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Wonkbook: Foreclosure law vetoed; individual mandate ruled constitutional; IMF takes on China

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President Obama vetoed H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, yesterday. The law, which would've allowed banks to speed the notarization process by using out-of-state, electronic firms, passed the House and Senate with virtually no notice, but became unexpectedly consequential as accusations of fraudulent contracts ripped through the mortgage industry. Some thought the bill might help with the current problems, unfreezing some of the contracts and demonstrating the government's intention to push through this. But no, we're stuck in this morass for at least awhile longer. Sorry, recovery.

It's still a bit early to say how much damage the new foreclosure crisis will do to the markets. But even if this one doesn't turn out so bad, the fact that it could've been bad is, well, bad enough. The repeated reminders of this sort of unexpected risk are preventing businesses from investing enough to nurture a serious recovery.

In 2007 and 2008 we had a major financial crisis. That led to a wrenching recession. But what killed the recovery was the European debt crisis. It was proof that there wasn't just one risk that the system hadn't properly accounted for, but many risks. And in a fragile global economy, the impact of any negative event was going to be magnified.

And now there's another major risk that investors weren't expecting We had too much boom because people underpriced risk. They couldn't seem to see it anywhere. We're having too much bust because people are overpricing it. Suddenly, they're seeing it everywhere. We're not going to climb back to normal until businesses feel confident that the economy won't detonate six months from tomorrow, drying up credit and rendering all their new hires and investments terrible economic decisions. But for that to happen, the economy needs to stop offering plausible crises every six months. And on that, it's not cooperating.

Welcome to Wonkbook.

Top Stories

Obama is declining to sign legislation that would expedite foreclosure processes, reports Jia Lynn Yang and Ariana Eunjung Cha: "The vetoed legislation, which is two pages long, would have required local courts to accept notarizations, including those made electronically, from across state lines. Its sponsors said it was intended to promote interstate commerce. Lawmakers saw no problems when the House approved it in April by a voice vote, which leaves no record of votes. The Senate passed the bill unanimously last week. But as the lack of a proper paper trail in mortgage documents came to light, the idea of relying on electronic notaries triggered protests from real estate lawyers and consumer advocates. Relying more on electronic notaries, they warned, could allow more fraud into the system."

A district court judge has ruled the individual mandate is constitutional, reports N.C. Aizenman: "Other federal courts have already dismissed some challenges to the law on technical grounds - ruling, for instance, that the plaintiffs lacked standing. However, the decision issued Thursday by Judge George Caram Steeh of the Eastern District of Michigan is the first to reject a claim based on the merits, marking a notable victory for the Obama administration...Steeh found that 'far from 'inactivity,' by choosing to forgo insurance, plaintiffs are making an economic decision to try to pay for health-care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars...onto other market participants.'"

IMF chief Dominique Strauss-Kahn has condemned China's currency policy, reports Howard Schneider: "'We have been one of the institutions to repeatedly say that we believe the renminbi was substantially undervalued and that something had to be done to fix this problem,' IMF managing director Dominique Strauss-Kahn said in a news conference opening the agency's annual meeting. 'Many do consider their currency as a weapon, and this is not for the good of the world economy.'... World Bank President Robert Zoellick noted that a wave of trade protectionism sparked the Great Depression in the 1930s and cautioned that policymakers needed to calm the current dispute before it gets out of hand."

Got tips, additions, or comments? E-mail me.

'70s funk interlude: Sly & the Family Stone's "Luv 'n Haight".

Still to come: New Fed bond purchases may not do much; BP's oil spill review may have had an ulterior motive; there are costs to the Obama administration's immigration enforcement strategy; and Johnny Depp visits an elementary school.

Economy/FinReg

Private economists don't expect Fed action to help the economy much, report Craig Torres and Scott Lanman: "Firms with large-scale models of the U.S. economy such as IHS Global Insight, Moody's Analytics Inc. and Macroeconomic Advisers LLC project only a moderate impact from additional Fed asset purchases. The firms estimate that the unemployment rate will remain around 9 percent or higher next year whether the Fed buys $500 billion or $2 trillion of U.S. Treasuries in a second round of unconventional stimulus...[one firm's] models show that $500 billion of purchases would boost growth 0.1 percentage point in 2011 and leave the unemployment rate at 9 percent or above for the next two years."

Thousands of stimulus checks went to deceased persons: http://wapo.st/cr2DMT

Tax cut politics make for paycheck uncertainty, reports Peter Whoriskey: "Normally, the Treasury Department issues information on how much to take out of next years paychecks by mid-November, but this year the debate over how much to extend the Bush tax cuts seems unlikely to be resolved by that time, and could drag into December or beyond. The longer it drags on, the more likely it will complicate the processing of millions of paychecks in January. It can take as long as five weeks for some companies to make the adjustments under the new tables, payroll administrators said."

China is warning that Congressional action on currency evaluation could harm ties with the US: http://wapo.st/dtYXcm

Foreclosure confusion is hurting home sales, report Andrew Martin and David Streitfeld: " snapshot of the problems can be seen at the real estate agency that sold Ms. Ducksworth her home, Marc Joseph Realty, based in Fort Myers. The agency had 35 deals that were supposed to close this month. As of Thursday, Fannie had postponed 11 of them. Another handful of homes that did not have offers or were being prepared for market had also been withdrawn. 'If this wipes out half my inventory, that’s a scary thing,' said Bill Mitchell, the agency’s closing coordinator. As he spoke, his computer pinged and another message from Fannie came through about withdrawing a house. It had the subject line, 'Unable to Market Notice.'"

Consumer spending and jobless claims figures are only improving tepidly: http://wapo.st/dvPrCN

Economic recovery plans need to think long-term, writes Jeffrey Sachs: "It’s time to push a long-run perspective, and not the vacuous one of cutting entitlements for the poor and working class, but a serious one of investing in human capital, infrastructure, technology, and the environment. The claim that Social Security and Medicare benefits need to be cut in order to balance the budget is absurd in an era when the richest percent of households now bring in around 25 percent of national income. Before cutting benefits for the poor and middle-class, the rich should first be required to pay in line with their vast incomes and wealth."

American Express CEO Kenneth Cheneault defends his fight against the Justice Department's credit card policy: http://wapo.st/9Nsoxi

Central bankers are in need of an elixir to stop deflation, writes Steven Pearlstein: "At this point, the risks of central banks doing nothing (deflation, continued high unemployment) are greater than the risks of cranking up the monetary printing press (future inflation). But nobody should expect it will prove a magic elixir for the economy. A number of economic modelers estimate that the unemployment rate would remain above 9 percent whether the Fed expanded its balance sheet by $500 million or $2 trillion. The reason is that the normal channels through which monetary easing works are pretty worn out. Interest rates are already so low that pushing them lower won't induce more borrowing."

Celebrities being delightful interlude: Johnny Depp appears in an elementary school as Jack Sparrow.

Energy

Energy policy insiders say that an incremental strategy won't work: http://politi.co/9A5JlR

Some made jobless by the BP spill aren't getting help, reports Ryan Dezember: "Some 500 workers have been laid off across the shallow-water sector since the Deepwater Horizon rig exploded April 20, according to Hercules Offshore Inc. general counsel Jim Noe, who is also a spokesman for the advocacy group Shallow Water Energy Security Coalition. Sen. Mary Landrieu (D., La.) recently asked BP to let shallow-water workers tap the $100 million fund. But fund spokesman Mukul Verma said there were plans to add deep-water support workers to the fund's eligible recipients early next year, and there probably wouldn't be enough money to pay them and their shallow-water peers."

The OMB was involved in blocking oil spill estimates from being released: http://wapo.st/bHsxPo

Polluters have always tried to fight science, writes Chris Mooney: "Ross and Amter label the most effective strategy 'spill, study, and stall': If you don't want to stop polluting, just insist that the science is uncertain and there's no basis for action. Cook up a few questionable studies that reanalyze the data, divert attention to other possible culprits, or call for new research. The tobacco industry didn't invent these gambits; as Ross and Amter show, the chemical industry used the same techniques to fight the regulation of tetraethyl lead in the early 20th century and the regulation of air pollution in the 1940s. The agenda is the same in the current climate debate."

Industry has always overestimated the costs of the Clean Air Act, writes David Roberts: http://bit.ly/di4f8Y

Anti-science sentiments hurt policymaking, writes Michael Mann: "Challenges to policy proposals for how to deal with this problem should be welcome -- indeed, a good-faith debate is essential for wise public policymaking. But the attacks against the science must stop. They are not good-faith questioning of scientific research. They are anti-science. How can I assure young researchers in climate science that if they make a breakthrough in our understanding about how human activity is altering our climate that they, too, will not be dragged through a show trial at a congressional hearing?"

Graphic design interlude: A generator for terrible company logos.

Domestic Policy

The Obama administration's immigration enforcement "successes" have costs, writes Seth Freed Wessler: "The enforcement programs that Obama supports purport to target immigrants convicted of serious crimes and to stop guns and drugs from crossing the border; the reality is that they are driving a system that’s come unhinged. In the three years since Hossain was expelled from Texas, a million other people were removed from the U.S. An enforcement structure that looks anything like the one both parties have built can do little better than indiscriminately deport any non-citizen caught in its expanding net, no matter their ties to the U.S. or their immigration status."

New Jersey governor Chris Christie has canceled the largest infrastructure project in America: http://bit.ly/b91qJ4

The FCC is reforming cell phone bills, reports Cecilia Kang: "Consumers are complaining in record numbers about their wireless bills, and the FCC has promised to act. Next week, the agency will unveil a proposal to address 'bill shock' by requiring that carriers notify users of overcharges and sudden increases in their bills. But advocacy groups say the FCC has barely begun to address the massive problems generated by increasingly bewildering phone bills. As cellphones are 'bundled' with television and Internet services, and with the exploding number of applications available for smartphones, consumer groups say bills have become multi-page puzzles."

HHS is backing away from claims that health care reform will expand Medicare choice, reports Jennifer Haberkorn: "Sebelius had told an AARP conference in Orlando last week that next year 'there will be more Medicare Advantage plans to choose from,' according to prepared remarks e-mailed to reporters and posted on HHS’s website on Monday. Grassley’s staff asked HHS to back up the statement, an aide to the senator, who has long been skeptical of Democrats’ claims about the health law’s impact, told POLITICO. As Grassley’s office was drafting a formal letter to Sebelius questioning the claim, the speech text was altered on the HHS web site without noting the change. The statement about more Medicare Advantage plans was deleted and now reads, 'there will be more meaningful choices.'"

New Jersey's transit cuts are short-sighted, writes Paul Krugman: "Here’s how you should think about the decision to kill the tunnel: It’s a terrible thing in itself, but, beyond that, it’s a perfect symbol of how America has lost its way. By refusing to pay for essential investment, politicians are both perpetuating unemployment and sacrificing long-run growth. And why not? After all, this seems to be a winning electoral strategy. All vision of a better future seems to have been lost, replaced with a refusal to look beyond the narrowest, most shortsighted notion of self-interest."

Jonathan Cohn thinks there are silver linings for liberals in a Republican Congress: http://bit.ly/aRSRms Jonathan Bernstein dissents: http://bit.ly/9cffT0

Food stamps shouldn't pay for sodas, write Thomas Farley and Richard F. Daines: "The federal government bars the use of food stamps to buy cigarettes, beer, wine, liquor or prepared foods like hot deli sandwiches and restaurant entrees. Still, the program, which is supposed to promote nutrition as well as reduce hunger, has a serious flaw: food stamps can be used to buy soda and other sweetened drinks. Medical researchers have increasingly associated the consumption of sugar-sweetened beverages with weight gain and the development of diabetes. Over the past 30 years, consumption of sugary beverages in the United States has more than doubled, in parallel with the rise in obesity, to the point where nearly one-sixth of an average teenager’s calories now come from these drinks."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: White House.

By Ezra Klein  | October 8, 2010; 7:13 AM ET
Categories:  Wonkbook  
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Next: Welcome to the anti-stimulus

Comments

"But for that to happen, the economy needs to stop offering plausible crises every six months. And on that, it's not cooperating."

Stupid economy. It must be a Republican!

Posted by: Kevin_Willis | October 8, 2010 8:08 AM | Report abuse

"New Jersey governor Chris Christie has canceled the largest infrastructure project in America:"

That's my man! I like infrastructure projects as much as the next guy, but Christie is watching out for his state and, despite how much he could really use a new storage shed out back or a kitchen remodel, he's looking at his budget, says he doesn't know where the money is going to come from, and killing the project.

Putting his money where is mouth is, in other words.

And it may be gone, but not forgotten. He could also be trying to shake down the feds for more money. Or New York. Always a possibility.

Posted by: Kevin_Willis | October 8, 2010 8:14 AM | Report abuse

"has a serious flaw: food stamps can be used to buy soda and other sweetened drinks."

Why, you oppressive, right-wing zealot, you! I know you must be, because when I was in a debate with a bunch of liberals about ten years ago, my suggestion that food stamps should not be used to purchase sugared soft drinks or chips (based on an experience I had of watching a morbidly obese family--every one of them was morbidly obese, parents, kids, etc)--purchase almost nothing but name-brand soft drinks and Doritos and Cheetos, and pay with all with foodstamps (I was a young, recent convert to conservatism at the time of that event, and boy did it rankle me as I counted out pennies for my generic cans of vegetables and ramen).

Because I thought foodstamps ought to be tightened so sugared soft drinks at nutrionless snacks would be excluded, I was uniformly opposed by every liberal on this list. A heartless, right wing thug, was I!

Now, Thomas Farley and Richard F. Daines are apparently also right wing thugs. Interesting.

Posted by: Kevin_Willis | October 8, 2010 8:29 AM | Report abuse

They said more money is equals to more progress but it turns out that there are also more problems that goes with it and unless there is a clear solution to all problems in the country then money will always be washed away.

http://www.blog.donaldbrownliefleming.com

Posted by: DonaldBrownlieFleming | October 8, 2010 9:11 AM | Report abuse

If businesses are worried that they won't be able to seize other people's property without being able to show that they have a lien on it, that's the kind of insecurity they SHOULD have. It is not a mere technicality to show that you own the note of the house you want to foreclose on--it is the single-most important legal requirement.

If we are going to say we are a nation ruled by law, the law has to apply equally to every party in a contract. This is just a case where the purported lienholders didn't bother to fulfill their obligations to the contract, and now they want the contracts changed so they don't pay any price for it. Not to mention if this bill had passed, the federal government would have been trampling on every states rights to decide who is a notary and how the notarization process works. Good for President Obama for vetoing this piece of crap.

Posted by: julie18 | October 8, 2010 9:16 AM | Report abuse

"Food stamps shouldn't pay for sodas, write Thomas Farley and Richard F. Daines"

Yesterday, Republicans are ridiculued for suggesting unemployment benefits shouldn't pay for illegal drugs. Today, we get a liberal brand of paternalism on wonkbook.

This plan isn't going to work for any household that has a source of income in addition to food stamps. In most cases, their purchases won't be any different than if you gave them cash with no strings attached.

See this indifference curve analysis to see why:

http://bcjournal.org/dev/wp-content/themes/BCJournal/images/articles/2006-caseForCash-figure-01.gif

If a family has $200 of its own money and $250 worth of food stamps for its monthly food budget, and it really wants to spend $16 on several cases of Pepsi, restrictions on the food stamps aren't going to matter.

Outside of the indifference curve analysis, 7/8 Americans aren't on food stamps, and a far greater proportion than 1/8 are overweight or obese (though the overweight bucket catches quite a few athletes in tip top shape).

This policy might reduce soda consumption slightly at the margins, but in all likelihood it won't make a difference.

Posted by: justin84 | October 8, 2010 9:31 AM | Report abuse

I've gotta say I LOVE Chris Christie (in a completely fiscally conservative kind of way).

In years past Governors Corzine or McGreevey would have not only shoved it through but also winked at cost-overruns. Now, Transportation Secretary Ray Lahood is coming to try to find other ways to do this instead of on our dime.


And to Mr Krugman its not the fact that we don't want to pay for needed infrastructure, its the fact that its always over on time, always over on budget, many times never competitively bid. Its amazing that liberals will scream when the corporate world "wastes money" in their minds but billions in cost over-runs in the public sector are just shrugged off by them.

Maybe Christie saw what happened/is happening in Boston and didn't want another fiasco like that when already our transportation fund is almost depleted. But hey let's keep throwing good money after bad, right?

http://en.wikipedia.org/wiki/Big_Dig

Posted by: visionbrkr | October 8, 2010 9:42 AM | Report abuse

It's a little weird to hear Ezra Klein echo Andrew Mellon during the Great Depression (Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate).

The rot in our financial system is where it has been from the beginning, in the banks and bank-like entities that created the crisis through fraud and mismanagement. Our economy will remain stagnant as long as the administration insists on pushing off the day of reckoning for the big banks. TARP just preserved their zombie corpses a little longer.

Posted by: tiburke | October 8, 2010 10:03 AM | Report abuse

"Anti-science sentiments hurt policymaking, writes Michael Mann: "Challenges to policy proposals for how to deal with this problem should be welcome -- indeed, a good-faith debate is essential for wise public policymaking. But the attacks against the science must stop. They are not good-faith questioning of scientific research. They are anti-science. How can I assure young researchers in climate science that if they make a breakthrough in our understanding about how human activity is altering our climate that they, too, will not be dragged through a show trial at a congressional hearing?"

You can't, unless you depoliticize the issue.

A good place to start if you are concerned is to slice America's share of that half trillion in annual fossil fuel subsidies.

http://voices.washingtonpost.com/ezra-klein/2010/10/wonkbook_the_pete_rouse_reader.html

If you cut military spending, you might see a larger risk premium on oil too (rather, the risk would be paid via the price oil rather than through taxes).

Posted by: justin84 | October 8, 2010 10:20 AM | Report abuse

From Krugman: "We are no longer the nation that used to amaze the world with its visionary projects.'

Perhaps because we are now the nation that spends money it once spent on visionary projects on entitlement programs.

Posted by: bgmma50 | October 8, 2010 10:28 AM | Report abuse

@justin84: "Yesterday, Republicans are ridiculued for suggesting unemployment benefits shouldn't pay for illegal drugs."

I think the point is that it's going to cost money to drug test everybody receiving unemployment. And will not improve things for the unemployed, or employers, or the local governments. It will also not save money. It's political pandering, with tax payer dollars. It's not that unemployment benefits shouldn't pay for illegal drugs (they should not), but the cure is worse and just as expensive, if not more so, than the disease.

"If a family has $200 of its own money and $250 worth of food stamps for its monthly food budget, and it really wants to spend $16 on several cases of Pepsi, restrictions on the food stamps aren't going to matter."

Is that generally the case? I only have a few anecdotal experiences, but in those cases, those people were buying a little regular food, mostly junkfood crap, and paying with for it all with foodstamps and maybe a little cash if they went over. You can't spend foodstamps (at least, not like you do on food) to get alcohol, tobacco, clothes, videogames, rent DVDs, etc. Cash is saved for those expenditures. Limiting foodstamps from covering sugared sodas (and, frankly, nutritionless, sodium-loaded snacks) would make a big dent in how much of our national obesity epidemic our tax dollars are paying for.

Might not make a huge difference nationally, but at least it would prevent our tax money being spent on junk food and crap by people who need to be eating and drinking healthier stuff.

Posted by: Kevin_Willis | October 8, 2010 10:32 AM | Report abuse

@bgmma50: "Perhaps because we are now the nation that spends money it once spent on visionary projects on entitlement programs."

Also, didn't Obama just cancel the manned mission to Mars. And scale back our space program generally?

And I still remember--back in the days when I still fancied myself a liberal--as lefties railed against the Strategic Defense Initiative (because it would have taken not 1, not 2, but almost 25 incredible technological innovations to even work!) and railed against what, at the time, would have been the most kick-butt particle collider in the world, in Texas, because it was "pork for Texas" and we "couldn't afford it" (this was under George H.W. Bush) . . . and the super-duper collider got cancelled.

Who is it that keeps cutting the legs out from under America's visionary projects, again?

Canceling Best-of-the-Best super-colliders (and surrendering that territory to Europe) and manned missions to Mars and scaling back our space program is apparently cool with Krugman, but canceling a transit tunnel project in New Jersey represents America having lost it's way, and being unable to tackle visionary projects?

Why is it I always imagine Krugman wearing his nobel prize on a chain around that. "What? You think I sound like an idiot? Uh-huh. And do you have one of these? No? You don't have a Nobel prize? Then I guess you can shut the **** up, b**ch!"

Posted by: Kevin_Willis | October 8, 2010 10:40 AM | Report abuse

I've been very impressed how the cash registers at my local grocery store can identify products that qualify for purchase through my (soon to be defunct thanks to Obamacare) Medical Savings Account. If the technology exists to do that, it exists to enable us to exert much more control over what is purchased with food stamps than ever before. And I'm all for it. Like Kevin, I have stood in line at the grocery store many a time simply aghast at the garbage I see being purchased with food stamps.

And yes, now that Obamacare is going to require me to pay for the lifelong medical care of those who eat their way into type two diabetes, I am beginning to take a very keen interest into what they shovel in their mouths.

Michelle Obama for Food Stamp Czarina! Let's completely revamp the rules on what can and cannot be purchased.

Posted by: bgmma50 | October 8, 2010 10:47 AM | Report abuse

That a Republican House member sponsored a bill, which both parties in both houses passed (without hearings or debate), which further erodes private property rights should send a message to all those Tea Party activists: the GOP doesn't care in the slightest about your rights. They care only about corporate rights.

The same banks that acted maliciously in writing sub-prime loans and then marketed basically fraudulent securities such as CDOs then *surprise* has issued by some estimates over a million fraudulent foreclosure filings.

Who could have possibly imagined that this corrupt industry would do no better cleaning the mess than making it?

Friends, if the GOP regains the House, expect more of this cowboy capitalism that will ride roughshod over your expectation that the law is balanced and protects your rights.

Posted by: RalfW | October 8, 2010 11:06 AM | Report abuse

Kevin,

I think your analysis on the drug test issue is entirely correct. However, that is because I share your values.

Someone who is strongly opposed to drug use will think that spending millions on drug tests to strip benefits from 500 freeloading drug addicts (and discourage thousands more from using drugs) passes the cost benefit test.

I consider it throwing good money after bad, but I can see why the social values crowd might like the idea (clearly some do because otherwise Republican pols wouldn't propose it).

"Is that generally the case? I only have a few anecdotal experiences, but in those cases, those people were buying a little regular food, mostly junkfood crap, and paying with for it all with foodstamps and maybe a little cash if they went over."

Generally speaking, yes. Targeting soda in particular isn't going to make a huge difference because its going to be a small part of the grocery budget. A 2 liter costs what, $2? If you're going to spend $100 on groceries and you've got even $10 in your pocket, you'll probably pick one or two 2 liters of Pepsi if your family likes to drink Pepsi. Might even do so on principle if you're ticked off that the government took that item of the list.

You'd have to target quite a bit of junk to really make a difference, and then if a family had a decent amount of their own money to contribute their shopping cart might well look pretty much the same. Even a family without other resources might decide to trade with someone who does (e.g. you buy $12 of soda and chips and I'll buy $14 worth of cereal, milk and juice for you).

More here (see the end of the presentation).

courses.cit.cornell.edu/econ101jpw/slides/consumer%20theory.ppt

Posted by: justin84 | October 8, 2010 11:56 AM | Report abuse

"That a Republican House member sponsored a bill, which both parties in both houses passed (without hearings or debate), which further erodes private property rights should send a message to all those Tea Party activists: the GOP doesn't care in the slightest about your rights. They care only about corporate rights."

Once you abandon a commitment to property rights, this is the inevitable result. Your property is subject to political horsetrading. It's not about who's property it is, but who can benefit from that property being transfered by government.

If you're a rich banker, it's your salary. If you're a poor homeowner, it's your home.

Your side is not always going to win.

Posted by: justin84 | October 8, 2010 1:13 PM | Report abuse

"Once you abandon a commitment to property rights, this is the inevitable result. Your property is subject to political horsetrading. It's not about who's property it is, but who can benefit from that property being transfered by government.

If you're a rich banker, it's your salary. If you're a poor homeowner, it's your home"

That's a ridiculous analogy. Bankers had their businesses rescued by the feds, and are angry that they had to restrain themselves from taking cash from the taxpayers for their failed businesses. These homeowners were on the verge of being rooked out of due process from the legal system. They asked for no subsidy for this--they were just going to be rooked. No analogy at all.

Posted by: ciocia1 | October 8, 2010 1:44 PM | Report abuse

"That's a ridiculous analogy. Bankers had their businesses rescued by the feds, and are angry that they had to restrain themselves from taking cash from the taxpayers for their failed businesses. These homeowners were on the verge of being rooked out of due process from the legal system. They asked for no subsidy for this--they were just going to be rooked. No analogy at all."

Fair point. Perhaps the homeowners were screwed more.

One can argue over the relative amounts - perhaps over the long haul taxes on rich subsidize benefits for the poor and middle class. Or perhaps corporate welfare is enough of an offset.

But the point is that both political parties have given up on private property rights. You can see it in the language - tax cuts are "giving" money to the rich. It works the other way too, as you have seen. Both parties are a disgrace.

Why have faith in this system?

Posted by: justin84 | October 9, 2010 12:53 AM | Report abuse

"But what killed the recovery was the European debt crisis."
Blame Europe, Ezra? How lame!
Come on, how much business does the US with the PIIGS? Their debt crisis ruined the "recovery" for you? What nonsense! There wasn't any recovery in the US before the crisis, and there isn't a recovery now, it's just stagnation on a high unemployment level. And that isn't the fault of us Europeans at all.

Posted by: Gray62 | October 9, 2010 4:42 AM | Report abuse

"Fair point. Perhaps the homeowners were screwed more.

One can argue over the relative amounts - perhaps over the long haul taxes on rich subsidize benefits for the poor and middle class. Or perhaps corporate welfare is enough of an offset.

But the point is that both political parties have given up on private property rights. You can see it in the language - tax cuts are "giving" money to the rich. It works the other way too, as you have seen. Both parties are a disgrace."

No, who got "screwed more" is not the point. Bankers whose institutions were rescued were not entitled to their salaries--the salaries after rescue were not their "property" or their "right." They got those continued salaries through the largess of the government. Without the feds, they would be one the street.

Everybody, however, has a right to due process under the law. That means nobody can snatch your property, unless they prove through the legal system that they have the right to.

The wealthy have become the new opressed group, despite the fact that they ride the same public roads, enjoy the same infrastructure, and enjoy the same physical protection as everybody else. Ask a businessman in some underdeveloped country how hard it is to get rich in a place with no roads, no potable water, no literate workforce, and see what wealthy Americans take for granted in their "oppression."

Posted by: ciocia1 | October 9, 2010 9:18 AM | Report abuse

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