Rochester’s very own Steven E. Landsburg, professor of economics at the U of R, has been debating the subprime mortgage mess and the economic downturn on the LA times with Jason Furman of the Brookings Institute. What is amazing here is the utter lack of pathos at all for home owners who’ve lost their homes, and worse yet, the repetition of the canard that those with subprime mortgages simply lived beyond their means and deserved the punishment:
What can we blame? – Los Angeles Times
The sub-prime crisis has led to a lot of home foreclosures and a lot of unhappy former homeowners. But it was sub-prime lending that allowed many of those people to be homeowners in the first place. The fact that you got to live beyond your means for a few years should not create a presumption that you’ll get to live beyond your means forever.
Much to our enduring delight, Landsburg pays at least a bit of lip service to “sympathizing” for those “experiencing hardship,” a phrase that exudes all the empathy of a Microsoft error message. But when he says folks were “living beyond [their] means,” it’s worth mentioning that this is not a case of a few people accidentally getting free HBO for a week. We’re talking about people’s homes, and losing your home is likely bound to make you more than simply “unhappy.”
More importantly, let’s keep in mind just who it is that was living beyond their means. The same banks who make the determination as to whether or not you qualify for a mortgage (whether or not the house you want is “within your means”) also made the determination that lowering their standards was a profitable move. Joe Sixpack did not force the bank to give him a mortgage, but Joe Investor Class sure made it seem like a good idea. When the housing market lost value through no fault at all of the newly-minted homeowners – when the profit gravy train turned into a money pit for banks – it was also they that decided to then use said homeowners to rake in more cash by raising their interest rates through the roof.
And if you can’t find a way to be a bandage on the bloody wound of the banking industry, they don’t need your ass.
So really, the question is not about whether homeowners and hard working Americans lived beyond their means, but whether the banks did. If you think they should suffer for their crimes, I’m right there with ya, Bub. But of course, we know that’s not going to happen.
No one here gets out alive.
You get your’s, baby, I’ll get mine
Gonna make it, baby, in subprime:
Mortgage crisis hits hardest for city’s poorest
There were 1,100 high-cost loans in the city in 2004 vs. 1,962 in 2006, she
said. In several neighborhoods, more than 50 percent of the loans in that
period were high cost, said van Kerkhove, who added that there were also many
such loans made in inner ring suburbs.One-in-five subprime loans made in 2005 and 2006 will end in foreclosure, said Ali Solis, vice president of public policy for Enterprise Community Partners, based in Washington, D.C. “We have a crisis of magnum proportion we have never seen before,” Solis said.
Dean Baker at the American Prospect notes a little-reported fact in the wake of the half-point Fed interest rate cut a few days ago: the long-term rates at most banks actually went up.
That’s not how most of us think things are supposed to go. And indeed, it isn’t how the system generally works. But with banks losing so much money on foreclosures they invented with their own greed, they’ve taken the opportunity to bail themselves out at Ben Bernanke’s largess:
Beat the Press Archive | The American Prospect
There is another story in which the answer is less ambiguous. Banks borrow short-term and lend long-term. If they can borrow at a lower cost and lend at the same or higher interest rates, then they are unambiguous winners. For them, a rate cut that increases the spread between long-term rates and short-term rates is clearly good news.
Chuck Todd on MSNBC makes what is quite obviously a mistake in his choice of phrasing while discussing John Edwards’ departure from the campaign trail. About half way into this video, Todd says, in discussing who Edwards will endorse now that he’s out, “and then on the other hand, you’ve got the Obama folks who think that once you’ve gone anti-Clinton, you. . . um, you’re not going back.”
With all apologies to you squeamish people out there, but that’s just funny.
The Congress is coming at Attorney General Mukasey pretty hard, as well they should. In an exchange with Senator Biden, Mukasey basically told the Senate that the Detention Act’s “shock the conscience” language is basically all relative to the reason for torturing; that there is no hard-and-fast definition of that mandate and therefore no solid way to say that waterboarding is illegal. And anyway, he insists the CIA isn’t doing it anyway.
Dick Durbin tried again to pin him down, and this time, Mukasey basically told him that the Congress would need to pass an entirely new law that specifically forbade waterboarding. Can you imagine that this is the state our nation has come to? We need a law to prevent torture. Then, by all means, let’s have the law.
Another h/t for Crooks and Liars today, and there’s lots more cool links in that post, so check it out. Apparently, white Southerners are using the word “Canadians” as a euphemism for “blacks,” or whatever racial epithet you prefer, in an attempt to slur blacks without too many people knowing what they mean. It was on Boing Boing, so I naturally thought it was a joke, but it’s not.
I’m a bit disappointed: whitey’s gone all pussy on us.
In the U.S. south, is Canadian a new racial slur?
Last August, a blogger in Cincinnati going by the name CincyBlurg reported that a black friend from the southeastern U.S. had recently discovered that she was being called a Canadian. “She told me a story of when she was working in a shop in the South and she overheard some of her customers complaining that they were always waited on by a Canadian at that place. She didn’t understand what they were talking about and assumed they must be talking about someone else,” the blogger wrote.”After this happened several times with different patrons, she mentioned it to one of her co-workers. He told her that ‘Canadian’ was the new derogatory term that racist Southerners were using to describe persons they would have previously referred to [with the N-word.]“
Edwards is out. Who’s he going to endorse? Well, as you can imagine, that’s a big, big question in this hotly-contested primary season. So, ass-kissing will now ensue. Well, Hillary got the first crack at John’s crack in an interview on Fox 6 in Birmingham, Alabama:
It’s not hard to garner at least some enthusiasm from some quarter of our community whenever you want to discuss putting a new Fast Ferry in operation, or a casino on Main St., or a refilled canal to replace Broad St. Neato ideas and boffo enthusiasm can always be found in things we see in other cities and like. I’m still enamoured with Ra-Cha-Rant‘s idea of LED-lit buildings downtown. There is, after all, a certain melancholy pride in this city just waiting for a reason to believe in our potential to do great things and be a great community.
But the Fast Ferry is dead, the RenCenter is shrinking like nad sac in the snow and it now seems as though the city’s great minor-league sports teams are in dire shape. Might it not be time for us to start thinking about the “Great Unsexy” of municipal governance? Rather than seeking out the next inspirational project that will raise the profile of one corner of our city, might we not want to focus on those necessary things that make our city intrinsically more valuable?
Imagine the improvement if instead of throwing money after every new ass-brained idea that comes down the pike, we concentrated on keeping our streets – all of them, not just East Avenue – clean and well-maintained. Imagine the improvement to local businesses if the sidewalks around town were reliably free of snow in the winter and garbage in the summer and allowed regular foot traffic as they’re designed to do. Instead of chasing down investors for a casino downtown, it might be better to have a flower pot next to every tree on the streets through downtown.
Despite what many would have you think, when businesses are asked what features of a city most attract them to new investment, the answer isn’t lower taxes or a conveniently-located Italian-themed marketplace. The answer is routinely some combination of an educated workforce and reliable infrastructure, which means well-maintained roads and communications lines. Funny thing: not only are these things good for business, but they’re good for the citizenry as well. And who could complain if we spent our time, talent and treasure building livable communities and good jobs?
I will say that, in my neighborhood at least, the maintenance of the streets has improved somewhat this year. And while nothing is perfect, the Zero Tolerance program has proved – quite predictably – that the simple increase in police presence in our streets helps abate violent crime by a significant margin. So, let’s all put our effort into convincing the Duffy Administration to keep up the good work they’ve done in these areas and eschew the next “monorail-esque” project the contracting community pitches them.
H/t to Crooks and Liars for this one, Harper’s Online discusses the sad and predictable state of ethics reform in Washington. Meet the new boss, same as the old boss.
Well, it appears as though just about every minor league team in Rochester is in danger of either collapsing or leaving because of some exceedingly bad financial moves by the ownership. That’s the news from the D&C today, in their piece entitled “Fast-ferry future for city’s teams?,” an unmistakably gleeful choice of words.
The question in my mind is: are these bad financial dealings the result of an inept leadership or were they the desperate tactics of a failing business model? The truth is doubtless somewhere in the middle, but it makes a big difference in terms of what happens next. My suspicion has always been that the city’s market is just too small to support all those teams, especially for things like soccer and arena football, which are niche sports with a very small audience in the first place.
I’m just hoping that, in an effort to save face for the city, the mayor doesn’t decide to try to take over Paetec Park unless it can be proven to be a money-maker. I would say that we need to have someone take a serious look at what kind of entertainment/sports venues this city can really support – that we could use a master plan against which to work – but I think we all know by now these things are run by the contractors, not by our elected officials.
Vive la CMCE.
