Archive for February, 2010
I ran into him as he was returning from a vote. It was windy outside, so the sound quality is poor. But… well… it’s kinda like bad handwriting. You can discern what’s being said, even if it is a bit of a struggle. And Joe has some interesting things to say, namely that the stimulus did create jobs, he liked the tax cuts it contained and that he hated the bailouts [that he voted for, ed.]
At yesterday’s health care discussion, Louise Slaughter told a moving story.
An elderly woman needed dentures but couldn’t afford them. Her sister had dentures. When she passed, the surviving sister “inherited” the dentures and used them as her own.
Rush Limbaugh thought that was the funniest thing the world’s ever heard.
This morning, I brought that audio with me to the Hill to ask some Representatives what they thought.
I wasn’t able to get Paul Ryan’s opinion; he fled as soon as I started playing the clip.
But Trent Franks had a long, reasoned discussion with me, and in it, drops a real stinker, beginning at around the 6:10 mark. He’s of the belief that blacks are “more devastated” today than they were under slavery because of the rate of abortion in the black community. It sounds an awful lot to me like the Congressman is suggesting that blacks were better off as slaves.
To be fair, Congressman Franks is as sincere as he is conservative. The issue of life never falls out of first place in his legislative priority list. I don’t believe for one second that he intends to insult anyone; I don’t think he sees the racism (or paternalism) in what he’s saying. Still… This is pretty bad.
Jason Chaffetz, who has had some pretty intemperate things of his own to say in his short time as a Congressman, has the sense to say that he disagrees with Rush’s lack of compassion.
Finally, Doc Hastings is just hilarious.
Look… Talk-radio, led by Rush Limbaugh and Glenn Beck, leads the Republican Party. The RNC is virtually impotent by comparison. Steele clowns, Rush frowns, and Steele (or any other Republican) apologizes. Elected Republicans simply cannot work with Democrats because Rush Limbaugh has the power to fire them if they do. So… until Rush Limbaugh is ready to work in a bipartisan manner, I don’t expect to see any such thing on the Hill.
There’s a story in the New York Times about the newest Senator, Scott Brown. Seems that back in the eighties, he showed up for a date wearing a pair of pink leather shorts. I was hoping to catch him today to ask, “Sir, are you now, or have you ever been, a metrosexual?”
Alas, I missed out.
Instead, here are Senators DeMint and Corker sharing their thoughts.
Late last year, Morgan Stanley, in essence, defaulted on a 10-digit mortgage debt they were carrying. They looked at a tanking commercial real estate market and realized they’d never get the return they assumed when they ran the numbers before borrowing the money to purchase the buildings. They made a business decision, mailed the keys to their creditors, and walked away from the deal when it soured for them.
Soon afterward, in New York City, Tishman Speyer Properties and BlackRock Realty returned one of the country’s largest apartment complexes to its creditors under similar circumstances. They had purchased the property for $5.4 billion; today it’s worth only about $1.8 billion.
In both these cases, contracts were signed. One could say that both Morgan Stanley and Tishman Speyer Properties/BlackRock Realty took out real estate loans (or mortgages) and promised to pay them back. When they mailed their creditors the keys and walked away from their promise to pay, one could say they broke their word, right?
Well… In a word: No.
You see, the contract they signed provided for exactly what happened. The money they borrowed was secured by the properties. If they failed to pay, the creditors got to keep everything they had paid to that point, and they got the buildings. In these cases, you can be pretty sure that the borrowers were “under water”; they owed more on the properties than they could possibly hope for in an open market sale (added to the equity, if any, they already had in the properties). After all, if their equity plus the sale price exceeded what they owed, they’d be better off selling and keeping the difference.
Why do I bring all of this up?
Well, because right now, hundreds of thousands of home-owners are under water. In late 2006 they bought a house for, say, $250K with nothing down. They have an exotic mortgage – let’s say they bought the house with a “balloon mortgage” and their payments were pretty low for the first three years, but have doubled in the last month or so. Let’s say they bought their home in Las Vegas or Arizona – markets that have been hit especially hard by the real estate bust. And let’s say a home identical to theirs, right next door, was sold yesterday in a foreclosure sale for $130K.
Why in the world should these homeowners pay that mortgage? After all, their debt was secured by the property, just like the commercial cases cited above. In most cases, they’d be fulfilling the terms of their contract by mailing in the keys and walking away from the house. In fact, by doing this, they’d save almost enough money to purchase the next house that sells in a foreclosure sale – perhaps even the one they’re in!
A word of caution: none of this is legal advice. Talk to a lawyer, accountant and financial advisor before considering this route. In some places (but not most), mortgage-holders are allowed to seize property above and beyond the real estate that secured the loan.
The point I’m making here is that we only hear about “moral obligations to pay debts” in the context of consumer conditioning. Such nonsense doesn’t apply to big business.
The John Galts on Wall Street don’t constrain themselves with morality considerations; they look at the numbers with lizard-eyes and make the decision that ensures the number at the bottom of the page is as big as it can be. An ugly truth is that corporate law establishes a fiduciary responsibility – corporate decisions must be based on the what will return the largest profit to shareholders. If that means welshing on a debt, then welsh they must.
I personally believe it is time for consumers to understand that they have a similar responsibility to themselves and their families. If faced with a choice of enriching a bunch of lizard-eyed bankers or putting their kids through college, I hope more Americans do what is best for them and their family in the long run.
I asked Chairman of the Senate Banking Committee Chris Dodd about this earlier this evening (I mistook JP Morgan for Morgan Stanley, please forgive the error). As Chairman of the Banking Committee, he was careful about what he said, but what he said was sensible: talk to counsel and determine what is best for you.
Dodd’s response may very well send shock waves through the banking community. Wall Street’s biggest fear is that the cultural norm of “pay your mortgage (and other debts)” falters. But, as I said, bankers and other businesses walk away from sour deals all the time. If it makes sense for you, you should learn a lesson from the “Masters of the Universe” and do the same. Just be careful and, at a minimum, consult a lawyer that can walk you through the costs and benefits first.
To his credit, he spoke with me. One senior level House Republican (unnamed for now) spent much of the day doing his best to avoid me.
Anyway, Issa didn’t want to be bothered with facts. He had a world-view to uphold, and facts would introduce an element of cognitive dissonance that he’d obviously rather not deal with.
Truth be told, Issa is one of the richest members of Congress. A progressive government (and the tax code changes required to pay for it) would have more impact on him than virtually any other elected official in Washington. So I can understand his motivation, if not his amorality.
Hypocrisy’s home is politics, but even this is pretty extreme.
Chairman Steele dismissed these stats because they were put out by Obama administration. When I pointed out that these are Department of Labor stats and not politicized, he said they were still the product of government work.
But these are the same stats amassed by the the very same bean-counters he and every other Republican rely upon when they remind voters of the high unemployment rate.
I’ll be writing up a longer post about this, because the folks I talked to were, for the most part, not as extreme as some may have expected. An examination of the list of people I polled may explain that:
- A black dude from Ohio
- a white guy from Connecticut
- A gay white man from Washington DC
- A white woman from New Jersey
- One of the original signatories of the Mt. Vernon document, Colin Hanna (an older white man)
- A young white girl from the suburbs of NYC
- Eric Wargotz, The presumptive Republican nominee for the US Senate currently occupied by Barbara Mikulski
- A white woman from Atlanta
- A white man from Iowa
As you can see, the folks I polled were mostly from Blue states, so it’s probably no surprise that there views were fairly moderate. I’ll be tabulating the results soon enough, but for now, here are a couple of the more newsworthy and/or entertaining and/or alarming interviews.
First up… Dr. Eric Wargotz, the Republican Senate candidate from Maryland:
And here is the woman from Atlanta:
After missing the fun for the last two or three years, I was finally able to make it back this year. And this year’s CPAC was a really good one…
- Jonah Goldberg and I discuss the Democratic stimulus package.
- Michael Steele and I chat about the same thing.
- Jonah and I talk about fascism and his book.
- I poll a whole bunch of Republicans using the DailyKos poll questions from a few weeks ago that attempted to measure the degree of Republican extremism.
- I conduct that poll with Dr. Eric Wargotz, the presumptive Republican nominee to challenge Barbara Mikulski for her MD Senate seat. Would anyone be shocked to learn that he is a full-bore birther that believes Obama was born in Kenya?
- I’m holding my most explosive video back for a few days… Keep checking back though…
Let’s kick things off with Jonah Goldberg and I talking stimulus:
My last post generated some feedback from folks I respect. The point I want to respond to is that the wedge isn’t meant to wedge far-right tea-partiers from the Republican ticket; rather it’s to demonstrate to persuadable independents that Republicans are nuts and unworthy of office.
I think that’s a fair point, and I think this can be one minimally effective tactic in the Democratic arsenal; the problem is that this is all that’s come from any of the committees re: electoral strategy for 2010. And this is a pretty thin reed to hang for Democrats to hang their hopes upon. It depends on the media picking up your message of Republican flip-flopping and taking it to those persuadable independents. Or, in the alternative, it depends on some pretty strong Democratic ads in the immediate run-up to the election.
Aside from the fact that Democratic media shops are famously inept when it comes to making ads, I just don’t think the flip-flop message, no matter how starkly portrayed, will be an effective parry to the “incompetent Democrats that can’t solve nay of the nation’s problems when they control the entire government” message that has already taken root.
Without a strong legislative session (something that’s pretty rare in election years, and probably even more rare when Republicans are willing to use every procedural tactic in the books to minimize the quantity of work that can be done in a year that will be shortened by campaign considerations as it is) to run on, the “incompetent Democrats” narrative will have another 6 months to sink its roots deeper into the national consciousness. By the time Democrats break out their commercials, opinions are going to be pretty well set.
Democrats need to either break out the bludgeons and furiously ram their agenda through the Senate or suffer the (deserved) consequences. Harry Reid had 60 votes and seems to have not even given a passing nod to the idea of party discipline. The rest of the caucus kept this ineffective leader at the helm, even as he followed Lincoln, Landrieu, Bayh, Baucus, Lieberman and Nelson over the electoral cliff. The idea that a core group of progressive Senators couldn’t get together and make clear that no Agriculture bill would pass if they didn’t get substantive health care is still something I just don’t understand.
The last election was nationalized. People expected Obama and the Democratic Congress to keep the promises they made. They broke the trust they had asked for during campaign season. And why? Well, as far as I can tell, they bent over backwards to appease a bunch of people that hate them no matter what they do. They need to get back the the reality-based world the rest of us live in and start producing if they expect to minimize losses in 2010.
It’s been a few days, so DSCC Chair Robert Menendez’s comments regarding 2010 electoral strategy have faded from the news. I’ve been mulling them over and come to a conclusion: Once again, the people responsible for developing Democratic electoral strategies are a bunch of raging incompetents.
“Given the pressure Republican candidates feel from the extreme right in their party, there is a critical — yet time-sensitive — opportunity for Democratic candidates,” the DSCC writes. “We have a finite window when Republicans candidates will feel susceptible to the extremists in their party. Given the urgent nature of this dynamic, we suggest an aggressive effort to get your opponents on the record.”
The memo urges Democratic candidates to force their opponents to answer a series of questions:
“Do you believe that Barack Obama is a U.S. citizen? Do you think the 10th Amendment bars Congress from issuing regulations like minimum health care coverage standards? Do you think programs like Social Security and Medicare represent socialism and should never have been created in the first place? Do you think President Obama is a socialist? Do you think America should return to a gold standard?”
If a Republican candidate says no to any of the questions, the memo says Democrats should “make their primary opponent or conservative activists know it. This will cause them to take heat from their primary opponents and could likely provoke a flip-flop, as it already has several times with Mark Kirk in Illinois.”
The assumption seems to be that the tea-party crowd will not return to the Republican fold when their nominees move away from appeasing the crazy base and moderate their rhetoric for the general election. Good luck with that.
The fact is that tea-partiers aren’t stupid and can identify (and vote for) what they perceive to be the lesser of two evils. And they’ll do that.
In the main, the tea-party movement is a psychological phenomenon. Conservative Republicans, unhappy after the election of a Democratic President and Congress, looked for someone to blame. Led by talk radio, they came up with the idea that the American people turned against Republicans, not conservatives, because they had abandoned their principles. Not wanting to be associated with failure, they separated themselves from the Republican Party and, through sheer force of numbers, co-opted the nascent tea-party movement that was then comprised of mostly Ron Paul-styled anti-Fed activists riled up over TARP and associated bailouts.
In truth, they remain conservative Republicans and will continue to do whatever Rush Limbaugh tells them. Democratic strategists make a huge mistake when they assume otherwise. You doubt this? Ask yourself: how many tea-partiers voted for Obama or the Democratic candidate for Congress?
Another glaring erroneous assumption underlying the Democratic strategy is that these conservative voters will not tolerate or vote for candidates that deviate from tea-party orthodoxy; that by exposing the flip-flops of their opponents, Democratic campaigns will demonstrate that their opponents aren’t “real conservatives” and depress the Republican base.
Again, that takes for granted that conservative voters will penalize wayward Republicans. Fat chance.
George Bush said America shouldn’t be nation-builders, then invaded and occupied Iraq. He ran against big-government and then created a huge new unfunded entitlement in Medicare Part D. He was supposed to be the “MBA President” and then gave us a failed war, incompetent response to Katrina and a ruined economy. The same tea-partiers that decry Obama’s profligate spending were just fine with the exploding Bush deficit. After all this, nearly 1/2 of Americans voted for John McCain. The objective truth is that conservative voters are imbued with an incredible tolerance for hypocrisy and cognitive dissonance. So long as conservatives have a “daddy” like Rush Limbaugh telling them what to do, they don’t get mired down in little details like the way their leaders actually govern.
Democrats don’t want to hear that Obama was elected because the Democratic base was energized, but it’s the fact. He ran as a progressive and promised a marked break with the failed policies of the past. Eight years of Bush and an enabling Congress turned out to be about four years to many; folks that weren’t inspired by Kerry in 2004 turned out in droves for Obama. Moreover, disengaged independents had seen enough and broke for Democrats in places like Florida, Ohio, Virginia and North Carolina.
A little more than a year later, the mood in the country is decidedly anti-incumbent after months of hearing about dysfunctional government and not seeing any of the promised “change” Obama rode to victory on. The media has filled the vacuum with sympathetic story after sympathetic story about the anti-government tea-partiers. The latter circumstance reinforced the former; the result is an energized conservative electorate and a growing snowball of anti-incumbent fervor amongst low-info independents. Hyped Democratic losses in New Jersey, Virginia and, especially, Massachusetts, provided even more fuel for the fires driving conservative enthusiasm.
Democratic strategists need to realize that any hopes they have of minimizing damage in 2010 hang entirely on establishing a string of legislative successes that people feel in their lives and credit Democrats for. They need to turn out their own base and that ain’t gonna happen unless you give them something to be happy about. At the same time, they need to take back a chunk of independent votes by demonstrating that government can be a competent force for good.