JMM,

I am lucky to have the luxury of a good amount of the time to devote to grokking the crucial issues of the day, and I still have a great deal of difficulty keeping up. I need more specific talking point help from TPM.

Here's the example which prompted this plea: I was watching the MMFA clip featuring the FOX morning clowns pushing disinformation about the effect on small business' of the House's new proposal, and I realized that I could not--with certainty--accurately refute their BS.

Even after going directly to the bill... I remained fairly confused. What are their financial options and responsibilities under the new bill? To what degree will tax breaks or other considerations mitigate those costs? What percentage of small business' have payrolls under 250, 300, 350 & 400k? Are we talking about 20% or 80% of all small business'? And so on.

Same thing with Cap & Trade, EFCA and countless other issues.

I don't need to be told what to say, but I would sure appreciate some factual guidance from a pro organization whose name suggests they live for this stuff, and have the professionals to do the digging and write up a clean, no crap ongoing primer.

I'll take it from there - talking with co-workers and friends, arguing online and pressuring my representatives. AND I'll support your advertisers - FOR REAL; and let them know why I'm doing so.

So help me out TPM; I have a feeling I'm not alone.

It seems clear that in order for the protesters to win (or even survive) the coming confrontation some significant elements of the armed forces will need to switch allegiance - or at the very least stand down.

From what I've read it is unthinkable that the militias will do so, and highly unlikely that the Revolutionary Guards will do so.

But I have heard virtually nothing about the army or the police forces. Does anyone know what these force's politics/allegiances are? Or the chances that they will refuse to harm their neighbors?

What is needed is for the online reader to be able to instantly determine whether the claims/assertions/purported quotes she is reading are factual.

To that end I propose a "Wiki" like tool which would enable the "wisdom of the crowd" to review web articles/interviews/columns and place links to originating documents, previous interviews, etc. around any highlighted piece of material.

No opinion, just links to objective fact.

Obviously, the program would require that the reader download it, and have it running in the background any time she is reading online. I shouldn't say obviously since I have zero tech chops, and no idea if this idea is technologically feasible (there are dictionary programs out there that do something like this for individual words or phrases).

What I am certain of is the willingness of an army of smart folks to do the legwork of tracking and linking, and that the general reader would be thankful for, and well served by the service.

Oh, and I'm sure that we could eventually find a place for blogy opinion on the links if the reader chooses to enable that option. My default cautionary stance around this stems from a fervent desire to see a re-emergence of simple fact in our public dialogue.

Thoughts? Is this possible? Is it already being done somewhere?  

I know that it's getting more difficult to shock us anymore with the level of lying and manipulation in the news these days, but when I saw this little piece of garbage courtesy of MediaMatters, I found myself wondering what the impact would be if somehow everyone could see this one news piece. Would righties be affected at all? How would they rationalize not being affected?

Amongst all the mortgage mess/credit crunch/bank bailout/global recession palaver the condition of the distressed homeowner continues to get short shrift.

 

This is perhaps because to pay too close attention to this problem is to be reminded of how we got ourselves into this mess. Not just that the meltdown in home values precipitated the current crises, but that the artificially prolonged housing bubble was a main structural prop in our economic house of cards.

 

We took a real truism - that property values in the United States always end up going up, and made ourselves believe that they continuously go up. We had to engage in this collective delusion because the tens of thousands of dollars the average American family extracted from their semi-annual refinance was--except for national borrowing--the only thing keeping our society's financial boat afloat.

 

To accomplish this feat our financial wizards invented complex new financial instruments better suited to creating the illusion of wealth than actually creating it. "Masters of the universe", preying upon the almost primal yearning for one's own home, cynically exploited those desires in order to keep the charade going for yet one more round.

 

And we all joined in.

 

My main purpose here is to point out that the stretching of a basic truth beyond recognition does not alter that basic truth; in this instance, that home values in America always end up going up. I emphasize this idea because it is central to my modest proposal: the federal government should, yes, exploit, that belief/fact to help us out of our present difficulties.    

 

The Fed would create a program wherein every resident homeowner who owes more on their home than it is presently worth is given the option to refinance their mortgage at the home's present value, and at a 30 year fixed rate. In return--with an eye toward that eventual price rebound--the homeowner will sacrifice some equity opportunity for a fixed period of time.

 

The Federal program would require participating banks, mortgage companies, investment banks or packaged securities holders (the bank) to offer the restructure deal to all eligible homeowners who opt to participate. No cherry picking.

 

The average value of a home in the U.S. has fallen approximately 20% from its high in 2006. For our purposes then, we'll use as our example a home where the original mortgage was $500,000, and the home is presently worth $400,000. The bank would refinance the home at $400,000, at a fixed rate.

 

The Fed provides banks 2/3 of the difference between the original mortgage and present value; in our example: $66,000. This punishes banks ($34,000 or about 6.5% of their original investment) in a modest but meaningful manner for their irresponsible lending, but enables them to replace a toxic asset with a relatively strong one, as well as providing a jolt of desperately needed liquidity, which when multiplied by most of their eligible mortgages, would significantly add to the banks' health.

 

The homeowner is relieved of $100,000 in debt, and has the remaining $400,000 put on significantly more affordable terms. In exchange the homeowner signs a 7 year (could be 5 or 10?) "equity note" where he gives up any equity accrued (above $466,000) during that period.

 

To recoup its money, the Fed packages the notes, and issues 7 year bonds (or some other instrument?) backed by the notes. Investors worldwide who have confidence that the U.S. housing market will bounce back in that timeframe will purchase these bonds. At the end of the bond's term the Fed will pay the bond holder the difference between $400,000 and the home's value at that time. The actual payouts would, of course, be based on an average of notes from all over the country.

 

The homeowner would not be required to actually refinance the home at the end of the 7 years. The Fed gets repaid when the homeowner eventually sells the home, or when she refinances at some point to free up equity accrued above the amount at the end of the 7 years. Her mortgage remains based on the $400,000 principle until that time. What the Fed will likely do to pay the bonds is just issue some simple interest debt backed by the liens on the participating homes, then pay off that debt as it is paid when the homes sell or refinance.

 

The 7 year term is a best guess. It is based on the average U.S. home value having fallen approximately 20% from its high in the summer of 2006. Certainly, lesser "underwater" figures will mean shorter notes. But the general question remains the same: what length of term(s) would give the housing market the chance to make enough of a comeback to make the notes attractive to investors and fair to homeowners? Finally, there would almost certainly need to be some limited form of guarantees on these notes and mortgages from the federal government.      

 

My thinking is that there would be a self-fulfilling aspect to this plan; the massive injection of liquidity would spur more housing purchasing, which would in turn raise home values. I would hope that this effect would go a long way toward assuaging the frustrations of those homeowners who do not directly benefit from the plan.    

 

This proposal is meant as a starting place in an attempt to help out distressed homeowners, put a floor under the housing market, and infuse a huge amount of liquidity into the credit markets without that infusion coming in the form of more national debt. I've obviously left out tons of detail, but the general idea is all here. If there are fundamental flaws in the idea, or any ideas for improvement, please let me know.

     

Headlines across the web this morning are touting the report by the National Intelligence Council, "Global Trends 2025", which predicts a widespread shift in power from the U.S. to Russia over the next 15 years.

Just so happened that in the next moment I noticed a piece of news from Moscow reporting some funny business in the high-profile trial of three men in the killing of Russian muckracking journalist Anna Politkovskaya. The military court (what's in doing there?) decided on the eve of the trial that proceedings would be barred to the public due to fears by jury members of possible recriminations if the men were convicted. Only it turns out the judge was full of shit; the jury expressly wanted an open court. And remember, prime minister--and once and future president--Vladimir Putin has been strongly rumored to have had a hand in this affair.

The second of these two news items instilled in me a profound doubt about the accuracy of the first. My next thought was to recall how, in the late eighties, Japan was going to emerge predominant with an centralized economy vis-a-vis MITI and the various Zaibatsus.

I think there is a lesson or two to be re-learned here:

1. a country does not get to become, or better, the good ol' USA with pretend democracy, openness and free markets.

2. it is precisely the laissez-faire political free market that is this country's greatest strength. In the end, as we heap deserved ridcule on our wonderful country, we heap ridicule on, and we destroy, those who would hurt her - and we do it more and more at the margins.

I welcome the "rise of the others"; a stronger world and a bigger pie can only be good for America.

But let's not forget who--for all her warts--is the prettiest girl at the dance.  





 

When I was a somewhat younger man, I worked at small non-profit which was run cooperatively. The folk in that small group were considerably more left-leaning than I, and we took real pleasure in exploring our different takes on the issues and society at large.

I would often gently scold my "Reagan is evil" friends--in the manner of a frustrated but patient Higgins--to remember that we lived in America, and our institutions were effective at rooting and stamping out the sort of behavior they were concerned about (Iran-Contra, et many al).

Alas, as this administration wreaked its merry havoc on the constitution, and as its minions worked to coarsen discourse, I journeyed several times through the stages of grief, and can now say with certainty that the country that young man imagined(?) is gone. My vaunted institutions did not stand against the evil, they were often its agents. The honest middle is a killing ground; a twilight zone where consideration of another's view is evidence of weakness.

It's often said of the Arab world that they respect only that kind of cynical strength that will do anything to win; sadly, I think the same must be said for Americans now. The insinuation of religious fervor into our politics has led us to dim place where it is difficult for many to distinguish between their candidate and our lord, and where certainty is the cool whole-cloth which covers lies as well as it comforts. 

In an environment where honest discourse is dis-allowed, it behooves us to go long, to fight for our 100%. After all, we're pretty damned sure we're right too. And just maybe, when we have brought the country of that young man back to life, our erstwhile political enemies will recognize it as the same thing they remembered and loved as well.

Hey, anything's possible.