A month after announcing that she would not renew her quest for the 19th Ohio House District seat of now term-limited State Rep. Larry Flowers (R-Canal Winchester), grandmother and feisty long-time political activist Marian Harris is back on the campaign trail. "Circumstances have changed," she writes on her campaign web site, "More information is forthcoming."
Harris won 45.06% of the vote against Flowers last year in a district that leans strongly Republican (PVI R+11.5). The GOP candidate is County Coroner Dr. Bradley Lewis (R-Groveport).
From a new USA Today/Gallup poll:
Republicans look at the low approval numbers for Congress and figure that the Democratic Party is losing favor with the public rapidly. Actually, public approval has been steady since the spring:
Approval of the Republican Party is on a generally downward slide since shortly after 9/11:
Americans identify themselves mostly as independents (41%), but those who call themselves Democrats (34%) outnumber those who call themselves Republicans (25%). Among independents, the attitude toward the Democratic Party is positive (47% to 40%) and toward the Republican Party is negative (33% to 50%).
Gov. Ted Strickland (D) had signaled that he might veto the overhaul of state auditing procedures proposed by Auditor Mary Taylor (R) and passed by the GOP-led General Assembly, citing cost and usurpation of the Governor's authority. Strickland had proposed his own changes, but Taylor's plan creates an independent oversight committee and Strickland's plan did not.
Strickland has now signed Taylor's plan into law, and the key to him doing so was an adjustment to the role of the committee. As Columbus Dispatch reporter Mark Niquette puts it, the committee "now has the power merely to review and comment on audit plans rather than approve them." Having preserved his own authority to some extent, Strickland relinquished the veto pen, despite his continuing concern over the cost of the new panel.
This is another example of Strickland's pattern of getting bipartisan results through occasional compromise. Taylor's plan, like his own, is intended to tighten up the auditing process, hoping to avoid a repeat of the waste and fraud at the Bureau of Workers Compensation that occurred on the watch of two Republican administrations. It is a laudable goal. "This is one more example of a bipartisan effort resulting in something good for our state," he said. Precisely. A much better result than a veto and partisan confrontation, in this instance.
New reports on the crisis in the country to which we've given over $10 billion in aid since 9/11, most of it military, and much of that in untraceable cash payments:
Bhutto Rejects Caretaker Government - Released from house arrest in anticipation of the visit by U.S. envoy John Negroponte, former prime minister Benazir Bhutto promptly rejected the caretaker government that had been announced by Musharraf for the purpose of overseeing elections, and repeated her vow not to negotiate with Musharraf any more.
Some Opposition Party Workers Released, Some TV Outlets Back On the Air - Apparently playing for time, Musharraf has released some of the thousands of people who have been arrested and allowed some independent television stations to broadcast, although under strict new reporting regulations.
Opposition Leaders Negotiating Alliance - The leaders of the various opposition parties are forming an alliance to oppose Musharraf, and Bhutto has called for installation of a "government of national unity" in advance of the January elections.
Negroponte Spoke with Bhutto on Telephone - The Deputy Secretary of State called Bhutto, reportedly to "reiterate the importance of moderate forces working together" and "getting Pakistan back on the pathway to constitutional rule." He also wanted to hear from her on the political situation. He is expected to meet with Musharraf in person, a distinction no doubt freighted with diplomatic significance.
Insurgents Gain Territory Since Emergency Declared - In the last few days militants have captured more territory for their mini-state inside Pakistan’s borders, invading settled areas and chasing away frightened policemen, despite Gen. Pervez Musharraf's insistence that he imposed emergency rule in order to better fight against them.
Student Protests Against Handover of Imran Khan Continue - Thousands of Punjab University students protested again today over the actions of a few students affiliated with the religious party Jamaat-i-Islami in delivering moderate opposition leader Imran Khan over to the police. In this video clip, two law students say that they have resigned from that party's student organization over the incident, and assert that the cause of upholding the rule of law is non-political, i.e., all parties should support it:
(Translation is here.)
Musharraf Trying to Shut Down Geo TV - The independent Pakistani TV outlet Geo TV has been operating out of Dubai, although its programs have been blocked within Pakistan. Now, a blogger reports, Musharraf's government is using its influence with an unspecified foreign government to get Geo TV shut down altogether.
ABA Sponsored Rally, Web Site - The American Bar Association sponsored a rally of solidarity with the Pakistani judiciary and lawyers in Washington on Wednesday, with an estimated 600 to 700 lawyers marching past the Supreme Court building. The ABA has also set up an online media kit to focus attention on the issue, with audio and video. There is also an online petition you can sign.
No big surprise here [pdf]:
* 20% say the Ohio economy is excellent or good, 46% say fair, 33% poor.
* 58% think economic conditions in Ohio will get worse, 21% think they will get better, 18% think they will stay the same.
* The cost of health care is rated a "very big problem" by 72%, gasoline prices by 61%, jobs leaving Ohio by 61%, home heating and energy prices by 46%.
Polls show that Ohio voters trust Democrats over Republicans on handling health care and the economy. If Democratic candidates offer sound policies and a clear message on these concerns, the voters will respond.
ADDENDUM: Marc Kovac reports on the excellent Capital Blog about the Ohio Department of Jobs and Family Services unemployment report this morning, indicating that the state rate remained unchanged from last month at 5.9%, up from 5.5% one year ago. Ohio's rate is more than a point worse than the national rate of 4.7%, also unchanged from one month ago. Not getting worse, but not getting better, and we still have fewer jobs than when the last recession ended in November 2001.
In votes that occurred within the last hour, the U.S. Senate failed to pass the $50 billion war funding bill with a phased withdrawal plan that the House passed yesterday 53-45 (seven votes short of the required 60), but also failed to pass a GOP-sponsored provision to approve the $50 billion with no strings attached by the opposite margin, 45-53. The matter is deadlocked, with Democratic leadership pledging that there will be no more "blank check" war funding and the Bush administration claiming that the Pentagon is unable to shift funds from other accounts to continue to pay for battlefield operations. Expect major recrimininations and posturing on this. Hopefully the Democrats will display more backbone this time. Omitting telecom immunity from the revised FISA/warrantless wiretapping bill is a good sign.
Lots of interesting news stories on the foreclosure crisis:
Federal Courts in Cleveland Toss Foreclosure Cases - Bill Callahan is all over this story, although you can also read about it in the New York Times, at Bill Sloat's The Daily Bellwether, and in some Ohio newspapers. Refusing to go along with the usual routine processing of foreclosure cases, two federal judges are dismissing cases that don't attach documentation to the complaint to show the chain of ownership of the loan from issuer to ultimate holder. These rulings may be overturned on appeal, or the defects may be cured by the plaintiffs so the cases can be refiled, but it acts as a mini-moratorium for some homeowners who might be able to negotiate a workout or otherwise save their home in the meantime. It is also wonderfully ironic, since lenders started filing foreclosures in federal court (taking advantage of "diversity of citizenship," meaning that the plaintiffs are all out-of-state) in order to avoid the backlog and long delays in foreclosures in state court.
U.S. House Passes Mortgage Reform and Anti-Predatory Lending Act - A measure sponsored by Rep. Barney Frank (D-MA) and Rep. Spencer Bachus (R-AL) passed by a veto-proof bipartisan vote of of 291-127. Rep. Betty Sutton (D-Copley) issued a press release late yesterday calling attention to a provision she introduced which requires loan creditors or servicers to provide a separate notice to borrowers six months before their adjustable rates reset. Callahan is not impressed with the bill, which requires licensing of mortgage brokers and set new standards for mortgage origination, because it does "little to help — and may actually obstruct — real community efforts to keep our neighbors in their homes, stop the death cycle of 'flip-foreclose-flip.' and rebuild our damaged neighborhoods."
GM in Trouble Due To Mortgage-Related GMAC Losses - This is how it spreads to other sectors of the economy. General Motors may be unable pursue its bid to buy Chrysler because of huge losses at General Motors Acceptance Corp. due to subprime mortgage losses at a GMAC subsidiary. Meanwhile, GMAC and Cerberus (which acquired a 51% stake in GMAC from GM) may walk away from the troubled subidiary, Residential Capital LLC, which hasn't been able to meet financial requirements under its loan agreements, probably forcing the subsidiary into bankruptcy. Called "ResCap," the subsidiary is the biggest privately held U.S. mortgage lender. And so it goes.
Merrill Didn't Write Off Enough? - Merrill posted enormous losses in the third quarter, ostensibly writing off all of its exposure due to subprime mortgage-tainted assets. But did it? Blogger Kevin Drum highlights a story by CNBC, indicating that Merrill changed its mind about who to hire to replace the CEO forced out on account of the losses, because the first-choice candidate "said he would take the job but only if Merrill did a full accounting of its subprime exposure." Could it be that the $8.9 billion write-off didn't get to the bottom of the problem? That would be very bad, especially since other financial institutions didn't write off their problem assets as aggressively as Merrill.
Home Ownership Rate Dropping - It is down to 2003 levels, which was before many of the worst lending abuses occurred.
UPDATE: Over-sized Bank Profits Were a Clue - Floyd Norris has an intriguing column in the business section of today's New York Times, saying "we should have known something was strange" because banks were doing better than they should have been doing. Inexplicably large bank profits were "signs that banks were either lying about their results or were taking large risks that were not fully disclosed." Among the undisclosed risks were poorly understood "liquidity puts," which required the banks to buy back collateralized mortgage obligations if they became unmarketable.
Some Investors Leaving Stock Market? - "Treasuries rose to the highest level since 2005 as concern over subprime mortgage losses led investors to sell stocks and seek the safety of short-term government debt." I've been wondering when we might start to see some evidence of this. I personally know two expert legal scholars on predatory lending and one of them has taken her own money out of the stock market, the other has not. Yet.
Joshua Boak of the Toledo Blade has a good write-up today on a campaign appearance by Robin Weirauch (D-Napoleon) at the closed TRW plant in Fremont, calling for renegotiation of trade agreements to protect domestic jobs:
Mrs. Weirauch said agreements meant to increase foreign trade by limiting tariffs and other traditional barriers actually launched a "race to the bottom," in which American companies shipped their work forces to countries with low wages.
"They've all been cookie-cutter agreements," said Mrs. Weirauch ..., "They shouldn't be creating a climate where it does more harm than good for American workers." ...
Mrs. Weirauch said that if elected she would seek tax incentives for manufacturers whose products carry a "Made in the USA" label, explaining that current trade policies promote stagnant wages and unemployment.
State Rep. Bob Latta (R-Bowling Green) is quoted as responding that trade deals help domestic manufacturers gain greater access to global markets, resulting in job growth at home.
On the evening of the special primary, Weirauch talked about how the focus of her campaign would be blue collar concerns like jobs and the economy. She said these are issues that people "really care about," that they "wake up in the morning thinking about." Although she didn't say it, her strategy is plainly modeled on the success of the 2006 campaign of Sen. Sherrod Brown (D-Avon), whose economic populist message helped him carry the 5th Congressional District as well as many other rural and semi-rural areas despite being an attacked as too liberal.
Polls show that most people feel that the economy is not doing well and the country is on the wrong track. There is proven potential for Weirauch's message to resonate with the voters, especially moderates and independents, if only she can deliver it effectively and get enough earned media coverage and advertising of her own to get it out there.
What's doing in the state whose coldest recorded temperature was -39° F at Milligan on February 10, 1899:
Economic Pinch Takes Toll on Tollway - "The sluggish economy and rising gasoline prices are thinning out traffic on the Ohio Turnpike, reducing expected revenues and delaying construction projects."
Akron Food Banks Also Struggling - As reported yesterday with respect to Cincinnati, donations are dropping and the need is still great at Akron-area food banks.
No Mortgage-Tainted Holdings Among Ohio Investments - Treasurer Rich Cordray (D-Grove City) has sent out a letter assuring local governments that there are no troublesome mortgage-backed securities among the holdings of the $6.1 billion STAR Ohio fund where many of them park their money. He acted in response to a Bloomberg report that “state-run pools have parked taxpayers' money in some of the most confusing, opaque and illiquid debt investments ever devised.” Cordray has been in the forefront on responding to the mortgage crisis -- Ohio is fortunate to have him.
Video Games Distributor Hid Income - As Columbus-based Ohio Skill Games distributed thousands of now-illegal gambling devices across Ohio, it attempted to hide as much as $1.2 million a month in profits through transactions with Chinese and Canadian businesses. Why is this not surprising.
Ohio Gas Prices Up - Average prices in the Youngstown area were $3.10 yesterday, even higher elsewhere - the Cleveland area was at $3.14.
Ohioans Like Smoking Ban - A poll sponsored by the American Cancer Society finds that 79% approve of the new prohibition against smoking in bars, restaurants, and other public places. Lots of people say they are going out more because it is less smelly and easier to breathe.
Brown Wants Ban on Selling Cell Phone Numbers - Sen. Sherrod Brown (D-Avon) has introduced a bill that would prohibit selling or publishing cell phone numbers without permission. Among other reasons for the law, he cites safety concerns for children and domestic violence victims - kids could receive unsolicited calls from strangers while away from home, and abuse victims rely on their cell phone numbers remaining anonymous. An excellent proposal.
Space to the Border - Rep. Zack Space (D-Dover) is ridin' out to the Mexican border with pardners from Congress to see how come all those illegal immigrants are crossing over.
The House vote to override Bush's veto of the Labor-HHS-Education funding bill failed by two votes. 277 to 141. Two stinkin' votes.
The whole battle is over $10 billion in a bill that involves $606 billion. Bush signed similar increases in domestic spending bills passed by the GOP-led Congress in conflict with his proposed budget in previous years, but not now. And yet the GOP will rail against the Democratic leadership as getting nothing done. Who are the real obstructionists?
A couple of quick thoughts:
* The Republican leadership was better at winning tight floor votes. They used threats, inducements, intimidation, payback, bending procedural rules, whatever -- but they got it done.
* Quite a few Republicans backed this bill (54). They were lured by changes like funding abstinence-only sex education. In the debate GOP members' criticism of the substance of the bill was muted. Are they frustrated this morning, or are they cheering their party over its "victory"? I have to think that there is some unhappiness in the GOP ranks.
* Because the vote was so close, one would think it would be fairly easy to make minor modifications and get a veto-proof vote on a revised bill. One would think. It has not happened on the SCHIP bill, despite intense negotations. What is up with that?
Holiday Party at the America Votes office, 399 E. Main Street #220, Columbus. Free parking on the street. All volunteers, partners, friends, and activists welcome.
They are also hosting a food drive and are asking everyone to bring at least 2 cans of food, a new toy, or a $2 or more contribution to go toward the United Laborers One New Toy Program which serves union families and the community in Central Ohio.
Navy veteran Ray Pryor (D-Chillicothe) has announced that he will run again for the 85th Ohio House District seat held by Rep. John Schlichter (R-Washington Court House).
Pryor has worked for the Ohio Bureau of Employment Services for 25 years as a veterans representative and licensing coordinator. He recently testified at a hearing on regional discrepancy in veterans disability compensation held by Rep. Zack Space (D-Dover), and was given an award
last Tuesday in 2002 [oops, wrong year!] in Washington D.C. by Secretary of Labor Elaine Chao for his outstanding efforts in providing employment and training services to veterans.
The 85th District includes Fayette, Pickaway and Ross Counties. Although it leans Republican (PVI R+5.3), Pryor came very close to winning in 2006. Schlichter got 51.41% of the vote and Pryor got 48.59%. Pryor carried his home county (Ross) but Schlichter carried the other two.
Here is the audio of a robocall sponsored by the Ohio Republican Party in which Karen Gillmor (R-Dublin), widow of the congressman, invokes the memory of her late husband and his conservative principles and expresses her support for State Rep. Bob Latta (R-Bowling Green):
During the call Gillmor comments that the Christmas holidays are a bad time for an election and urges the listener to fill out and return an absentee ballot application that has already been mailed.
It's not a particularly exciting message, but what's interesting to me is that it was made at all. There hasn't been a lot of warmth and goodwill between the Gillmor and Latta camps since Bob Latta lost the primary for his father's seat to Paul Gillmor by just 57 votes back in 1988. However, the widow Gillmor intends to run for the Ohio Senate, so cooperating with the state GOP is definitely something she wants to do. This is a big favor she has granted.
Inflation Was Tame In October
... Consumer prices grew 0.3 percent last month, holding steady from September, the Labor Department said today. The closely watched core index, which excludes the prices of volatile food and energy products, rose 0.2 percent for the fifth consecutive month. ...
As noted by the economist blogger Bonddad here, the media tends to focus on the so-called core inflation index, which excludes food and energy. It makes inflation sound tame, even though food and energy prices have spiked. Petroleum-based energy prices jumped up 1.5% in October, five times the "core" increase. Both energy and food are up sharply for the first ten months of 2007, at an annualized rate of 12.3% for energy and 5.5% for food. So if you are feeling the pinch despite the cheery headlines about prices, that is why.
By the way, the overall inflation rate includes declining home prices, a trend that doesn't provide consumers any relief on day-to-day expenses (although it reduces their credit). The housing slump thus tends to mask the true extent of price increases in ordinary consumer goods.
The U.S. House of Representatives will vote today on overriding the president's veto of the Labor-Health-Education funding bill. Bush's veto threatens:
* $300 million from the Head Start program, affecting over 30,000 preschool children;
* $800 million from special education programs for children with disabilities;
* Half of the funding for career and technical education programs: and,
* $100 million from Teacher Quality grants.
These are the Ohio members of the House who voted against the bill before Bush vetoed it, all Republicans:
Steve Chabot - 202-225-2216
Jean Schmidt - 202-225-3164
Jim Jordan - 202-225-2676
John Boehner - 202-225-6205
Pat Tiberi - 202-225-5355
Latest reports on the crisis in the only country in world created specifically to be a homeland for Muslims:
Caretaker Government to be Announced - Gen. Pervez Musharraf, his official term as president ending today, is expected to announce a caretaker government to oversee parliamentary elections he has scheduled for January 9th. However, he does not plan to lift his emergency crackdown on the media or opposition parties, or to restore deposed judges or free jailed activists. Opposition parties plan to boycott the elections.
Imran Khan Moved to Prison - Popular opposition leader Imran Khan was moved to Lahore's Kot Lakhpat prison after being arrested yesterday and charged under anti-terrorism laws. Some other prominent opposition figures are under house arrest rather than in prison.
Two Boys Killed In Police-Protestor Clash - Shots from an unidentified source killed two teenagers at pro-Bhutto rally in a poor Karachi neighborhood.
NY Times Reports Bush Faith in Musharraf Faltering - A front page story in the New York Times suggests that the Bush administation is beginning to prepare for the possiblity that Musharraf won't survive this crisis. “They don’t want to encourage another military coup, but they are also beginning to understand that Musharraf has become part of the problem,” said one former official with knowledge of the debates inside the Bush administration. A U.S. consul in Lahore visited with Benazir Bhutto, who is still under house arrest.
Bhutto Bashed by Niece - Former prime minister Benazir Bhutto was excoriated by niece Fatima Bhutto in a guest op-ed published in the Los Angeles Times, deriding her "hijacking" of the democracy movement and hinting of her involvement in the unsolved police shooting of her father, Bhutto's younger brother. This might be an appropriate place to mention that Bhutto's base of support is definitely not the educated classes in Pakistan, many of whom regard her with suspicion and hostility. The Harvard-educated Bhutto is the darling of American media and the Bush administration, but in Pakistan her political support comes primarily from the poor and illiterate classes and she has substantial competition for the role of principal opposition leader.
Letter from Jailed Lawyer - The blog Pakistan Politics reprints a very moving letter from a lawyer who was tossed into a Karachi jail for reporting to the Sindh High Court on the day the courts were disbanded:
As I write this article, I am sure that I too will be charged for treason. I do not care. I’d rather be tortured to death by Musharaff and his men than bow down before him. This is a sentiment that is shared by the entire legal community barring few spineless men.
What further disappoints us is the role played by the main stream political parties and countries like the United States who are always harping about democracy. Sitting on the fence waiting to see which way the movement initiated by the lawyers goes. ... I was stunned that Bush is only “mildly disappointed” by Musharaff’s emergency rule. Mr. Bush, you were one of the most hated characters in Pakistan – the people now despise you.
Video of Student Protest in Islamabad - The gathering was reportedly broken up by the police right afterward:
Rep. Dennis Kucinich (D-Cleveland) was the only Ohio Democrat to vote "no" on yesterday's $50 billion war funding bill that called for a phased withdrawal of U.S. troops from Iraq. He is also heading out to Las Vegas for tonight's Democratic presidential debate tonight, opening the door for another hilarious satirical video from the campaign of challenger Rosemary Palmer (D-Cleveland):
UPDATE: Bill Callahan helpfully links to Kucinich's explanation for voting against the bill:
“For the past 11 months, all the House Leadership has done is play into President Bush’s hand. They have approved every war funding bill the President has asked for.
“Leadership could have told President Bush they will not continue to fund the war. They could have said: Use the money you already have to bring the troops home. That is what the American people want.
“They did not have to bring a bill to the floor. They could have forced the President to bring the troops home by refusing to provide any money for the war. Enough money exists to bring the troops home -- without further appropriations.
“But by offering the emergency supplemental appropriations bill today, the House Leadership is taking this Congress and this country down the same path: a path of destruction, chaos and death.
Ohio Poll results released today [pdf] show that attitudes among partisan voters toward the war in Iraq are almost mirror opposites to each other.
Republicans say that the war effort is going well (68%), the U.S. made the rights decision to start the war (77%), and U.S. troops should keep the troops there until the situation is stablized. Democrats say the war efforts is not going well (75%), the war was a mistake (76%), and the troops should come home as soon as possible (76%).
Independents are inclined somewhat more to agree with Democrats on these questions, but the poll sample of independents was so small (only 75) that the pollster cautions against relying on it.
The poll also shows that 54% of all voters expect bad consequences (civil war, terrorist bases, and Iranian incursion) if the U.S. pulls out. Men in general are more likely to say that the war was a good decision and the troops should stay, while women in general tend to say the opposite.
What's going on in the state whose worst weather disaster was the Great Dayton Flood in 1913, leading to the creation of the first major flood plain engineering project in the nation (the Miami Conservancy District):
Space Switching Accommodations for Four-Day Trip to Greece - The Dispatch queried the freshman legislator Zack Space (D-Dover) about luxury hotel reservations in Athens for a planned Congressional trip to Greece that ORP Chair Bob Bennet calls a junket. Space announced he will find cheaper quarters. Space's aide calls the trip government business and Greece a strategic ally on the war in terror, but Bennett questions how the trip will benefit residents of the 18th District. Space's grandfather emigrated from Greece.
Hard Times at Cincinnati Food Pantries - The Enquirer reports that relief agencies are cutting back. Requests for help at an area food bank are up 18% since last year but donations are down 30%.
UAW Approves Ford Contract - Union says 79% of workers voted "yes" on four-year pact. Ford promised future products to six U.S. assembly plants and will keep open facilities including one in Avon Lake, but will proceed with previously announced closings in Batavia, Maumee, and Brook Park. An engine facility in Cleveland will be idle for a year.
Ohio Fifth Worst State in Carbon Dioxide Emissions - According to a report by the policy group Carbon Monitoring for Action, Ohio also emits more than Mexico, Iran, or France. Meanwhile, Ohio Citizen Action is enlisting doctors and nurses to help establish the negative impact on health of nearby Cleveland residents of noxious emissions from Mittal Steel.
Ohio Senate Passes Crime Bills - Bills would stiffen penalties for callers making bomb threats to schools and sexual predators who use the Internet to lure children would face tougher penalties. It certainly is easy to pass laws making prison sentences longer. Too bad the prisons are already over capacity and no new ones are being built.
Lancaster Attorney Establishes Foundation to Pay for School Activities - Public schools are too strapped for cash to pay for extracurricular activities that used to be provided free of charge. Attorney Craig Vandervoort started the Lancaster Public Education Foundation to raise money for things like sports, field trips, and classroom projects that parents can't afford, with $40,000 raised since this summer. Is this what it's coming down to, private charities supporting student activities for public school students?
Frances Strickland on Hillary Clinton - Cindy highlights a Dayton Daily News story on Strickland's remarks to a women's group about the Democratic front-runner and women in high-ranking government jobs generally. She tells Bill Clinton to "stay off the offensive. She can handle this."
He has built up a national lead in the race for the GOP presidential nomination without running any TV ads at all, so people have been wondering what they would look like. Here is the very first TV ad for Rudy Giuliani (R-NY), slated to run in New Hampshire:
It's a strong ad, good message and good visuals. The central claim, however, is suspect. Giuliani's claimed success in governing New York City is debatable (and he did nothing to help struggling public schools), and the notion that running a city is like running a country is not particularly convincing. Nevertheless, a formidable foe if he pulls off the nomination.
Today the Plain Dealer reprinted this important op-ed by Robert Kuttner in the Los Angeles Times, arguing that the "deepening calamity" of the sub-prime mortgage crisis "results from the failed fantasy that markets can regulate themselves." Kuttner connects mortgage lending abuses in the 1990s to the deregulation of financial markets sought by free-market economists since the 1970s. That deregulation scaled back the "dynamic system of managed capitalism" that had been created in response to the stock market crash of 1929, a product in turn of the laissez-faire 1920s:
In the sub-prime [mortgage boom], unregulated mortgage lenders threw away underwriting rules and made teaser loans to people with sketchy credit histories. ...
But in the Alice-in-Wonderland world of financial deregulation, a Wall Street bank could turn the loan into a bond; a credit rating agency using obscure alchemy could bless the bond with a triple-A rating, and some consenting adult could be found to buy it. ...
The whole daisy chain was unregulated and opaque -- to investors, to regulators, even to the investment bankers who orchestrated it. Nobody really knew what these bonds were worth if they ever had to be sold. Now we are finding out.
Had regulators simply required all mortgage lenders to use prudent underwriting standards, the sub-prime crisis never would have happened. ... Congress, in a rare bout of pro-consumer regulation, passed a law in 1994 requiring exactly that. But the Federal Reserve, a devout believer in the magic of markets, refused to issue regulations.
This is an important point and deserves more attention. The lending industry and to some extent the federal regulators are largely treating the crisis like it is just some bad thing that happened, like the wind and the rain, with nobody really to blame. But there are people to blame. Unregulated lenders fudged the rules to generate a wave of unsustainable loans, and Wall Street entities hid behind the complexity of newly created complex investment vehicles to get away with massive conflict of interest and deception. Rating agencies were paid by the very investment banks who sold ostensibly safe but highly risky investments based on the rating agencies' approval. (42% of Moodys' income from 2002 to 2005 was from rating residential mortgage backed securities and similar exotic instruments.) Everybody made money on each step of the transactions until the bubble burst. It was a bonanza built on lack of oversight and lack of transparency.
Last Thursday Cuyahoga County Treasurer Jim Rokakis gave a presentation to the Cleveland Heights Democrats that tied the mortgage crisis in Ohio specifically to opposition by Republican-led state government to regulating the lending industry. When the state wouldn't step in to crack down on abusive lending practices, he said, the City of Cleveland passed its own predatory lending ordinance in 2001. Within two weeks the General Assembly, after having ignored the subject for years, passed a law that forbid Ohio cities from regulating lenders. (House Speaker Chuck Blasdel (R-East Liverpool) was awash with campaign contributions from the financial industry. Read all about it in this Free Times article by Charu Gupta.) The legislature took no action against abusive lending until 2006, when it finally passed a predatory lending law. During the intervening time, Rokakis reported, foreclosures in Cuyahoga County mounted from about 3,500 in 1995 to over 7,000 in 2000 to over 13,500 in 2006. This year the county is on a pace to exceed 17,000.
Here is the full 20-minute version of the "turning point" speech by Sen. Barack Obama (D-IL) at the Jefferson Jackson Dinner in Iowa on November 10th:
This really is an excellent speech. Vintage Obama. Well worth watching the whole thing.
Did you know MC Hammer got the name "Hammer" from Reggie Jackson when Hammer was a 13-year-old batboy for the Charlie Finley-owned Oakland A's? He was also called "Pipeline," since Finley used him as an informant on clubhouse activities. "MC Pipeline" doesn't have the same ring to it.
The candles spell out "Free Our Judiciary and Media."
Providing more support for the electability arguments against Sen. Hillary Clinton (D-NY), a new RT Strategies/Cook Political Report poll (cross-tabs in pdf format here) shows independent voters favoring former mayor Rudy Giuliani (R-NY) over Clinton by a 48% to 36% margin. Although Clinton wins the overall head-to-head match-up by 46% to 43%, that gap among independents is extremely troubling.
Kerry lost to Bush in 2004 while winning independents by one point, and when the Democrats did very well last fall they won independents by 18 points (57% to 39%). If Giuliani wins the battle for the middle, Clinton is unlikely to prevail.
A friend emailed this morning to remind me of the results of the recent Mason-Dixon/Plain Dealer poll on whom Ohio voters would not consider supporting under any circumstances:
43% Giuliani (R)
44% Obama (D)
44% McCain (R)
46% Thompson (R)
48% Edwards (D)
49% Romney (R)
55% Clinton (D)
68% Kucinich (D)
Obama is the best Democrat on this list, Clinton is far back and nearly the worst.
The numbers for Clinton in today's Quinnipiac poll are considerably less dire, but my friend has an excellent point. Resistance to voting for Clinton is very real and very widespread. Democratic voters considering whom to support need to confront this reality in making up their minds.