Foreclosure maps

by: Paul Rosenberg

Sat Nov 20, 2010 at 11:00

[Click to Enlarge in New Window]

See Chicago:

[Click to Enlarge in New Window]

where it's said:

The map shows one zip code on Chicago's South West Side, 60629.

This neighborhood has been gutted. The red dots represent all of the properties in that zip code that are either in pre-foreclosure or are already bank owned.

Now, according to the Washington Post, Chicago has become a foreclosure-free zone.

It wasn't the banks or judges that instituted the moratorium, because they were still moving cases forward at a rapid clip. The holdup was elsewhere: at the sheriff's office.

Sheriff Thomas J. Dart, whose office is responsible for physically evicting delinquent homeowners, announced Oct. 19 that his deputies would "no longer be doing the banks' work for them anymore."

See Miami:

The coming battle

by: Mike Lux

Mon Oct 18, 2010 at 13:30

But for the purposes of this post, I want to take a moment to look ahead to the next big battle that will face us no matter what happens on election day. Our next big battle is an unavoidable fight about economics that goes to the core of whether the economy will start to improve, and whether the big banks will be in control of our government. It will be at least initially less a legislative fight than a battle over how Obama and his team will respond to the latest huge challenge in front of them, the foreclosure mess. Our economic system has been done far more damage by the last decade of recklessness in the financial industry than most conventional economists and policy makers understand, and the Bernanke/Paulson/Geithner rescue revived but did not restructure the financial industry. The toxic assets on the books of the big banks, which are primarily in the terribly damaged real estate sector, were never resolved, and are still sitting there like a huge millstone hung around the necks of these banks. The only reason the banks looked healthier in the last 18 months is that their lobbyists were able to get the accounting board to change the rules so they could value those real estate assets at whatever imaginary number they needed to in order to get profits and bonuses showing up on their books again.

The banks' strategy for getting this mess cleaned up was to run huge numbers of people through this fraudulent and obscene foreclosure mill process, but the law and community organizations have caught up to them, and the process is bogging down into a slow moving morass that, for the second time in 2 years, is threatening the very existence of these big banks. Herein lies our country's next big political and economic battle. The bankers who got themselves and all the rest of us into this mess will once again argue that they are too big to fail, that the health of our entire economy depends on their ability to cut legal corners with homeowners' legal rights, and that they might even need other kinds of bailouts from the government to survive. The argument will be that if we don't push all these foreclosures through ASAP, the entire housing market will sink even lower into the pit it is already in, and the economy will go from weak to terrible. And if these banks themselves fail, we will be told, we will see another great depression set in.

There are other policies that could be pursued, though. Thoughtful economists have been putting out a mix of proposals that could be successful in keeping more people in their homes, stabilizing home prices, and other measures that would help rebuild the middle class that has been so harmed by the last decade's economic trends. These policies include a large scale principal reduction program for distressed homeowners, creating a right to rent for homeowners whose home prices have fallen so much their mortgages are under water. Such policies would create big losses for the banks, but given all their profits and bonuses over the last decade, I'm certain the Wall Street tycoons and government regulators could figure out a way to keep these banks going. The cowboy traders for these companies probably wouldn't be getting any bonuses for a while, and that would cause some howling, but I think our system would survive their having to cut back purchases of $6,000 bottles of wine for a while. It might even force these banks to restructure themselves, perhaps even breaking themselves apart (there would be nothing more healthy for our economy than that event). So the bank lobby and their sycophants in the media will be in high gear, trying to make sure nothing happens that would scale back their power and profits, threatening us with the end of the world, but we need to push back hard against them.

This debate is different from the one we went through a couple of years ago, the main reason being what we went through over the last couple of years. There is no political will in either party, no matter how much many politicians and policy makers want to help their banking industry friends, for another big bailout of Wall Street. If the bank lobby could sneak something through without anyone noticing, as they came very close to with this mortgage modification bill Obama vetoed, that could work, but having failed at their first attempt and the foreclosure fraud crisis now being in the center of the public eye, that will be tougher to do now. With tea party populists and progressives united in not wanting to bail out the banks again, and with the immense unpopularity of TARP, straightforward bail out bills will be very tough to pass. Bernanke will use all his tools to help grease the wheels for the industry, but he doesn't have as many tools in the toolbox as he used to, and if the actual law on these foreclosure proceedings is not changed, Bernanke may not have the ability to help as much as he would like. The biggest question at this point is the Obama administration, and they are genuinely divided on how to move forward. There are still those in powerful positions inside the administration who believe that the fate of the economy is inextricably tied to the financial well being of the Wall St financial sector. There are others inside, especially Elizabeth Warren but also influential people like Volcker and Goolsbee, who are more skeptical about the big banks being the end-all and be-all of the country's economic health.

How all this plays out will be the central, fundamental issue by far in how the next two years of this administration turns out. The economy is too damaged to get healthy without a restructuring of the housing sector in a way that actually benefits the middle class. If the banks win this battle, I fear we are stuck with deflation, high unemployment, and low housing prices stretching several years out, and in that circumstance, the President's future political prospects look pretty bleak. However, if the President sides with homeowners on these issues, and creates a path out of this mess that actually helps strengthen the middle class, he will have new momentum going forward. Whatever Congress is elected a couple of weeks from now, this issue will be mostly resolved within the administration, and if Obama proves himself a champion of the middle class in opposition to the bank lobby, he will be well-positioned for future fights no matter how the 2010 elections turn out.

Populist Surge or Muddled Message Overwhelmed by Money?

by: Mike Lux

Wed Oct 13, 2010 at 17:30

If the Obama team hadn't decided that outside efforts to help candidates were to be discouraged at all costs, and our groups working on campaigns weren't being outspent 7-1 by the Chamber of Commerce with their foreign money, the Koch brothers, and Karl Rove's banking, oil, and insurance company buddies, I think we'd have a better than even chance to do better than expected and hold the House and Senate. The Republicans' completely secretive corporate money is just overwhelming us in a lot of places, and it is spreading the field by putting lots of formerly safe seats into real danger. It is easy to imagine losing 55 or 60 seats in the House.

But this whole populist anti-Wall Street, anti-corporate special interest thing is still stirring around on our side, too, and there is real evidence that it is working for Democrats in a lot of key races. Check out this number from a Bloomberg poll:

BLOOMBERG NATIONAL POLL: Would it make "you more likely or less likely to support a particular candidate .... [if that] Campaign was aided by advertising paid for by anonymous business groups"? More likely: 9% ... Less Likely: 47% ... Would Not Matter: 41% ... Not Sure: 3%

We've been seeing numbers like that all over the place in different races, and more and more Democratic candidates are picking up on the message and going on offense against the sleazy corporate ads flooding their districts. Meanwhile, activists all over the country are doing local demonstrations taking on these corporate advertisers with their undisclosed donations: there were 52 events around the country by MoveOn volunteers alone. And now the White House and DNC are getting into the act, attacking the Chamber and American Crossroads and their mysterious donations from who knows where.

If voters begin to understand that Democrats really are on their side, and will fight back against these shadowy special interests with their hundreds of millions in dollars coming from who knows where, our candidates can win a lot of these close races even with the outside groups outspending them so badly. But they also have to hear loud and clear from Democratic elected officials that they are standing up to these special interests when it matter the most, which brings me to my final point of the day: we need a far clearer and stronger message from the White House on whether they will take on the big banks that have committed foreclosure fraud. So far on this issue as it has emerged over the last couple of weeks, when the White House had to make a choice on policy, the President has mostly done the right thing: his veto of that make-foreclosures-quick-and-easy nightmare of a bill that snuck through Congress in the dead of night was incredibly important. And while I would have chosen to go with a complete foreclosure moratorium, I give the White House a lot of credit for having Gibbs come out yesterday in support of the state AGs in their investigation of this fraud debacle, and in saying these simple but crucial words that probably hit some of these fraudulent bankers like a punch in the guts: "We just want to take the just and necessary steps to ensure that the process is being followed legally." The reason that simple idea is so crucial is that banks and foreclosure mills are desperately moving to try and find ways to get around the inconveniences of the laws on the books so that they can get these foreclosures processed. With the White House vetoing their first attempt to circumvent the law, and saying clearly they are backing AGs in making certain that the law is actually adhered to, it gives the bankers and their foreclosure mills a massive problem.

So that's mostly to the good, and plays into the populist surge that democrats are trying to ride in the final weeks of the campaign. What is terrible is the messaging coming out of Tim Geithner's mouth. Check out this convoluted stuff:

Charlie Rose: You're encouraging banks to declare a moratorium on foreclosures?

Tim Geithner: No, I wouldn't say it that way. I think that you know what you're seeing in housing still now is a national tragedy, still very, very difficult. You know, again, this was a crisis caused by a lot of people were taken advantage of, a lot of people were too optimistic about what they could afford in terms of a house, lot of people were speculating in real estate, and a lot of innocent victims got caught up in the consequences of those basic mistakes. You saw, you know, the nation's largest banks that ran these servicing businesses, not invest anything like what they needed to, to run that business effectively in a downturn like that. And you're seeing the consequences of all those mistakes play out still across the American economy. Now, you've seen some banks suspend temporarily the foreclosure process so they can just make sure that they're not causing any injustice to the borrowers and that's very important for that to happen. And we're going to -

Charlie Rose: So you're pleased to see that happen.

Tim Geithner: I think where that's happening again the suspension is to make sure they're not causing any injustice is very important, but I think it's important to recognize, Charlie, that if you -- a national moratorium would be very damaging to exactly the kind of people we're trying to protect, because the consequence of that would be in neighborhoods that have been most affected by the foreclosure crisis, where you see lots of houses on the block empty, unoccupied, what it means is those communities will be living longer with houses unoccupied, with more pressure on their house price with the people still in their houses. That would be very damaging, and so again we want to make sure we're holding these services accountable, that they're not causing any injustice to people who can afford to stay in their home, and we're going to make sure we're careful in doing that. But we also want to make sure that we're not going to make the problem worse.

Geithner here defends the banks, not only giving them a free pass on the fraud going on the foreclosure market, but actually saying they should get credit for temporarily suspending the foreclosure process "so they can make sure that they're not causing any injustice to the borrowers". Does anyone besides Geithner and the occasional Ayn Rand acolyte believe that these bankers are such moral, salt of the earth types that they care about the injustice being done to mortgage holders? It is this kind of messaging that makes a muddle of what Democrats are trying to do nationwide. The explosion of the mortgage fraud issue gives us our best opportunity yet to re-frame this election around populist economic issues that show Democrats to be fighters for the middle class and against the big banks and other special interests. The White House is on the right track ingoing after the Chamber and Karl Rove's secretive and possibly foreign funding. They are doing the right thing in vetoing that terrible make-illegal-foreclosures-fast-and-easy bill, in backing the AGs, and in backing the rule of law on foreclosure fraud. Now they need to get their messaging right: make it clear, tough, and not in doubt as to being on the side of homeowners against the banks who are trying to rip people off.

Anyone confidently predicting what will happen in this election is full of themselves and will probably be proven wrong: no one knows how this puppy will turn out. The money and voters' anger about the economy could overwhelm the Democrats, especially if they mush up their message. But an anti-special interest, anti-secretive corporate funding message gives us a real chance to make the results different than we thought.  

Exploding foreclosure fraud issue: An opportunity for Democrats to turn the tide

by: Mike Lux

Mon Oct 11, 2010 at 13:30

The foreclosure fraud issue has been brewing a long time now. Groups like SEIU, National Peoples Action, PICO, and other community organizations have been organizing on it for many months now, and have been doing the legal research needed to start nailing these foreclosure mills and fraudulent banks. With the issue now exploding, I think there is a real chance to shift the debate to a new level. While Democrats have been slow in understanding or picking up on this issue, the good news that they are still capable of standing up for working families on an issue like this. It is Democrats who have overwhelmingly been the ones to stand up to the banks on this issue- Obama with his veto, Pelosi and Reid and many other Democrats in Congress who have taken strong stands on the issue, and Democratic Attorneys General around the country who have taken on the banks on their fraud. The Republicans, with only a couple of exceptions have been overwhelmingly silent on the issue, and in some cases, like the MI AG, have come out against doing anything to help consumers (because he didn't want to "politicize" the issue). As Digby summarized it:

A lot of people are trying to say that all politicians are the same, that your vote doesn't matter. Well, let's look at the evidence. In the last month, here are some news stories about politicians.

Democrat Alan Grayson Calls for Foreclosure Moratorium

Democrat Ohio Secretary of State Attacks Foreclosure Fraud

President Obama Pocket Vetos Pro-Bank Bill That Would Increase Foreclosures

Democrat Harry Reid Calls for Foreclosure Moratorium

Democrat Nancy Pelosi, California Democrats Calls for Investigations of Foreclosure Fraud

Democrat John Conyers and Carolyn Kilpatrick Call for Foreclosure Freeze

Democrat Ohio Attorney General Attacks Foreclosure Fraud, Sues GMAC

Democrat Illinois Attorney General Asks for Foreclosure Halt in Illinois

Democrat Maxine Waters Calls for a Foreclosure Freeze

Democrats Alan Grayson, Barney Frank, and Corrine Brown Call for Fannie to Stop Working with Foreclosure 'Mills' Being Investigated for Fraud

Democrat Earl Blumenaur Asks for a Foreclosure Freeze in Oregon

Democrat Jeff Merkley Calls for a Special Investigator for Foreclosure Fraud

Democrats Luis Gutierrez and Dennis Moore Call for Investigations of Bailout Recipients Engaging in Foreclosure Fraud

Democrat Attorney General in California Asks for Foreclosure Halt

Democrat Attorney General in Massachusetts Asks for Foreclosure Halt

And on and on and on....

Notice a pattern here? If not, let me give you another hint.

Republican Richard Shelby Tries to Weaken Rules, Kicks Regulators

I wonder why banks and corporations are spending $5 billion on this election, nearly all of that for Republicans.

From what candidates on the ground are telling me, though, it is still the business reporters who have been covering the issue, not the political reporters, and Democrats are not necessarily getting the political credit they deserve. Reporters are still trying to put the who-done-it pieces together on the scandal rather than being focused on which politicians are standing up to the bankers on the issue. We need to make sure voters understand who is fighting to make sure the banks and foreclosure mills are held accountable.

Democrats should not let this opportunity slip away from us: if we embrace this issue politically, telling a story about how we are the ones rooting out corporate corruption, we are the ones standing up to the banks when they try to defraud consumers, this could be very powerful, and it could strongly feed that broader frame around Democrats taking on special interests on behalf of the middle class. With this issue now front and center, Democrats should seize the initiative, put Republicans on the spot for why they are doing nothing to stand up to the banks. This could be one of the election dynamic turning things that upends the Republicans' ability to make their closing argument about government being the root of all evil stick. The White House right now is sounding too wonky and even-handed on this issue: they need to make clear whose side they are on.

One other thought on all this: I think the foreign money being used by the Chamber thing adds to the dynamic: their ads are everywhere. I have always believed that when you are being outspent in a campaign, you have to turn the tables by targeting all the money being spent against you. If the foreclosure fraud crisis is in the front pages every day, reminding voters of corporate corruption issues, and we can be relentlessly raising questions about where does the money come from for all those attack ads by the Chamber- Wall Street, foreclosure mills, and foreign companies?- I think the anti-corporate special interest frame just keeps building. Where I hope we can get to is that every time people see those Chamber ads, or other ads from groups they have never heard of, they are thinking of money from Wall Street, foreclosure mills, and foreign companies.

We have all seen last month breaking news and/or new frames shift electoral dynamics. The collapse of health care in the fall of '94 drove Democratic base performance into the dirt, and turned a tough year into a route. The fundraising scandal that broke in Oct of '96 changed the dynamics just enough to keep us from retaking Congress. The focus on impeachment in the fall of '98, and our "it's time to move on and deal with the issues that really matter" pushback turned a likely Democratic slaughter into a good year for us. The Foley scandal in Oct of 2006 stopped a potential Republican comeback dead in its tracks, and turned a close call into us easily retaking Congress. I think this foreclosure fraud crisis could be the same kind of deal. It allows us to take anti-special interest frame we have all been building for a while, and bring it to a whole different level. But we need to seize the issue, and take the credit we deserve for doing the right thing in fighting for consumers against the power of the big bank fraud. If we are willing to wholeheartedly take this mantle on, the election dynamic has the real potential for a last minute shift.  

Obama comes through on foreclosure issue: what's next?

by: Mike Lux

Thu Oct 07, 2010 at 18:00

But then, that most delightful and rare of Washington moments happened: the system worked. Consumer advocates started raising hell on the blogs and in traditional media, the White House started looking more closely at the issue, and literally within a matter of hours, Obama announced that he was not going to sign the bill. No long, painful, drawn out internal debate at 1600 Pennsylvania. No twisting round trying to split the middle on the issue. As soon as the issue was raised, the White House team focused on it, and made the right decision quickly. Elizabeth Warren, the new Assistant to the President and Treasury Secretary, weighed in. Pete Rouse, the new Chief of Staff, got engaged immediately. And the President made the right decision.

So what did we learn? First, that exposing sleazy dead-of-night deals cut by the special interests does sometimes work. And second, that having good people in key government roles really does matter. Obama might well have done the right thing without Warren and Rouse there, but it sure did happen quickly and easily with them around.

So, okay, I haven't lost it: I know that not all these decisions are going to go the right way as far as progressives and consumer advocates are concerned. But I think it is fair to ask ourselves what happens next and how the progressive community should respond to it.

I know the progressive community has a lot of folks who strongly dislike Obama, and won't change in that view. I know others who still strongly support him. (For myself, I have been in the middle- critical on quite a few things, supportive on others). But the tensions between Obama and many in the progressive community have been quite palpable for quite awhile now, on both sides. The question now is how progressives respond if Obama does start to move in a more progressive direction.

I know all the past sins people commenting on this post will recite (commenters, start your engines), but look at the past few weeks: the move toward more progressive and populist rhetoric on the campaign trail; the appointment of Warren; insisting on letting the Bush tax cuts for those making over $250,000 a year expire; the replacement of Rahm with Pete Rouse, who is thought by many inside the White House to be more sympathetic to progressive points of view than Rahm was. Based on what I am hearing, there will be more outreach to progressives over the next several weeks than there has been for a while.

So is it all nirvana? Is Obama turning into Bernie Sanders? Of course not. But if the Obama White House starts a concerted effort to reach out to progressives, and appoints some of them to key positions, and works with them constructively on more issues, does that change how the progressive community works with the White House?

I hope so. In the late '50s and early '60s, John and Bobby Kennedy did not start as avid civil rights advocates, and LBJ was cutting deals in the Senate for incredibly weak, watered-down civil rights bills. But the movement pushed them, and they responded by eventually moving left. Same with FDR and labor in the 1930s, and Lincoln and the abolitionists in the 1860s. Those movements had the flexibility and strategic sophistication to protest those Presidents when they needed protesting or work constructively with Presidents when they moved in the right direction- they didn't engage in a one size fits all tactic of protesting everything all the time. I hope the progressive community today has the strategic wisdom.

I don't know for sure what will happen next in the White House, or whether there will be more outreach and appointments and policy decisions us progressive activists cheer- it is way too early to tell. But progressives should be ready to move to meet the President halfway and work with him in the areas where he does move our direction, and we shouldn't always assume the worst. We should keep our healthy skepticism, push hard when we need to push, but be ready to engage when a door is opened to us to engage on.

Weekly Audit: Why Are Unemployment Benefits A Major Political Fight?

by: The Media Consortium

Tue Jul 27, 2010 at 11:17

Congress finally authorized an extension of unemployment benefits on Wednesday, providing a critical lifeline to families across the country and an absolutely essential boost to the economy.

Weekly Audit: The Hidden Casualties of the Great Recession

by: The Media Consortium

Tue Jul 13, 2010 at 11:24

by Annie Shields, Media Consortium blogger

The June labor market report announced that the unemployment rate is down from 9.7 to 9.5 percent and 83,000 private-sector jobs were created in June. Unfortunately, the situation isn't quite so rosy. As Annie Lowrey reports in The Washington Independent, the real cause of the drop in unemployment was not more jobs, but fewer workers. Hundreds of thousands of unemployed Americans have now been reclassified as "discouraged" workers who have not actively searched for work for four weeks. As such, they are no longer part of the system.

Housing and Opportunity: A Closer Look

by: The Opportunity Agenda

Wed Dec 16, 2009 at 11:44

—Although the foreclosure rate declined for the third straight month in October—decreasing by 3% between September and October 2009 to one in every 385 housing units—this rate is an increase of nearly 19% from October 2008.¹
—In September, 7.7% of all homeowners were behind 30 days or more on their primary—residence mortgages, up about 0.1% since August. This is a record rate comparing to the 5.2% rate of September 2008 and the 3.6% rate of September 2007.²
—Nearly 4.4% of payments on bankcard accounts were at least 60 days late, compared to 3.4% in September 2008. This is a 28.7% increase since September 2008.³

Weekly Audit: Protect Consumers, Not Wall Street

by: The Media Consortium

Tue Oct 06, 2009 at 12:47

By Zach Carter, Media Consortium Blogger

The economy is still getting worse. Foreclosures are surging above last year's epic highs and the unemployment rate marches upwards every month. As the misery grinds on, Wall Street lobbyists and their allies in Congress are pushing hard to distract the public from the real causes of the current global economic crisis. Corporate America is trying to pin the blame for our empty pocketbooks on President Barack Obama and the phantom socialist menace, and cable news pundits are taking the bait.

As David Korten explains in a blog post for Yes!, this surge of distractions is a conscious political strategy designed to sabotage reform. "Wall Street's greatest fear is that the public might demand Congress and the president shut down the casino," Korten writes. "Any issue that shifts attention away from Wall Street and pins the blame for job loss and mortgage foreclosures on President Obama works in its favor."

The banking lobby is kicking and screaming over President Obama's plan to overhaul consumer protection in finance. As a result, the battle over the proposed Consumer Financial Protection Agency (CFPA) has become the most heated economic controversy in the nation's capital, even though the issue isn't controversial where ordinary citizens are concerned.

The existing hodgepodge of bank regulators completely failed to stand up for consumers as the housing bubble grew and burst. Our current bank regulators are charged not only with consumer protection, but safety and soundness regulation, which basically means making sure that banks don't fail. Preventing bank failures often means protecting bank profits, even when those profits come at the expense of communities. Instead of relying on the same inept and conflicted agencies, consumer regulation of credit cards, mortgages, student loans, payday loans should be funneled into a single, new agency with no other priorities: The CFPA.

As Greg Kaufmann details for The Nation, recent economic history isn't stopping Wall Street's favorite lawmakers from pushing against the CFPA. Kaufmann highlights some of the most outrageous comments from a hearing on the CFPA last week. Rep. Jeb Hensarling (R-TX) claimed that if the CFPA had existed a few years ago, there would be no ATMs or frequent flyer miles. David John, a researcher from the Heritage Foundation, said that employees of the new agency would spend too much time trying to find their new desks to actually do any regulating. Bank lobbyist Ed Yingling tried to erase the last ten years with his claim that "no real case has been made" for better enforcement of consumer protection in banking.

These are not serious arguments. They are intentional distractions designed to kill an obviously productive policy. Kaufmann's headline says it all: "Do They Take us for Schmucks?"

But loudmouth Republicans like Hensarling aren't the only politicians we need to keep tabs on. Plenty of lawmakers on the Financial Services Committee won't stand up and make crazy speeches about ATMs, but will still go to bat for Wall Street behind the scenes. As I emphasize in a piece for AlterNet, with outsized Democratic majorities in both chambers of commerce, conservative, pro-Wall Street Democrats pose just as great a threat to our economic security as loony Republicans.

If you think that sounds pessimistic, consider Ralph Nader, who Matthew Rothschild profiles in The Progressive. Nader knows corporate America has its hands on nearly every lever in the U.S. political system. Lobbyists don't just hurl money at lawmakers, they spend tremendous sums on misleading advertisements to sway public opinion. Rothschild quotes from a recent speech Nader gave on his current book tour. He argues that progressives don't just need concerned citizens on our side. They need concerned citizens with money to counter the flood of corporate cash in the political system.

"There is a poignance in listening to Ralph Nader these days," Rothschild writes. "Here is a man who, for the last 45 years, has hurled his body at the engine of corporate power. He's dented it more than anyone else in America. But he knows it's still chugging, even more strongly than ever."

Even when lawmakers talk tough about Wall Street, it's not obvious what's really going on. Senate Banking Committee Chairman Chris Dodd (D-CT) recently rolled out an extremely ambitious plan to overhaul the bank regulatory system. It has very little common ground with Obama's plan, and in some respects would be an improvement. Obama's plan is very strong on consumer protection and not much else. But Dodd's plan is so ambitious, it seems like a politically impossible waste of time, one that could easily delay reforms into next year. Dodd wants to consolidate all four bank regulators into a single agency to prevent a race to the bottom and strip the Federal Reserve of all of its regulatory responsibilities. They aren't bad ideas, but they have absolutely no political momentum. Dodd has been holding hearings on the financial crisis since 2007-- he could have started pushing for this plan a long time ago. By introducing it so late in the process, major legislative delays seem inevitable. The longer it takes to pass a regulatory bill, the more time the bank lobby has to water it down. Writing for Mother Jones, Nick Baumann suggests this may be exactly what Dodd intends.

"Maybe getting it done by 2010 isn't the point. Dodd is up for reelection that November. If he manages to win by talking populist while raising money from Wall Street, he'll have plenty of time afterward to figure out what to do next."

For now, the economy is still absolutely horrible. Writing for In These Times, David Moberg translates the statistics from the government's most recent unemployment report and deciphers some recent polling on the economy. Things are bad, and people know it. Many economists believe the recession may have technically already ended. The Gross Domestic Product, a statistical measure of the country's economic output, may no longer be declining. But the unemployment rate keeps going up. It was 9.8% at the end of September.

Moberg notes that if the rate counted the long-term unemployed who have given up looking and people who want full-time jobs but settled for part-time work, the unemployment rate is a staggering 17%. Over one-third of the 15.1 million would-be workers encompassed by the 9.8% unemployment rate have been out of a job for at least six months. Voters overwhelmingly believe that government policies have helped Wall Street, while just 13% think the government has given a lot of help to the average working person.

Economics and politics are inextricably linked. To strengthen our economic foundation, we need policymakers who are willing to stand up to corporate America and corporate media and serve the citizens who elect them.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Fixing the Foreclosure Problem

by: The Media Consortium

Tue Aug 11, 2009 at 12:25

by Zach Carter, TMC MediaWire blogger

The U.S. job market may be showing signs of life, according to a report issued by the Labor Department on Friday.  The unemployment rate dropped in July, something no economist expected. Under the most optimistic interpretation, the news indicates that the worst of the recession is finally behind us. But the scenario isn't really so rosy, as our government has yet to relieve the foreclosure pandemic. Even if unemployment is leveling off, there will be no economic recovery if the the foreclosure problem isn't fixed.

July's unemployment rate only fell from 9.5% to 9.4%, and even the most bullish Wall Street economists think the rate will hit double digits by the end of the year. The fact that July's tiny drop in unemployement counts for good economic news says a lot about how severely the economy has deteriorated over the past year and a half.

But when you dig a little deeper, the numbers get worse. As Tim Fernholz explains for The American Prospect, even though the unemployment rate dropped, the nation's economy actually shed 247,000 jobs in July. The rate was pushed down because 400,000 people gave up looking for a job in July; as such, they are no longer included in the statistic. So, while we "only" lost 247,000 jobs, we also lost 400,000 workers.

The government also adjusts its job loss figures for seasonal developments. When the Labor Department says we lost 247,000 jobs in July, that isn't the actual number-it's the number relative to what the Department considers a normal July. This summer has been unique for the U.S. economy, and especially in the case of the automobile industry. Auto companies usually lay off workers in the summer: The factories close while companies prepare the next year's models. So many factories were already closed earlier this year that the seasonal shutdowns haven't really happened this summer. Even though car companies laid people off in July, the government's seasonally adjusted numbers marked an increase in car manufacturing jobs.

Things get even more complicated when you include the Cash for Clunkers program, which started on July 24. The plan offers people up to $4,500 to trade in their gas guzzlers for more fuel efficient new car. Whether the program helps the environment is somewhat controversial, but there is no doubt that it has created a lot of unusual demand for new cars. As Ed Brayton notes for The Michigan Messenger, the government's plan to pump an additional $2 billion into the program has analysts predicting a big boost for manufacturers in July and August.

So we don't really know if the labor market actually improved last month, or if the report is just an exaggeration of statistical anomalies resulting from the recession itself, or even some of the government's recovery efforts. But as Steve Benen notes for The Washington Monthly, even if the numbers come with a healthy dose of uncertainty, it's still better to see them come in good than bad. "There hasn't been encouraging news on the job front in quite a while, and given the severity of the economic crisis, today's report offers at least some relief," Benen says. "The job numbers beat expectations, the overall unemployment rate declined, earnings went up, and the manufacturing sector improved."

But even if unemployment is finally slowing down, the housing market remains awful. Foreclosures are significantly outpacing the administration's efforts to help troubled borrowers. The Treasury Department released a report last week indicating that only about 9% of the borrowers eligible for relief under the government's anti-foreclosure plan have actually received any aid-and even here the numbers are juiced to make the program look better. The administration only includes borrowers who are already at least two months behind on their mortgage payments in the group of eligible borrowers, when in fact any borrower in danger of "imminent default" is supposed to be eligible. Much of the problem, as I argue in a piece for Salon, is that the plan relies on private-sector debt collectors to identify distressed homeowners and get them help, something these companies have never been very interested in doing. All in all, just 235,247 borrowers have received assistance under the Obama plan, while foreclosures increased to 1.5 million in the first six months of 2009, with 2.4 million expected for the entire year and 9 million by 2012.

Writing for Mother Jones, Andy Kroll emphasizes that a much better policy option is available than the current tack. Rather than ask the banking industry to voluntarily adopt the administration's plan without any consequences, we should put "homeowners' fate in the hands of a neutral arbiter, like a bankruptcy court judge . . . [It] would go a long way toward stemming the tide of foreclosures," Kroll writes.

Thanks to a bizarre legal loophole, mortgages cannot be modified in a bankruptcy proceeding if the owner actually lives in the house (investment properties, on the other hand, can be written off). In other words, if a predatory loan is driving you bankrupt, a judge can't do anything about it in bankruptcy court. Congress has tried to change this rule a few times over the past year, but the bank lobby has stymied those efforts. The most recent legislative push failed overcome a Senate filibuster in April, but the political momentum may be changing as foreclosures get increasingly out of hand.

As Mike Lillis notes for The Colorado Independent, Sen. Dick Durbin, D-Ill., plans to bring back the legislation if the banking industry doesn't get serious about helping borrowers fast. Many of the companies letting borrowers fall into foreclosure received billions of dollars in bailout money over the past year, and some even agreed to help borrowers as a condition for taxpayer support. But reform doesn't just depend on the banks. Peter Dreier argues in The Nation that citizens need to publicly protest for stronger economic reforms.

Foreclosures are terrible for the economy. They wreak havoc on families' lives, wipe out personal savings, lower the value of neighboring properties and put more homes on the market, further lowering home prices nationwide. If we cannot stop foreclosures, the economy cannot recover. If job losses are finally moderating, that's great news. But it would be much better to see job losses stabilize and see the banks we bailed out actually do something to avert foreclosures.

This post features links to the best independent, progressive reporting about the economy and is free to reprint. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

Weekly Audit: Radical Inequality Fueled the Wall Street Meltdown

by: The Media Consortium

Tue Jun 30, 2009 at 10:19

by Zach Carter, Media Consortium MediaWire Blogger    

Now that Treasury Secretary Timothy Geithner isn't going to impose pay restrictions on bailed out Wall Street executives, it's critical to remember that severe economic inequality was a major factor in the financial meltdown. Our tax code funnels money into the hands of our wealthiest citizens, which means that our financial system protects the interests of the affluent—not the the average citizen. The broad divergence between our core democratic values and the existing U.S. economic structure must become part of the public debate over financial reform.    

Weekly Audit: Reining in the Subprime Scoundrels

by: The Media Consortium

Tue Jun 16, 2009 at 10:07

by Zach Carter, TMC MediaWire Blogger

 President Barack Obama is scheduled to unveil his agenda for revamping financial regulation later this week. As the economy struggles though a recession created by the banking industry, it's crucial that Obama and his advisers craft a set of rules ensuring that the financial sector strengthens our economy instead of destroying it.  

Weekly Audit: Why the Current Stimulus Plan Isn't Enough

by: The Media Consortium

Tue Apr 07, 2009 at 09:31

by Zach Carter, TMC MediaWire Blogger  

The U.S. economy just keeps getting worse. Given the absolute pummeling the job market has taken over the past five months, we're going to need some much stronger medicine than policymakers are currently proposing. It's increasingly clear that President Obama's stimulus plan was devised for a far milder downturn, and this week we received further evidence of the recession's high human cost.  

Weekly Audit: How Predators are Profiting from the Economic Collapse

by: The Media Consortium

Tue Mar 10, 2009 at 10:09

by Zach Carter, Media Consortium MediaWire blogger  

While the economy sinks into the abyss, some of the financial industry's most egregious scam artists are already back on the prowl looking to take advantage of troubled borrowers.  

Why Foreclosure Victims Are More Important Than Ellen Tauscher's Greedy Egomania

by: ZP Heller

Wed Mar 04, 2009 at 18:30

If you want to see what I mean, read Dday's excellent post, "Ellen Tauscher's Insatiable Appetite for More Homeless People," which lambastes Rep. Tauscher, head of the New Democrat Coalition and former Wall Street investor, for delaying this much needed legislation and then bragging about it.  Then, read the hilarious message Tauscher's office sent to Chris Bowers, which took a defensive tone over the criticism Tauscher has received.  Tough shit Tauscher!  She's the one who put the interests of banks before her constituents.  Not to mention the fact that she has a former bank industry lobbyist working in her office, and is STILL working to restrict the power of bankruptcy judges.

Chances are Conyers' compromised legislation will pass the House tomorrow.  And while, as Chris noted, it was a good sign to see Senate staffers participating in yesterday's negotiations, odds are HR1106's counterpart in the Senate will still face a tough battle.  That's why it's key to keep Brave New Foundation's petition going that over 17,000 people have signed in the last four days!  We have to keep the pressure up on Congress and get these judicial modifications passed.