Month: October 2010

Howdy folks.  Zandar again.  You know that whole foreclosure crisis we’ve been going through over the last two years or so?

Well, now we’ve got a problem.

In the last week multiple news stories have dropped involving what amounts to massive institutionalized mortgage fraud on the part of the big banks running the foreclosure mills in states like Florida, Michigan, and California.

The question at stake is simple:  Who really owns the mortgage that these banks are trying to foreclose upon?  In the age of securitized mortgage products, when bundles of mortgages were stacked up and chopped into financial cole slaw, the answer is nobody knows.  Many of the middlemen and intermediates vanished in the financial meltdown of 2008.  The rest were bought up by the megabanks:  GMAC Mortgage (now Ally Bank), JPMorgan Chase, Bank of America, and Wells Fargo.

The bottom line is that these megabanks have been acting like they own the title to houses and have been foreclosing on them at record speed.  The reality is in many cases, possibly hundreds of thousands of them if not millions, that simply isn’t true.

One Circuit Judge in Florida decided to ask about this in early September and discovered a clear case where JPMorgan Chase was servicing the loan, but Fannie Mae owned the mortgage.  JPMorgan Chase foreclosed on the home anyway, and the judge nailed them to the wall on it.

The problem is that ruling in Florida has thrown a harsh spotlight on the entire foreclosure industry in the last two years.
And here’s where things get interesting.  GMAC/Ally Bank last week, as a direct result of this hearing, halted home evictions in 23 states as well as sales of foreclosed properties while the company suddenly had a real (and not to mention massively fraudulent) need to double and triple check all the foreclosures it had been dealing with.

Then, on Wednesday, JPMorgan Chase announced it was doing the same thing.

“It has come to our attention that in some cases employees in our mortgage foreclosure operations may have signed affidavits about loan documents on the basis of file reviews done by other personnel–without the signer personally having reviewed those loan files,” says JPMorgan spokesman Tom Kelly.

In the meantime, the company has requested that the courts not enter judgments in pending matters until the review is complete, a process they say should take a couple weeks.

“We believe the accuracy of the factual loan information contained in the affidavits was not affected by whether or not the signer had personal knowledge of the precise details,” Kelly adds.

Then today, Bank of America announced that they too would be looking over their foreclosures.

Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday.

The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

That last sentence there should scare the ever loving shit out of you, because that means that in 23 states, the last two years of home foreclosure sales may be completely fraudulent.  Hundreds of thousands of sales, if not millions.

Millions of people foreclosed on, evicted, and their homes sold to new people.

People evicted when they had no legal right to be by a bank that didn’t legally have the right to evict them.  Millions possibly thrown out of their homes without legal reason to have been.

And ad bad as that is, how about the entire foreclosure industry locking up like an engine with no oil and taking housing prices with it?

So, guess what happens to the assets of the banks if they don’t own the mortgages they say they do, and there’s no real way to prove that they do own the mortgages even if they do because of two years of fudging the paperwork and carrying on anyway?

Why, those assets would be worth…zero.  And what about the fourth megabank in this scenario?  That would be Wells Fargo, and they are doing everything they can to sweep the mess under the rug.  In fact, they are now speeding up foreclosure and short sale procedures instead of halting them.

In a memo e-mailed to short sale vendors last month and obtained by American Banker, Wells said it will no longer postpone foreclosure sales for those who do not close short sales by the date in their approval letter from the company. Only extension letters dated Sept. 14 or earlier would be honored, Wells said.

Hmm.  Three banks when caught are halting foreclosures.  One bank is making a mad dash to clear their decks instead.  You don’t think that’s where most of the mortgage fraud is, right?

Things are getting scary to the point that insurers will no longer underwrite foreclosure sales because of the liability of these massive numbers of possible fraud cases.

As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.

Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy.

And if the insurance underwriters aren’t going to play ball anymore, the game is truly over.

In the span of roughly two weeks, the entire foreclosure machine has ground to a near halt, and there are potentially hundreds of billions if not trillions of dollars worth of mortgage fraud cases here, folks.

Talk about your October surprise.

Turn on the lights, and watch the roaches scatter…only that these roaches are so big, that they may very well trigger another financial crisis in the very near future.

We’re about to field test those Wall Street “too big to fail” regs, people.  And I don’t think anyone’s going to like the results.  

Buckle up.  Pay attention.  This one’s going to be HUGE.

I’m kind of enjoying the Meg Whitman meltdown. How much of her money has she spent trying to become governor of California? I think the highlight so far has to be this press release by the rabid anti-Latino group, Americans for Legal Immigration.

ALIPAC is asking Immigration and Customs Enforcement to arrest and charge both Whitman and Diaz for numerous immigration and employment law violations. […]

Americans curious about Meg Whitman’s support for Comprehensive Immigration Reform Amnesty (CIRA) that would lift current laws and penalties for both illegal aliens and their employers now know why. If CIRA were to pass, exploitative employers like Whitman would escape the existing penalties under US law which have a nine year statute of limitations.

The American public has indicated in numerous scientific polls that well over 80% of Americans want employers like Meg Whitman heavily fined. Over 50% want the employers of illegals, like Whitman, jailed.

That’s not exactly consolidating your base.

You know, if Michele Bachmann accused Obama of wanting to do this, I’d think she was nuts. But, it turns out, it was done under Harry Truman, so who knows? This is a part of history we just ignore. It doesn’t fit with our self-image. We’re about freedom and apple pie, not giving foreigners the clap.

Rahm is now officially gone. In his place, is Pete Rouse.

Intensely private, Mr. Rouse is unmarried and lives alone in northwest Washington with his two cats. (He is a big cat person, friends say.) He is not given to socializing; when Mr. Daschle hosted a huge staff reunion just before he left the Senate, Mr. Rouse did not show. He is also a huge music buff; in 2008, he persuaded the surviving members of the Grateful Dead to reunite and campaign for Mr. Obama.

I saw the Dead play at Penn State that year. I didn’t know I had Mr. Rouse to thank for that. Sounds like he won’t be nearly as enthusiastic as Rahm was in the “punching hippies” department. Apparently, he is a hippie himself.

Also, too:

When Republicans rose up against the appointment of Elizabeth Warren, a Harvard professor, to oversee a new consumer protection agency, Mr. Rouse helped devise a strategy that ended with the president appointing Ms. Warren as a top-level adviser — a position that needed no Senate confirmation.

Not that the guy isn’t an insider. When he worked for Majority Leader Tom Daschle, he was known as the 101st Senator. I doubt Rand Paul, Sharron Angle, Ken Buck, Joe Miller, or Marco Rubio will give much of a shit about that, however. Nor will Jim DeMint or Tom Coburn. I don’t care who you appoint as chief of staff, the Senate Republicans aren’t going to cooperate with this administration. They used to work with Obama. Now they stand silent while their base questions his religion and citizenship.

Personally, I never liked Rahm Emanuel. I thought he did an excellent job as head of the DCCC in winning back Congress. But many of the details infuriated me. He took a lot of the credit that should have been shared with Howard Dean, and he never respected Dean’s contribution to the party’s resurgence. I didn’t support Dean in the 2004 primaries, but I admired his work and the organization he put together, and I credit him with putting life back in a party that was totally on its back.

Emanuel’s record as chief of staff still needs time to properly evaluate. He was a strong advocate for getting out of Afghanistan, for example, which is something no one but Bob Woodward seems to want to give him credit for. On the other hand, he seemed too willing to go for the lowest common denominator, which Pete Rouse does not seem inclined to do. At least, not if this July 11, 2008 interview with Frontline can be believed:

FRONTLINE: The Harvard [Law Review] experience: … We’ve talked to [members of the conservative Federalist Society] that were there at the same time and were very supportive of him because he had this bipartisan attitude about how to get things done. Can you see that in the way he operates?

ROUSE: Yes, definitely. … I believe that his rhetoric or his pitch about working together to solve big problems and building consensus, that’s how he thinks; that’s what he’s always done. It goes back to his days as a community organizer. That’s what he brought to the Senate; that’s what he brings to the White House.

But that doesn’t mean — and I don’t want to be disparaging here, but criticism of the DLC [the centrist Democratic Leadership Council] is find the lowest common denominator and pass it. That’s not what he’s talking about here. I think he’s talking about moving forward with a progressive agenda. Clearly it’s not going to be 100 percent of what you want, but we can do better. And we can get 65 to 70 percent, 75 percent, whatever it is, if we work together and are honest about it and, obviously, build popular support for it.

And maybe this is part of going back to the previous comment about the traditional black leadership. It’s a different approach to trying to make progress and move forward. It’s not necessarily better, not necessarily worse, but it’s different. And when something’s different, not what people expect, sometimes you get skepticism or resistance. …

FRONTLINE: Bottom line is it’s putting the ball forward. It’s moving ahead.

ROUSE: Moving forward. And the question is, where? Because I think you have to have a bottom line. And if you say health [care] reform or education reform or FISA [Foreign Intelligence Surveillance Act], whatever the case may be, I think going in you have to know what your bottom line is, and you’re not going below your bottom line. …

FRONTLINE:… One of the big issues that [Sen.] Lindsey Graham [R-S.C.] brought up … about Obama as senator is that he had a problem, as you know, with the immigration bill. … What happened from the point of view of Obama there, and your reaction to Lindsey Graham’s problems with the way Obama reacted?

ROUSE: Ironically, Lindsey Graham was one of the people that he worked pretty well with the first two years, and that changed afterward. So I think some of this has to be on Lindsey Graham for his supporting McCain and his politics on this.

I don’t remember all the details about this, but I think this is exactly what we’re talking about. Immigration reform is a tough issue. You have to have a bottom line for what you can accept and what you can’t accept. You’ve got to look down the road and see where this is headed.

We don’t think what we were asking for was unreasonable. We were still in line with Sen. [Ted] Kennedy [D-Mass.]; he was, after all, the principal sponsor with this. We were talking to him all the time. And I hardly think that it’s fair to lay the collapse of immigration reform on Barack Obama, freshman senator, playing politics on it. I think this is just generally politics. …

FRONTLINE: So the direction that Obama wanted it to go, the reasons that he made the decisions he made on immigration are what?

ROUSE: I think, again, the decisions he made were based on his views of what is acceptable immigration reform and what’s doable. And again, I would go back to the comment I made about the DLC, just using them as an example. We’re not looking for the lowest common denominator just to pass something. We’re looking to pass something that may not be the bill we would write if we were sitting alone in the Harvard library writing it, but it’s one that we think significantly moves the ball forward. It’s not just passing it to pass it. You’re passing it because it’s making things better.

For my money, the president would have been better served by having Rouse as his chief of staff from the get-go. But, we’ll see if there is any discernible difference in the administration’s performance now that Rahm has gone off to Chicago. On the big issues, it is still Senate arithmetic that drives the decision making, and the rest is just fiddling at the margins. I hope, however, that things will improve with a man like Rouse in there. Maybe the Grateful Dead agree with me.

Want to know who comprises “The Majority” as it is presently forming here today?

Not a numerical majority but most likely an electoral one this time around?

Look no further.

Being Glenn Beck

Read this article.

I was spellbound. And scared to death. I have not looked hard at Beck…too ugly and (I thought), too weak. I was wrong. His strength lies in his weakness. In his resemblance to his followers.

Here they come.

The Know-Nothings.

The original Know-Nothings were a pre-Civil War American political party that was so paranoid about its place in the society that it instructed its members to answer “I know nothing” when questioned about it.

Deep.

Deeper?

Read on.

This regressive movement that is afoot in US politics actually not only “knows nothing”, it revels in that fact and actually idolizes a man who daily makes a point of confessing that he doesn’t have a clue, even about himself.

From the aforementioned article:

[Beck] is fragile, on the edge. There is no template for him or for where he is headed. “I have not prepared my whole life to be here,” Beck told me from his plush couch, his face turning bright pink. “I prepared my whole life to be in a back alley.” I expected him to cry, but he did not.

Like dat.

And he is kicking ass and taking names, weeping all the while.

How? Why?

Because he is just like his followers, that’s why.

Unbalanced in the extreme.

Contrast him to Barack Obama, a man of mixed racial ancestry whose whole life has been dedicated to achieving and maintaining a personal and societal balance in the face of a racist society that when he was born was still beating and lynching black men in the south for looking wrong at a white woman.

And the left is not backing Obama’s play because he is somehow not “radical” enough?

Please.

Wake the fuck up.

We are at a tipping point.

We either tip backwards into the nasty white supremacist past or tip forwards into a future that at least holds out a chance for survival.

This next month is going to tell the tale… at least the beginning of it. If there is a real rightward sea change in November’s vote…and I personally think that such a change is exactly what is going to happen unless the centrist hypnomedia is even stronger than even I have ever guessed…then the next two years will be the final battle.

Forward or backward.

Now’s the time.

Decision time.

Stop mewling about Obama’s tactical decisions and get behind his shit or lose it all.

Really.

WTFU.

Please.

AG

Republicans say they want to restore America. But restore it to what? They don’t want to cut carbon emissions or limit Big Oil and Big Coal’s continued dirty and dangerous drilling and mining practices. No, they want to expand them.

We will fight to increase access to domestic energy sources and oppose attempts to impose a national “cap-and-trade” energy tax.

Republicans don’t even want the EPA to require companies to make their industrial boilers release less toxic emissions of dioxin, mercury, carbon monoxide and other known health risks into our air by updating to the latest technology. The excuse they offer for allowing the continuous release of these poisons into our atmosphere reveals a massive display of arrogance and hypocrisy:

In June, the EPA issued a proposal that would force industrial, commercial and institutional boilers and heaters to use “maximum achievable control technology” to reduce harmful emissions that erode air quality and pose a public health risk. […]

The agency … has argued that implementing the rule would prevent 1,900 to 4,800 premature deaths in 2013 by reducing pollutants like dioxin, mercury and carbon monoxide, which are known or suspected to cause cancer and other serious health and environmental effects.

The EPA also lists a series of other benefits, including a reduction in asthma, bronchitis, heart attacks, hospital visits and lost work days. The agency says the value of the benefits ranges from $17 billion to $41 billion in 2013 alone — outweighing the costs of implementing the new rule by at least $14 billion.

But the Inhofe report — written by the Senate Environment and Public Works minority staff titled and titled “EPA’s Anti-Industrial Policy: Threatening Jobs and America’s Manufacturing Base,” — found that the proposed rule, known as “Boiler MACT,” could put nearly 800,000 jobs at risk over requirements on commercial and industrial boilers, cement plans and ozone standards. […]

A spokesman for the EPA told FoxNews.com that the agency had not seen the report yet.

“But the doomsday predictions we hear now are the same sort we have heard every time EPA has taken any step to implement the laws that Congress wrote to protect Americans from pollution in the air we breathe and the water we drink,” EPA spokesman Brendan Gilfillan said in a written statement. “Experience has consistently proved those doomsday predictions wrong for the past 40 years.”

Yes, these are the same Republicans who voted against eliminating the tax cuts for companies that send jobs overseas because to do so would “eliminate jobs in America.” So let me see if I can get state the GOP position correctly.

Cleaner air? Republicans say you can’t can’t do it. Would hurt US jobs.

Eliminating tax loopholes that benefit US companies that outsource jobs to foreign countries? Republicans say you can’t can’t do it. Would hurt US jobs.

Reduce carbon emissions to reduce the damage and cost of climate change and encourage investment and subsidize green energy alternatives such as wind and solar power to reduce dependence on fossil fuels? Can’t do it. Would hurt US jobs.

Drill more offshore oil and gas wells despite the risks inherent in that outdated technology as demonstrated by the BP Deep Water Horizon disaster? Must do it!

Remove more mountaintops to get at the coal deposits there despite a long record of environmental degradation, property damage and and ruined lives? Must do it!

Employ hydrofracking technology to drill for natural gas despite the fact that it poisons groundwater with chemicals and methane and makes homes and farms unlivable? Must do it!

Ignore all evidence of Climate Change and the costs to our world, both from an economic standpoint and the environmental devastation that is occurring as we speak? Must call it a lie and unproven and a hoax.

Reopen hearings on Climategate despite all the prior hearings by the British government and by a number of reputable scientific panels which cleared the climate scientists whose private emails were stolen and excerpts reported out of context to smear them and their work? Must do it!

In short, doing anything to clean our air, clean our water and eliminate carbon emissions in order to limit the effects of climate change is anathema to the Republicans in office or running for office. Unfortunately, doing nothing to stop more use of fossil fuels is literally suicidal for our nation: economically, socially, environmentally, ecologically and from the standpoint of public safety and human health.

(cont.)
* * *

I have a cold this morning because I was out and about in the rain here in Western NY (home of the ever lovable Carl Paladino) yesterday all day long. But despite my misery, and the soggy weather, things weren’t as bad for me as for the folks in Allentown, PA where they had over 8 inches of rain fall since Thursday.

In fact it has been raining all up and down the Eastern Seaboard, with flooding in Pennsylvania, New Jersey, Delaware, and especially in the Carolinas, where Jacksonville, NC had 12 inches of rain (isn’t that like Monsoon type weather?) in 6 hours yesterday. This massive outpouring of precipitation follows a relatively dry summer for the Northeast, which is why the National Weather Service was giving out flash flood warnings yesterday and today like candy on Halloween.

More rain is expected today as the remnants of Tropical Storm Nichole dump sheets of rain on the East Coast as far North as Maine.

Another day of flood-producing rain was expected along the Eastern Seaboard Friday as a weakening tropical depression worked its way into the Northeast.

Flood warnings and advisories were in place from the Carolinas north through Maine. […]

Wilmington, North Carolina, has received 22.54 inches of rain since Sunday, the National Weather Service said. It’s the highest five-day total in almost 140 years of weather records and Wilmington’s wettest September on record, the weather service said.

In many ways all this is eerily reminiscent of the massive snow storms the East Coast faced last winter (though not where I lived thank god). For example, Dulles International Airport in Washington, DC recorded 72.8 inches of snow last winter when the average year in DC has only 17 inches. At the time, Senator Inhofe, he of the “Global Warming is a Big Fat Hoax” made the record snow fall into a joke by having his grandchildren build an Igloo and call it “Al Gore’s New Home.”

Well Senator Inhofe, who’s laughing now? We’ve had record heat around the globe this year, and also record extreme weather events such as the floods in Pakistan that inundated much of the country killing thousands and making millions homeless. We’ve also witnessed heat wave related droughts in Russia which led to massive wildfires that killed hundreds of Muscovites from all the smoke and destroyed much of Russia’s wheat harvest.

In the United States we had the rare occurrence of 100 degree temperatures in New York City and Boston (among many, many other US cities), and Los Angeles just recently broke the all time highest temperature recorded there with a reading of 113 degrees on Monday, September 27th. We previously had late Spring floods in Mississippi Kentucky, Arkansas and Tennessee, the most devastating of which occurred in Nashville.

Add to the list the third lowest Arctic sea ice extent (i.e. amount of ice coverage) on record, as well as the quite possibly the least sea ice by volume (i.e. the actual amount of ice lying atop the Arctic Ocean) on record:

Arctic experts at the University of Washington use temperature, satellite, and weather data in a computer model to estimate the total volume of ice in the area. According to their model, the total ice volume in the Arctic is now at an all-time low, nearly 10,000 cubic kilometers less than the average of the past 30 years.

Then there is the little matter of our world’s coral reefs dying off due to increased temperatures in the oceans:

The biggest immediate effect of warmer ocean temperatures in the tropics has been the extraordinary death of corals, as Science laid out 3 weeks ago:

Reefs on both sides of the Thai Peninsula were hit, with up to 100% of some coral species bleached, says James True, a coral biologist at Prince of Songkla University in Hat Yai, Thailand. He expects at least 80% of the most sensitive species to die. “A few inshore reefs got so badly damaged, they probably won’t ever come back to the way they were,” he says. Among surviving corals, “disease is rampant,” True says, with two to three times the usual incidence of necrotic lesions and growth anomalies. Similar reports of “quite extensive bleaching” have come from Vietnam and through the heart of the Coral Triangle in Indonesia and the Philippines.

All these extreme events were predicted by climate change models and the most recent assessment report by the Intergovernmental Panel on Climate Change (though they didn’t predict that these changes would occur as rapidly as they are).

WASHINGTON, Sep 24, 2009 (IPS) – Less than three months before a key global negotiation on curbing greenhouse gases, a new study released here Thursday by the U.N. Environment Programme (UNEP) warns that climate change is taking place faster than anticipated.

The 68-page study, “Climate Change Science Compendium 2009”, suggests that many of the more dire predictions made by the Intergovernmental Panel on Climate Change (IPCC) – a group that includes hundreds of the world’s leading climate and atmospheric scientists – two years ago are increasingly likely to become reality.

The new report is based on some 400 major peer-reviewed scientific studies and research institutions over the last three years, and will be continuously updated as new studies are published. It warns that Earth may rapidly be approaching certain thresholds or “tipping points” that can permanently disrupt entire ecosystems that currently support the lives of millions of people.

Nonetheless, the Republicans continue to be the party that rejects the now well documented science of climate change and demands that our energy policy rely exclusively on the burning of fossil fuels: coal, oil and natural gas. Electing more of them to Congress will be dangerous to your health, your job and possibly your life.

No program to bail out big banks was ever going to be popular. And, with a $700 billion price tag, TARP came with some serious sticker shock. The right hated it, the left hated it. It basically transformed Ron Paul’s Tea Partiers into a national movement. But, you know what? I supported the bill when it was proposed, and I supported Geithner’s Plan to transform it. And I’m feeling vindicated right now, because it’s looking increasingly likely that the TARP program will turn a profit for the taxpayers. Officially the administration is still being cautious and saying the worst-case scenario is that we’ll lose $60 billion. But that’s just political cover. If we sold all our AIG shares at today’s price, we’d be in the black.

The foreclosure element of TARP has totally failed, and that’s a major, major problem. But the bill probably averted 20% or higher unemployment, the loss of the auto industry (or at least its strong unions), and the collapse of our financial system. And it did it without it ultimately costing the government any money. That is a remarkable accomplishment. It’s almost astounding.

However, it’s pretty hard to get any credit for it when the landscape is still pitted with the wreckage of the crash. We still haven’t figured out a way to patch the hole that let all the air out of balloon. How does reinflating the balloon even make sense when it was all based on an illusion?

So, people aren’t impressed that the banks are profitable again. In fact, that just pisses them off more, because the people haven’t recovered. Their mortgages are underwater. They’re unemployed. They aren’t profitable.

Nevertheless, those who voted for TARP made the correct decision. Those who wanted to nationalize the banks in the early days of the Obama administration were wrong. If they had done that, we would have wound up eating most of the money used in TARP instead of recouping our investment in two short years.

Here’s a review of my writing from the Spring of 2009.

The False Choice on Nationalization
A Look at Jane Hamsher’s Argument
Another Post on the Same Subject

From the last of those, a refresher on the mind of Paul Rosenberg (a moran):

Let’s start with a simple premise. If you are being critical of the Geithner Plan and calling for nationalization in its stead, the criticisms that you have about the Geithner Plan should not be equally true of what happens when you nationalize. There should be things that turn out more favorably or that involve less risk in nationalization. Nationalization should be a better deal in some sense. If all the criticisms you have about Geithner’s Plan are basically true for what happened with IndyMac, then there’s a problem with your analysis.

Now, in the case of IndyMac, the taxpayer took an anticipated $10.7 billion haircut because, in part, they are on the hook for 80% of future defaults on shitty mortgages. Under Geithner’s Plan, the taxpayer is on the hook for 85% of the toxic assets. So, that’s a five percent difference. In the case of IndyMac, the taxpayer provided (presumably) some sweetheart financing in the form of a $9 billion loan. We hope, but are not guaranteed, of getting that money back.

We nationalized IndyMac and we have no potential upside at all. There is no scenario where the taxpayer doesn’t lose billions of dollars on the IndyMac deal. In the Geithner Plan, we make money if the investors make money. In both cases, we assume most of the risk and we provide most of the capital, and we give extremely favorable terms to the investors.

Now…you might complain about both scenarios. You might argue that IndyMac was done wrong and we can do future nationalizations in a way that doesn’t lose the taxpayers $10.7 billion dollars. But if we nationalized a bank that is fifty times bigger than IndyMac and we lost the same percentage as we did on IndyMac, that would be a $535,000,000,000,000 loss. You can double that if we nationalized two banks of that size.

I don’t want to make a false argument that we will necessarily lose that kind of money by nationalizing or that we couldn’t have done better with IndyMac, or that everything would move according to scale, but we have to think about these things more carefully. There could be perverse incentives built into the non-recourse loans that are provided in the Geithner Plan and those incentives could result in a loss of money to the taxpayer. There’s risk involved in this plan. But to suggest that there isn’t staggering risk and unfairness in any conceivable nationalization plan is just wrong and I will keep pointing that out as long as I see the same arguments coming out of Left Blogistan.

So, yeah, we’re better off because we didn’t nationalize the banks. That doesn’t make it any easier to be unemployed or have your house in foreclosure, but at least we got our money back from the banks.

Cross-posted at WinningProgressive

Recently, my friend Jeff and I were working to identify a good short description of what progressivism is and why it matters. We came up with the following – keeping rat s**t out of baby food – which is shorthand for saying that progressivism is about using the tools of government to advance important individual and societal goals that individuals cannot reasonably achieve on their own and/or that the free market will not provide.

One hundred and four years ago, Upton Sinclair wrote The Jungle, which exposed the horrible working and sanitary conditions in America’s meat packing industry, including the significant amount of contamination that our country’s meat supply was subjected to. There is, of course, little that individuals could do on their own to make sure that the meat they ate was not contaminated, and industry refused to act. So, the government stepped up to help, passing the Federal Meat Inspection Act. A series of food safety laws have followed, vastly improving public health and making the U.S. food system one of the safest in the world. Protecting food safety remains a struggle, as Republican deregulatory zeal and industry lobbying have led to reductions in inspections and oversight. And proposed legislation to address recent declines in food safety is being held up by a single Republican Senator. However, overall our government continues to do a good job protecting the safety of our food supply – in other words, in keeping rat s**t out of baby food.

The food safety issue is an important one because it is a prime example of where the Republicans’ constant attacks on “government” run into reality. As Spandan C. over at The People’s View recently pointed out, the Republicans’ pledge to balance the budget, cut taxes, and protect Social Security, Medicare, and defense funding, would require the elimination of everything else the federal government does by 2020. While this result would please the tea partiers and their billionaire sugar daddies, it would not be popular with the vast majority of Americans, which is probably why the Republicans refuse to identify specific programs that they would eliminate.

So, the question to pose to people complaining generally about how we need to get rid of “government” is what functions of government they think should be eliminated:

• Food safety inspections and enforcement?
• Federal environmental laws that protect our air and water quality?
• The Safe Drinking Water Act, which ensures that the water that comes out of your tap is safe?
• National Parks?
• Medical care for our veterans?
• Student loans to help people be able to afford college?
• Our federal court system, which helps ensure that we are able to settle disputes peacefully?
• Construction and maintenance of highways and bridges?
• The Federal Deposit Insurance Corporation, which insures your bank deposits up to $250,000 and oversees the operation of banks?
• Consumer safety laws that protect us from cars catching on fire or baby cribs collapsing on your baby?
• The Federal Emergency Management Agency, which coordinates responses to natural disasters?
• The Centers for Disease Control and National Institutes of Health, which oversee research into diseases, help develop cutting edge pharmaceuticals, and keep outbreaks of contagious diseases in check?
• The Food and Drug Administration, which helps ensure the safety of pharmaceuticals?

We can and should have debates over whether specific government programs should be reformed, shrunk, expanded, or eliminated, and how we improve the efficiency and effectiveness of the government programs we have. The political debate today, however, is about something much more basic – namely, whether government is bad and should be eliminated outside of the military, Social Security, and Medicare, or whether government can and should play a role in helping our country achieve things that individuals cannot achieve on their own.

In short, do you want the government to keep rat s**t out of the food your baby eats, or do you want to leave that up to the free market? If the former, now is the time to get involved and make sure Congress stays in the hands of progressive Democrats in November.