigroup (twice), Lehman Brothers, the Mortgage Bankers Association, and the National Association of Realtors. In 2007, it was Goldman again, twice, Lehman, Citigroup, and Merrill Lynch. He didn’t just reap speaking fee cash from the financial services sector – corporate titans like Oracle and outsourcing specialist Cisco paid up, as did many Israel-focused groups, Middle Eastern interests, and universities. Does this explain the finance-friendly, oil-friendly and Israel First-friendly policies pursued by the State Department under Hillary Clinton? Who knows? But if you could legally deliver millions in cash to the husband of a high-level political official, it wouldn’t hurt your policy goals.

    Speaking fee money isn’t just money, it is easy money. In one appearance, for one hour, Clinton can make $125,000 to $500,000. At an hourly rate, that’s between $250 million to $1 billion annually. It isn’t the case that Clinton is a billionaire, but it is the case that Clinton can, whenever he wants, make money as quickly and as easily as a billionaire. He is awash in cash, and cash is useful. Cash finances his lifestyle. Cash helped backstop his wife’s Presidential campaign when it was on the ropes.

    And these speaking fees aren’t the only money Clinton got, it’s just the easiest cash to find because of disclosure laws. Apparently, Clinton’s firm apparently had a paid $100k+ a month consulting relationship with MF Global, and Clinton and Tony Blair have teamed up to help hedge funds raise money. His daughter worked for a giant hedge fund and political ally (Avenue Capital). And Clinton has unusual relationships with billionaires and Dubai-based investors.

    Bill and Hillary Clinton are the best at what they do, but they aren’t the only ones who do it. In fact, this is what politics is increasingly about, not elections, but staying in the club. Erskine Bowles, former White House Chief of Staff, lost two Senate elections. But he’s on the board of Facebook and Morgan Stanley, as well as authoring the highly influential Simpson-Bowles plan to gut Social Security and Medicare. Tom Daschle, who lost a Senate race in 2004, is a millionaire who in large part crafted Obama’s health care plan. Former Senator Judd Gregg is now at Goldman Sachs. Current Chicago Mayor Rahm Emanuel made $12 million in between his stint at the Clinton White House which ended in 2000 and his election to Congress in 2002. Former Congressman Harold Ford, now at Morgan Stanley, is routinely on TV making political claims. Larry Summers is on the board of the high-flying start-up Square. Meanwhile, Russ Feingold, a Senator who did go after Wall Street, is a professor in the Midwest. Eliot Spitzer is a struggling TV host and writer.

    In other words, Barack Obama and his franchise are emulating the Clinton’s, and are speaking not to voters, but to potential post-election patrons. That’s what their policy goals are organized around. So when you hear someone talking about how politicians just want to be reelected, roll your eyes. When you hear an argument about the best message or policy framework to use for reelection, stop listening. That’s not what politicians really care about. Elections in many ways are just like regular season games in basketball – they are worth winning, but it’s not worth risking an injury. The reason Obama won’t prosecute bankers, or run anything but a very mild sort of populism, is because he’s not really talking to voters. He just wants to be slightly more appealing than Romney. He’s really talking to the people who made Bill and Hillary Clinton a very wealthy couple, his future prospective clients. We don’t call it bribery, but that’s what it is. Bill Clinton made a lot of money when he signed the bill deregulating derivatives and repealed Glass-Steagall. The payout just came later, in the form of speaking fees from elite banks and their allies.

    Ironically, Clinton has come to express regret about deregulating derivatives. He has not given the money back.

  5. Thank you for supporting Senators McCain and Whitehouse.
    Now tell the world! It’s time for America to get back on the right side of history.This news is too big not to share.

    Here’s a link back to the petition: http://unitedrepublic.org/mccain-whitehouse/

    Thousands of Americans all over the country have been working tirelessly for years to overturn Citizens United. This may truly be a once-in-a-lifetime opportunity to get the Supreme Court to reconsider, and we can only seize it if we stand united, and speak with one voice.

  6. Please go to this link and sign the petition to repeal United Citizens. This is the only way to get money out of politics. It’s either that of riots the likes of which we’ve never seen. And we will have riots if we don’t turn around very, very quickly. We are near our breaking point. Patience is running very low.

    SIGN PLEASE. What have we got to lose? We are losing anyway. At least, by6 signing, we put our weight together and may make a difference.

    Thank you, on behalf of our kids.

    http://unitedrepublic.org/mccain-whitehouse/?akid=114.223138.D0N0l2&rd=1&t=1

    Stand with Senators McCain and Whitehouse: Tell the Supreme Court to Reverse Citizens United
    Add your name now.It’s time to stop billionaires from buying our democracy.

    The senators are standing with the Montana State Supreme Court in saying “Hell no!” to Citizens United. And so are we.

  7. I wish you Neil and various posters would lighten up on the department of justice and TPTB. If they’d taken the easy route and not done the intense investigations of Wall Street fraud and criminality, do you have any idea how much havoc could have been caused by Martha Stewart’s many stencil sets? Any clue as to how much glitter paint we were spared due to their savvy investigatory skills? I shudder to think. As a matter of fact, thinking hurts these days.

  8. Of all the terrible things being done to us, that constant lying is, by far, the most devastating and detrimental. We, human beings, are wired to hear and tell the truth. It is no wonder that “The truth shall make you free”. Until we can get there, we’ll be unable to rebuild this country rotten by constant lies coming from every single person in power and/or authority.

    Lies are so destructive that even I have eliminated all the people around me who lie. Can’t deal with it. Won’t deal with it.

    http://mandelman.ml-implode.com/2012/05/follow-the-bouncing-home-price-statistics/

    Follow the Bouncing Home Price Statistics
    1

    I’m not exaggerating one bit when I say this… nary a month goes by that I don’t feel compelled to debunk the happy housing prices statistics that seem to get released immediately following the release of any bad news for the housing market. As a matter of fact, I just did so a few days ago, HERE.

    Each time I go through the pointless exercise I tell myself that it will be the last time, that from here on out if someone wants the housing market to have bottomed or being on its way up… or whatever, I’ll just respond b y saying, “Sounds great!,” and leave it at that.

    The last time was entirely transparent … while absolutely nothing had changed all of a sudden everything was better… in the mainstream media, anyway. So, once again I found myself sitting down at my keyboard to strip away the fabrication, manipulation and obfuscation so as to leave only the naked truth of the matter.

    Basically, if you’ve been a Realtor out to have a parade over the last few years, then you’ve come to know me as the rain.

    Well, today LPS (“Lender Processing Services”) published a report, based on analysis of 40 million loans, and to begin with, the foreclosure pre-sale inventory rate came out at 4.14 percent, which is UNCHANGED whether we’re comparing last month… or last year. Pre-sale inventory exceeded two million properties.

    Not only that, but the mortgage delinquency rate went UP in April by 0.4 percent to 7.12 percent, and the number of properties that are now 30 or more days late, but NOT in foreclosure, passed the three and a half million mark in April.

    Florida, Mississippi, New Jersey, Nevada and Illinois were the states with the highest percentage of delinquent loans, which I found quite an interesting list because of the lack of “sand states” listed, Nevada notwithstanding.

    Montana, Alaska, South Dakota, Wyoming and North Dakota made the list of states with the fewest delinquent loans, but since no one lives in those states anyway, who really cares?

    Bang the Drum Slowly…

    Starting last month, I heard from Realtors primarily in Phoenix, but also in Northern California, as they excitedly rambled on about the throngs of investors who had come from Canada and points unknown to bid up distressed property sales, which make up just under 50 percent of all sales for the last three months running.

    However, a new study by Campbell/Inside Mortgage Finance shows that even with “all that action,” home prices are not moving higher. In fact, most homes sold in April, although two or three offers were received, ended up selling below list price.

    According to IMF’s HousingPulse, as reported by CNBC’s Diana Olick:

    “The average price for non-distressed properties declined 1.5 percent from March to April, while the average price for short sales dipped 1.7 percent. For damaged REO [bank-owned] the average price fell 1.4 percent and for move-in ready REO the average price slipped 0.3 percent.”

    So, demand is rising while prices are falling… fascinating. Perhaps it’s because of a combination of factors, such as incredibly tight credit markets, an ongoing avalanche of foreclosures coming onto the market, a worsening jobs market, higher unemployment, and a market made up of greedy bottom-fishers not out to buy, but rather to steal.

    Think I might be onto something there, or no?

    Other reports are saying that investors in and around Phoenix are bidding up home prices to such levels that after necessary repairs are completed, the new owner will be underwater once again.

    Olick and her crowd on CNBC, who only a week or two ago seemed all but ready to declare a bottom and begin the march back to prosperity, but thid week her tone is decidedly different. In fact, she’s sounding a bit more like me… you know, were I a ditzy blond who’s chief skill is reading from a teleprompter…

    “… depending on monthly financing costs, and the upfront investment, (investors) may not see the kind of returns they originally expected, and they may not be able to sell in the time frame they originally planned.”

    Wait a minute, there’s a word for that… darn it, what do they call someone who ends up in that situation in the midst of this larger picture… Oh, yeah… I’ve got it…

    SUCKER!

  9. I agree. Krugman for comedian.

    KRUGMAN: …But he’s learned a lot. And, you know, his heart’s always been in the right place, and I believe his head is now in the right place…But he certainly is talking sense about the economy, and Mitt Romney is talking utter nonsense.

    Republicans and Democrats: Two factions of one party.

  10. your first tipoff about how disillusioned Krugman is is when he says “..his heart has always been in the right place”. Yeah. The right place for an America hating, anti-white socialist who wants to destroy the country!

  11. This comes with a video I don’t believe will post. So, to watch it, click on the link below.

    PS: I firmly believe that fighting in court is necessary and I don’t think it is a futile endeavor. Maybe except in CA…

    http://mandelman.ml-implode.com/2012/05/california-foreclosure-laws-need-homeowner-bill-of-rights/

    California Foreclosure Laws Need Homeowner Bill of Rights

    My regular readers will likely remember past articles in which I stated that we would not win this battle over foreclosures by fighting individually in the courts. I’ve stated on numerous occasions that we needed to bring political pressure to bear and fight this in our legislatures, both state and federal, because for our judges to be of more help, we need some new laws to be written and some older laws to change.

    The fact is that over the last thirty years, as the financial sector was steadily growing in size it was increasing its ability to influence our legislative system.

    While we were all in a debt-induced coma wandering around aimlessly at our respective shopping malls, the banking lobby was busy making sure that essentially every single state or federal law proposed, having to do with creditors and debtors, either blatantly favored, or at the very least tilted towards the creditor’s interests… certainly not the borrowers’.

    Now, as we’re facing a crisis of unprecedented proportion, we’re learning the hard way that our rights as borrowers are almost non-existent. In California and around the country, foreclosure defense lawyers saw that mortgage servicers could far too often pretty much foreclose at will using almost anything as documentation.

    Mickey could sign it… Donald could notarize it, and it just didn’t matter very often.

    I also came to realize that as far as messages go, saying that the courts would not be the answer we were looking for went over like a lead balloon. And since telling people something that they hate hearing is no fun, I tried not to bring it up any more than was necessary.

    The problem is, and I realized this yesterday… I WAS RIGHT… AM RIGHT.

    A few days ago I noticed that several California politicians were announcing a town hall type meeting on the foreclosure crisis that could be viewed online. They were even soliciting questions from the general public. (I submitted a few but wouldn’t you know it, mine weren’t chosen.)

    Yesterday, I watched the video… it’s an hour long and you’ll find it below.

    I also watched various individuals, from homeowners to housing counselors to consumer advocates, give testimony related to the proposed bills, and one thing came crashing through… I should have testified.

    I would have made a significant difference.

    What I learned watching both the testimony and the round table with the politicians was that the knowledge base of those making policy decisions related to the foreclosure crisis has much room for improvement and expansion. Clearly, no one has filled them in properly in numerous areas. And we are making a HUGE mistake by not marshaling our forces to get involved in the political process and make our voices heard.

    State’s AG Backs California Homeowners Bill of Rights

    In an effort to prevent now well-documented foreclosure abuses, California’s Attorney General has been pushing the state’s legislature to adopt a series of legislative proposals containing stricter consumer protections related to mortgage servicing and foreclosure.

    The proposals are part of what’s come to be called the “Homeowner’s Bill of Rights.”

    Politicians, no doubt recognizing that this was not a debate they wanted to be having publicly and desperate for political cover, decided to take many of the proposals out of the normal legislative process and place them instead into what’s being called, “a special conference committee.”

    The special committee’s members, if it matters and I’m not at all sure that it does, include four Democrats and two Republicans. State senators Noreen Evans and Ron Calderon… and Assembly members Mike Feuer and Mike Eng are the Democrats. Senator Sam Blakeslee and Assembly member Donald Wagner are representing the GOP on the committee.

    Party affiliation may not be important because just like all the past legislative proposals related to preventing abuses in the foreclosure process, the Homeowner Bill of Rights is vehemently opposed by the banking lobby. And that means that the more important distinction will likely prove to be who is pro-banker and who is pro-consumer, or at least somewhat neutral.

    So, how does the committee break down in that regard? Here’s a quick look:

    Noreen Evans appears to me to be pro-consumer, with stated policy priorities that include protecting the environment, fighting for women and children, and the reform of our legal system. Currently, she chairs the Senate Judiciary Committee.

    Also, her district covers Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma counties. However, and not that this in conclusive, she previously served in the State Assembly (2004-2010) and during that time she was a member of the Assembly’s Banking and Finance Committee.

    Mike Feuer seems to be at least neutral, if not solidly pro-consumer. He’s a graduate of Harvard College and Harvard Law School. He chairs the State Assembly’s Judiciary Committee, but previously he co-chaired the Assembly’s Working Group on Jobs and Economic Recovery, and chaired the Budget Subcommittee on Transportation and Information Technology.

    Also, while serving on the Los Angeles City Council, Feuer co-authored the Affordable Housing Trust Fund, funded meals for 75,000 indigent seniors, led efforts to create playgrounds accessible to disabled children, and bolstered the city’s Ethics Commission.

    Ron Calderon is an ex-banker, and I think it’s more than safe to say that left to his own devices, he’ll vote with the banking lobby every single time. Today, Calderon chairs the very influential Senate Insurance Committee, which I believe until recently was the “banking and insurance committee,” but during his two previous terms in the State Assembly, he served as chair of the Banking and Finance Committee.

    Calderon says his policy priorities include a balanced state budget, strengthening state and local infrastructure, creating jobs, and protecting the rights of consumers.

    The problem is that Calderon’s idea of protecting consumer rights is presumably what drove him to sponsor California’s SB 94, a bill signed into law by the governor in 2009, ostensibly designed to protect consumers from foreclosure scams, but that ended up doing nothing more than chasing legitimate attorneys away from helping homeowners get their loans modified.

    Almost three years later, foreclosure related scammers remain ubiquitous in California, while now, in the hands of the State Bar, SB 94 threatens to make it literally impossible for a homeowner to hire a lawyer to help with a loan modification. I understand why the Mortgage Bankers Association supported SB 94, but I for one don’t need or want that kind of “protection,” thank you anyway.

    Mike Eng chairs the Assembly Committee on Banking & Finance, which oversees California’s financial institutions, real property finance, and corporate securities law. The Committee develops and shapes public policy in such as areas as mortgage foreclosures, payday lending, regulation of state chartered banks and credit unions, consumer lending, and financial privacy.

    That seems pretty conclusive, I understand, but watch him talk on the subject of the Homeowner Bill of Rights on the video below. He makes clear that public support or the lack thereof is going to be a key driver of the committee’s decision.

    Sam Blakeslee’s says he’s “known as one of the state legislature’s most bipartisan members,” and he chairs the Select Committee on Recovery, Reform and Realignment, which is described as a bipartisan Senate think tank.

    But, Blakeslee is also president of his family’s business, the investment firm Blakeslee & Blakeslee, founded in 1971. He is a Certified Financial Planner, a Registered Securities Principal, and a Registered Municipals Principal. So, I don’t know what all that means, necessarily, but I’d say it’s worth keeping an eye on this guy for sure. Maybe he’s the state’s most bi-partisan banker.

    And finally, Don Wagner, the Vice-Chair of the Assembly Judiciary Committee, is from South Orange County (I live in North Orange County, by the way), and it looks to me like he’s a typical Orange Country conservative Republican… he ran for his seat in the State Assembly on a platform of fiscal responsibility… which on its face, doesn’t bode well as far as his support for the Homeowner’s Bill of Rights goes.

    His website says that his “district has not raised taxes, but by floating bonds, it has paid off all of its debts, and balanced every budget.” So, does that mean that he floated bonds to take on the debt needed to pay off the debt? I’m not trying to be funny… that’s what it says on his site.

    Wagner’s a lawyer involved with the Orange County Bar Association and he’s served as a Judge Pro Tempore in the Superior Court of Orange County. He also founded the Orange County Chapter of the Federalist Society, which is “a national organization of conservative lawyers, judges, and law professors committed to ensuring a judicial integrity and strict adherence to the Constitution of the United States.”

    Were I a betting man, and I am, I’d have to bet he’s a vote against the Homeowner’s Bill of Rights, but I’m certainly willing to be proven wrong.

    Scoreboard says…

    So, based on that cursory analysis and absent any information to the contrary, I’d say that as far as the “special committee” goes, the score at halftime is:

    BANKERS – 4 CONSUMERS – 2

    Under just about any other circumstances, I’d say that based on who the committee’s members are… the fix was in. I’d stop following the Homeowners Bill of Rights and just wait to read bad legislative news once again… “Killed in committee, but thank you for playing. The End.”

    But, this time I’m not so sure how this will turn out, especially if I were to be successful at getting others involved… like I was with Norm Rousseau’s suicide, for example. Or even half that successful would probably do it.

    Which, of course, ultimately comes down to you.

    Here’s why I think this time could be different:

    ◦Attorney General Kamala Harris is publicly backing the Homeowner’s Bill of Rights. It’s the first thing you see when you visit her website. And it’s an election year.

    ◦Servicer abuses and misconduct are now very well documented and widely known. The DOJ settlement provides some $17 billion in principal reductions nationwide, and California gets the majority of that amount. Plus, there’s another $8 billion involved. That’s going to keep a light shining on whatever is happening for a while.

    ◦California is the third hardest hit state, but its size makes it number one by far. Our state budget deficit is the result of the foreclosure crisis, and the austerity ahead is going to touch everyone’s life, not just those at risk of foreclosure, and last for several years.

    ◦This time, everybody’s watching, which is why the politicians pulled the Bill of Rights proposals into a “special committee.” It’s dark in there and they’re hoping they can kill it without anyone seeing who done it. But that’s not going to be easy this time around.

    ◦This time, maybe enough Californian’s have been affected by the crisis, or see that they’re about to be affected by the crisis, so they’ll actually take the time to send emails and contact their elected representatives… and ask that their friends and family do the same.

    The only way this country ever gets onto a path not fraught with risk of pain, civil unrest, and violence is if some balance is restored. The pendulum has been allowed to swing too far to one side… it can’t stay there… the question is how is gets pushed back. As Robert Reich says in his brilliant book, “Aftershock,” the two choices are radical revolt or radical reform. (If you haven’t read it I HIGHLY recommend it.”)

    Regardless, the fact that our elected representatives still have such a rudimentary understanding of the crisis and its impact on our society is proof that we are failing to educate them. Homeowners are spending more time talking about robo-signing than they are talking to their elected representatives at the state and federal levels.

    I’m not saying we should stop anything. But I am saying we need to significantly expand our communications capabilities. And I know we can do so fairly easily…

    … Norman Rousseau taught me that.

    More people read, shared, forwarded and talked about the story I wrote about Norm’s suicide than any of the articles I’ve written in the past. And that’s sad.

    Consider the following 3 facts:

    A. When it comes to our politicians, there’s only one thing more important than money in this country… and that’s getting reelected. If politicians think banking lobby money is what’s needed to get them reelected, then they’ll vote with the banking lobby.

    But, if they realize that by voting with consumers they won’t need banking lobby money to get reelected… and that if they do vote with the banking lobby, there’s not enough money in the world to get them reelected… why, then they’ll vote with consumers.

    B. There are only two ways to gain real political influence in this country. One involves having a lot of money, and on that front we’ll never win… they’ve got the money advantage cornered.

    The other way to gain political influence is to have a lot of people, and that’s currency we should be able to come up with in the thousands, or even millions. Already, there are easily 20 million Americans that have been directly affected by the foreclosure crisis… enough to sway a national election if organized.

    C. This is an election year. Right now, in Washington D.C. those in the House of Representatives all know that soon, they’ll be coming home to campaign for reelection in their home districts. And right now, they’re polling their constituents and likely voters to see what’s on their minds, because they don’t want to come home to find people throwing tomatoes at them.

    If any one of them received 500 emails on the same topic right now, they’d start sweating like Rick Santorum at HomoCon-2012.

    (Or, maybe like… Tim Geithner at a Save My Home convention? Pelosi on a duck hunt with Cheney? Boehner at a Hallmark Film Festival? G.W. Bush on Jeopardy?)

    WE’LL WIN BECAUSE WE’RE RIGHT.

    The special committee is reviewing what are considered to be the “more far-reaching of the proposals.”

    So, what the heck does that mean? Well, it includes things like a law that would, according to the San Bernardino County Sun…

    “… prohibit foreclosures whenever a homeowner makes a timely application for a loan modification, mandate that banks establish a single-point of contact for borrowers facing foreclosure, and let borrowers challenge proceedings in court, among other things.”

    Well, why didn’t you say so? Good Lord, those things are incredibly “far reaching.” In fact, I could have sworn that one of them just reached out from Sacramento and tickled my tushie some 400 miles away. That’s some reach, I’ll tell you what.

    Banking industry representatives are said to oppose these ideas on grounds that they may encourage strategic defaults and spurious lawsuits.

    To which I would only reply: Prospice tibi, ut Gallia, tu quoque in tres partes dividaris.

    (Latin, meaning: “Watch out, you might end up divided into three parts, like Gaul.”)

    Come on, banking industry representatives… why would any of those things increase the probability for strategic default, or was that just all you guys could come up with on short notice. What happened to, “there won’t be any more lending or borrowing costs will rise?” Those didn’t make any sense either, but I was getting comfortable with them nonetheless. Strategic default? Phooey.

    And spurious lawsuits? I’m not sure we both understand what that word means, that is to say… I do… but do you guys? Would you like to know what’s causing the spurious lawsuits in California? I’ll be happy to tell you.

    It’s SB 94, which was your idea in the first place, was it not? Don’t try to tell me that it was Senator Calderon’s idea because clearly he’s a marionette. You chase all the legitimate lawyers away from helping homeowners modify loans and what you get are spurious lawsuits by the hundred. Haven’t you figured that out yet?

    Attorney General Harris has said exactly what I was suggesting several months ago when the settlement was first announced, albeit a tad prematurely. She said it’s important to strengthen due process by writing some of the provisions of the national mortgage settlement with the nation’s five largest banks into state law.

    Finally, there is intelligent life in politics. It absolutely takes my breath away that finally, someone in a position of power actually agreed with me about something.

    And I wrote the following on March 1, 2012…

    If the new servicer standards were made into state law that had a private right of action and a provision for attorneys fees, that would save homes and stop foreclosures, and it would do so more effectively than any amount of money.

    I’m not talking about bailouts for borrowers, I just want the rules associated with a national program to be followed and enforced, and I think every homeowner in the country should and would want that too, regardless of whether at risk of foreclosure or not at this moment.

    Every homeowner in America should want federal programs to operate as they were intended to operate. It’s not about who is at risk of foreclosure and who isn’t. It’s simply about being in favor of basic fairness in our federal or state programs. No one should oppose any of those ideals, and those that suffered as a result of being deprived such fairness would engender sympathy from others.

    We simply have to do what the Attorney General is suggesting… otherwise all we’ll have are another set of HAMP guidelines, and we don’t need another set of useless guidelines that no one follows and no one can enforce.

    No one should want that, by the way, because we understand that “HAMP HAPPENS.”

    But, if HAMP HAPPENS TWICE, strategic defaults and spurious lawsuits are going to look like a picnic at the beach on a sunny day with someone you love.

    A SPECIAL MESSAGE TO ATTORNEY GENERAL HARRIS…
    Okay, I’m a HUGE fan. Brilliant! How can I help?

    Reach me anytime at mandelman@mac.com.

    Mandelman out.

    # # #

    NOW CLICK PLAY TO WATCH CALIFORNIA’S

    Foreclosure Crisis Town Hall

  12. Too many pictures I can cut-and-paste to post here. So, check Mandelman’s page today and have a good laugh. Or a good cry, whichever applies…

    http://mandelman.ml-implode.com/2012/05/tim-could-you-get-the-door-sure-honey-are-we-expecting-company-not-that-i-know-of/

    “Tim, could you get the door?” “Sure, honey… are we expecting company?” “Not that I know of…”

  13. @Carie,

    “Protesters marched on Sunday to Treasury Secretary Timothy Geithner’s home Sunday in Bethesda, Md., but got no response when they knocked on his door.”

    It’s going to happen more and more. It happened to NC’s governor, it happened (I believe) to WI’s governor and it will keep on happening, until people realize that not one of those dangerous clowns wants to have an honest, open and truthful discussion. Then, we know what will happen…

  14. http://www.huffingtonpost.com/2012/05/21/timothy-geithner-protest-house_n_1532763.html?ref=business&ir=Business

    Protesters March To Timothy Geithner’s Door
    Posted: 05/21/2012 10:54 am

    WASHINGTON — Protesters marched on Sunday to Treasury Secretary Timothy Geithner’s home Sunday in Bethesda, Md., but got no response when they knocked on his door.

    The protesters from National People’s Action and the National Domestic Workers Alliance tried to deliver a letter to Geithner demanding a financial transactions tax, principal reductions for underwater homeowners and an investigation of the bankers who caused the mortgage crisis.

    National People’s Action said “more than 1,000 people” went to Geithner’s home, while the Wall Street Journal pegged the number at “several hundred…”

  15. The public unions are just as bad for the middle class taxpayers as the banks. Just two scumbags ripping us off in different ways.

  16. It wasn’t long ago that people thought putting banksters in jail was over-reacting. Now that prospect is imminent and necessary to restore sanity to our planet.

    Romney is another stooge propped up by the old boy network…groomed for the role of president of the US Corporation.

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