Mojo

Mortgage Association Has Mortgage Problems

| Tue Feb. 9, 2010 3:27 PM PST

The real estate situation is so bad, even the mortgage associations are having a hard time with their mortgages.

Last Friday, the Mortgage Bankers Association sold its $90 million headquarters—for $41 million.

As Dean Baker, co-director of the Center for Economic and Policy Research, mused to the Washington Post"It's a little bit of irony that in the middle of the mortgage crisis brought on by the bad lending practices of many members of the Mortgage Bankers Association that they got caught up in the same problem."

I believe that's what they call a taste of your own medicine.

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The 700 Military Bases of Afghanistan

| Tue Feb. 9, 2010 2:32 PM PST

Once is an anomaly; twice is the beginning of a pattern. Right now, we’re seeing the same sequence of events for the second time in less than a decade, and it looks like the signature American way of war in our time is coming into focus. 

In 2003, when the Bush administration invaded Iraq, the Pentagon already had on its drawing boards plans for building a series of permanent mega-bases in that country. (They were charmingly called "enduring camps.")  Once Baghdad fell and it turned out that, Saddam Hussein or no, the U.S. was going to have to fight rather than settle in and let the good times roll, hundreds of micro-bases were added to the mega ones—106 of them by 2005, more than 300 in all. Then, in 2005, Washington decided to trade in its embassy in one of Saddam’s old palaces for something a little spiffier. In its place, on a 104-acre plot by the Tigris River in the middle of Baghdad, for at least three-quarters of a billion dollars after cost overruns, it built the largest, most expensive embassy on the planet. It was planned for a staff of 1,000 "diplomats" with all the accoutrements of the good life and plenty of hired help. (Even now, despite much discussion about "ending" the American role in Iraq, further plans are reportedly being made for the embassy’s staff to double.) This was clearly to be U.S. mission control for the Greater Middle East. 

Building of this expansive kind is, of course, a staggering imperial undertaking. It implies a global power with resources beyond measure, for which waste means nothing. The mega-bases and the embassy were, in that sense, American wonders of the world, our own ziggurat-equivalents in Mesopotamia, right down to the multiple PXs, familiar fast food outlets, and miniature golf. No empire had ever launched a base-building program quite like it (if, that is, you leave out the precursor to this whole experience, the U.S. in Vietnam in the 1960s). 

The Iraqi base-building project alone had already absorbed several billion taxpayer dollars in just the first half-year of construction in 2003. But it did look like a one-of-a-kind architectural adventure— until, that is, the "forgotten war," the one in Afghanistan, came back into view. Starting in 2008, base building ramped up there, went into overdrive in 2009, and hasn’t come out of it yet. The result: an even more staggering base-construction splurge, and with it, the announcement last year that another monster embassy would go up, this time in Pakistan’s capital, Islamabad, for another cool near-billion. (The already large U.S. embassy in the Afghan capital, Kabul, would also be further expanded to the tune of $175-200 million). And keep in mind that none of this even includes the huge ring of supporting bases for America’s Afghan and Iraq operations in the Persian Gulf, South and Central Asia, and even on the island of Diego Garcia in the Indian Ocean. 

Does anyone see a pattern here?  The American military must be the heaviest occupation force in history. According to reports, it now has 1.5 million pieces of equipment, micro to mega, to get out of Iraq as U.S. forces draw down. This is war and occupation of Guinness World Records proportions, a veritable Ripley’s Believe It Or Not of imperial military construction. The only thing that won’t make the record books, of course, is the results: in war-fighting terms, in both Afghanistan and Iraq, the world’s mightiest military has been battled to at least a draw by rag-tag, lightly armed, minority insurgencies. 

To read more about Afghanistan's base-building boom, click here.

German Geezer Gang Kidnaps Investment Advisor Who Lost Their Money

| Tue Feb. 9, 2010 1:03 PM PST

The British Daily Mail today reports on what it calls a “gang of Old Rage Pensioners” in Bavaria who are accused of kidnapping and assaulting their financial adviser because, they said, he had “taken us for a ride.”

Keep in mind that this colorful account is from a British tabloid: Terms like “torture” are there for sensational effect, the events are still under contention, and none of the geezers has yet been convicted. According to NPR’s “The World,” the old people are charged with abduction and grievous bodily harm--the latter, apparently, for injuries caused when they hit the financial advisor with their walkers.

While the senior are on trial, the financial advisor is also under investigation for fraud.

The four German seniors said they were so incensed over the losses that American-born investment specialist James Amburn incurred that they hatched the plan to kidnap him in a bid to get their cash back....

Amburn was ambushed outside his home in Speyer, west Germany, where he was bound with masking tape and bundled into the boot of a car after being hit over the head with the walking frame of one of his kidnappers.

Prosecutors charged the two married couples, aged between 60 and 79, as well as the co-conspirator, with carrying out the kidnapping in order to recoup losses amounting to £2.3 million in investments that soured due to the international financial downturn.

According to the prosecutors, kidnappers Roland Koenig, 74, and Willy Dehmer, 60, attacked Amburn outside his home and bundled him into an oversize cardboard box which they wheeled to the boot of a silver Audi saloon car.

Sri Lankan President Arrests Election Opponent, Dissolves Parliment

| Tue Feb. 9, 2010 12:59 PM PST

It's been a busy February for newly reelected Sri Lankan President Mahinda Rajapaksa: Just two weeks after defeating ex-General Sarath Fonseka in the polls on January 26th, he had his arch rival physically carted from his office and placed under arrest for sedition. Then, he dissolved Parliament. It seems no amount of pleading by the UN  or India's Manmohan Singh can get Sri Lanka to just chill out. 

Rajapaksa and Fonseka were always an odd couple: closely allied during last spring's final campaign against the separatist Tamil Tigers (LTTE), the two men fell out after the war, each accusing the other of taking sole credit for the Tigers' defeat. After trading accusations of war crimes through the summer and fall, the President "promoted" the General to a largely ceremonial position last winter. Fonseka quit, and shortly thereafter, declared his intent to unseat his rival. 

That's when things got really weird. Both Fonseka and Rajapaksa are suspected by international agencies of having committed war crimes during the spring campaign; both are open Sinhalese nationalists. Yet, with little trouble, Fonseka managed to secure the backing of a coalition of minority parties, including the Tamil National Alliance, a crucial ally. In the elections, he carried the largely Tamil provinces of the North and East, but lost the national vote by 17 points. 

Then day after the elections, rumors began to fly that the General had plotted with army officers to murder the President and his family. Fonseka's campaign headquarters were searched and several campaign workers arrested.  For the last 24 hours, the General was kept in an undisclosed location, though India's Hindustan Times is reporting that Fonseka's wife, Anoma, was allowed to see her husband for the first time today, bringing him a change of clothes and his inhaler. Many critics fear arresting the losing presidential candidate and dissolving Parliament sends the wrong message to a country that just ended a 26-year-long civil war. That's putting it mildly. 

Black History Month: What's In It For Me?

| Tue Feb. 9, 2010 10:11 AM PST

FYI: It's Black History Month, and to honor the occasion I got the scoop on proposed policies that could directly impact me—a 25-year old, African-American female with some debt and no health insurance. To find out what the government has in store, I enlisted the help of Marjorie A. Innocent and Alana Hackshaw who are directors at the Congressional Black Caucus Foundation, which recently slammed Obama for not tailoring policies to fit the needs of African-Americans.

First up is health care. Both the House and Senate health care reform bills would extend the age limit for young adults to retain insurance coverage under their parents’ plans. The House bill allows parents to cover their children until age 27; the Senate version grants coverage until age 26. Nearly one-third of young adults in their twenties lack coverage, with the rate being even higher for African-American males. Either bill would increase access to preventive health care as young Americans transition from school to the workforce—which for many is a time of financial vulnerability.

I'm familiar with financial vulnerability: I was unemployed after graduating from college, and now I'm an intern. But I'm fortunate in comparison to many college-educated African-Americans who are more likely to be unemployed than whites who have only a high school diploma. Not to mention, African American males my age who represent the highest unemployment rate in the nation. At this time, none of the administration's initiatives specifically target unemployment's disproportionate impact upon African-Americans, but the policies below may help:

  • President Obama’s proposal of the Small Business Jobs and Wages Tax Credit will provide employers with a tax credit of $5K for every new employee added to their payroll.
  • The effects of the black community's 16.5 percent unemployment rate would be blunted by the continued extension of unemployment compensation under the American Recovery and Reinvestment Act (ARRA), which is slated to expire at the end of the month.

I'm lucky to have a job, but I'm still broke, partly because I'm drowning in student loans. In his State of the Union speech last month, President Obama said he wants to provide relief to college graduates. The Income-Based Repayment (IBR) plan, which was enacted under the College Cost Reduction and Access Act of 2007, went into effect in July. It's good news for federal student loan borrowers who are experiencing financial challenges, have a high debt-to-income ratio, or are seeking a career in public service. And the administration is proposing to strengthen it by limiting loan payments to ten percent of discretionary income instead of the current 15 percent, plus forgiving unpaid balances after 20 years instead of 25. Such changes would benefit many African-American graduates who relied on federal student loans to realize their higher education goals, but it should be noted that African Americans disproportionately default on private student loans. And the IBR program doesn't touch those.

All of these proposals would signify a bit of progress, if only Black History Month could inspire Congress to pass them.

 

Follow Titania Kumeh on Twitter.

The Economist's Bizarre Health Care Claim

| Tue Feb. 9, 2010 8:20 AM PST

In an editorial in Friday's issue bemoaning American politicians' inability to tackle the budget deficit, The Economist offers this bizarre, unsupported assertion:

Health care offered a chance to [reduce government spending on social insurance programs such as Medicare and Medicaid] (broader coverage could come with tougher cost controls). But a weak administration and a greedy Congress conspired to produce a baggy monster of a bill which, from a fiscal point of view, might have made things worse.

The health care bill could have been a lot better. But if The Economist's editorial writers are going to claim that the bill "might" make the fiscal situation worse, they should offer some evidence. The Congressional Budget Office, which has been cited by both Republicans and Democrats as an impartial referee, found that both the House and the Senate health care bills would reduce the deficit over their first decade. And the Senate bill, according to the CBO's calculations, would reduce the deficit by more than a trillion dollars in its second decade. The news article that's paired with The Economist's editorial says that "many" (unspecified) analysts "doubt whether [health care reform] savings would have materialised" if reform passed, and argues that if they did, it would be "miraculous."

Economist readers would have been better served by coverage that made it clear that the CBO believes that passing health care reform will reduce the deficit. They would have been even better served if The Economist explained that America's long-term deficit problem is driven almost entirely by the rising cost of health care—not by the retirement of baby boomers or Social Security costs. As Dean Baker (an economist!) likes to remind us, "if the United States health care system were as efficient as those in other countries, the U.S. would be expecting huge budget surpluses in future decades."

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Arpaio Rebukes DOJ, Will Train 881 Deputies For Immigration Arrests

| Tue Feb. 9, 2010 5:01 AM PST

When Maricopa County Sheriff Joe Arpaio tweeted yesterday that he would announce a change on his department's enforcement of immigration laws, I knew we were in for a ride.

Fresh off a federal court victory that vindicated Arpaio's decision to force a mentally ill inmate, Eric Vogel, to wear pink underwear under his striped jail uniform, Arpaio's office announced that the Sheriff, who became a hero of the right for cracking down on illegal immigration in Hispanic neighborhoods, will train all 881 Maricopa County Sheriff's deputies to make immigration arrests.

This is a sharp rebuke to the federal government, which stripped 100 of Arpaio's deputies of the right to make immigration arrests in the field last October. At the time, Arpaio vowed to continue his policies regardless of the Justice Department's instructions. Yesterday's announcement shows that Arpaio still means business.

Arpaio supporters claim that his tactics preserve states' rights as guaranteed by the Constitution. But critics say that this is merely an excuse for the Sheriff to implement an anti-immigration agenda that is fueled by racial profiling. "Sheriff Arpaio is a demagogue, and his use of immigration as a pretext to gain notoriety is old news, " said Chris Newman of the National Day Laborer Organizing Network.

"Good for Joe Arpaio!" says former Sheriff Richard Mack, who now runs the No Sheriff Left Behind campaign urging local Sheriffs to disobey unjust federal orders. "The Sheriffs of this country have an obligation to uphold the law and protect the citizens from illegal immigration. And when the feds don't do their job, it leaves it to us to clean up the situation."

Mortgage Shark Attack

| Tue Feb. 9, 2010 4:20 AM PST

The economic meltdown has been rife with villains, from corporate execs who turned their TARP payouts into multimillion dollar paydays, to corrupt politicians who favored Corporate America for their own financial gain.

Another group for the scoundrel list? Loan servicers, the mortgage middlemen who literally cheat Americans out of house and home because (you guessed it) it lines their pockets. While fact-checking a story about these sharks, I rifled through a thousand legal complaints against the nation's ten largest mortgage servicers, and spoke with homeowners who have been cheated out of thousands of dollars—all while fearing they may literally be kicked to the curb.

Last year, as the problem worsened, Obama established the Home Affordable Modification Program to try to get servicers to negotiate with homeowners to keep their homes. But after months, the program has not done nearly enough to prevent predatory servicing or skyrocketing foreclosure rates.

In her testimony (pdf) to Congress last year, attorney and mortgage expert Diane Thompson called the epidemic a "foreclosure tsunami." And with little to suggest a systemic change, it doesn't look like it will stop raging anytime soon.

Read the full story here.

See a list of subprime lenders who are reaping the benefits of HAMP here.

And click here for a list of resources to help homeowners deal with mortgage hell.

The Drone Wars

| Mon Feb. 8, 2010 12:48 PM PST

Almost every day, reports come back from the CIA’s "secret" battlefield in the Pakistani tribal borderlands. Unmanned Aerial Vehicles—that is, pilot-less drones—shoot missiles (18 of them in a single attack on a tiny village last week) or drop bombs and then the news comes in: a certain number of al-Qaeda or Taliban leaders or suspected Arab or Uzbek or Afghan "militants" have died. The numbers are often remarkably precise. Sometimes they are attributed to U.S. sources, sometimes to the Pakistanis; sometimes, it’s hard to tell where the information comes from. In the Pakistani press, on the other hand, the numbers that come back are usually of civilian dead. They, too, tend to be precise.

Don’t let that precision fool you. Here’s the reality: There are no reporters on the ground and none of these figures can be taken as accurate. Let’s just consider the CIA side of things. Any information that comes from American sources (i.e. the CIA) has to be looked at with great wariness. As a start, the CIA’s history is one of deception. There’s no reason to take anything its sources say at face value. They will report just what they think it’s in their interest to report—and the ongoing "success" of their drone strikes is distinctly in their interest. 

Then, there’s history. In the present drone wars, as in the CIA’s bloody Phoenix Program in the Vietnam era, the Agency’s operatives, working in distinctly alien terrain, must rely on local sources (or possibly official Pakistani ones) for targeting intelligence. In Vietnam in the 1960s, the Agency’s Phoenix Program—reportedly responsible for the assassination of 20,000 Vietnamese—became, according to historian Marilyn Young, "an extortionist’s paradise, with payoffs as available for denunciation as for protection." Once again, the CIA is reportedly passing out bags of money and anyone on the ground with a grudge, or the desire to eliminate an enemy, or simply the desire to make some of that money can undoubtedly feed information into the system, watch the drones do their damnedest, and then report back that more "terrorists" are dead. Just assume that at least some of those "militants" dying in Pakistan, and possibly many of them, aren’t who the CIA hopes they are.

Think of it as a foolproof situation, with an emphasis on the "fool." And then keep in mind that, in December, the CIA’s local brain trust, undoubtedly the same people who were leaking precise news of "successes" in Pakistan, mistook a jihadist double agent from Jordan for an agent of theirs, gathered at an Agency base in Khost, Afghanistan, and let him wipe them out with a suicide bomb. Seven CIA operatives died, including the base chief. This should give us a grim clue as to the accuracy of the CIA’s insights into what’s happening on the ground in Pakistan, or into the real effects of their 24/7 robotic assassination program. 

But there’s a deeper, more dangerous level of deception in Washington’s widening war in the region: self-deception. The CIA drone program, which the Agency’s Director Leon Panetta has called "the only game in town" when it comes to dismantling al-Qaeda, is just symptomatic of such self-deception. While the CIA and the U.S. military have been expending enormous effort studying the Afghan and Pakistani situations and consulting experts, and while the White House has conducted an extensive series of seminars-cum-policy-debates on both countries, you can count on one thing: none of them have spent significant time studying or thinking about us. 

As a result, the seeming cleanliness and effectiveness of the drone-war solution undoubtedly only reinforces a sense in Washington that the world’s last great military power can still control this war—that it can organize, order, prod, wheedle, and bribe both the Afghans and Pakistanis into doing what’s best, and if that doesn’t work, simply continue raining down the missiles and bombs. Beware Washington’s deep-seated belief that it controls events; that it is, however precariously, in the saddle; that, as Afghan War commander General Stanley McChrystal recently put it, there is a "corner" to "turn" out there, even if we haven’t quite turned it yet. 

In fact, Washington is not in the saddle and that corner, if there, if turned, will have its own unpleasant surprises. Washington is, in this sense, as oblivious as those CIA operatives were as they waited for "their" Jordanian agent to give them supposedly vital information on the al-Qaeda leadership in the Pakistani tribal areas. Like their drones, the Americans in charge of this war are desperately far from the ground, and they don’t even seem to know it.

It’s time for Washington to examine not what we know about them, but what we don’t know about ourselves.

Read more about drone attacks in Pratap Chatterjee's "Destabilizing Pakistan."

Dumbest Quote of the Day

| Mon Feb. 8, 2010 11:22 AM PST

And the winner is Michael Steele, the GOP chaiman. From an AP report on a debate between Steele and Harold Ford Jr., a former Democratic House member, at the University of Arkansas at Little Rock:

"Trust me, after taxes, a million dollars is not a lot of money," Steele said.

Yes, he said after taxes. (Steele was attacking President Barack Obama's plan to let George W. Bush's tax cuts for the wealthy expire.) So is the Democratic attack ad finished yet? Such a spot could be used in every congressional district of the nation. This quote was first reported last week, but Dems are pushing it out today. In oppo research, this is what they call a "keeper."

You can follow David Corn's postings and media appearances via Twitter.

 

 


Photo Essays

The chaos and humanity of war.
The craftspeople and musicians of Appalachia.
A selection of '70s ads depicting African-Americans.
As climate change melts the permafrost, native villages slip into the sea, taking a way of life with them.