Bankhugger Defined

Bankhugger – noun – a politician supporting the bailing out of banks, while indulging the same banks’ resistance to regulation and looking the other way while those same banks pay out lavish salaries and bonuses to executives. The phrase “bankhugger” is slang, derived from the label “treehugger” applied to environmentalists accused of sacrificing common sense and the common good to preserve the environment. E.g. “That bankhugger Geithner can’t stop doling out cash to undeserving financial institutions.” –adverb- bankhugging – engaging in the bailing out of banks, while indulging the same banks’ resistance to regulation and looking the other way while those same banks pay out lavish salaries and bonuses to executives. E.g. “If Obama doesn’t quit bankhugging, the Democrats will lose more than just Ted Kennedy’s seat.”

It Hasn't Happened and It Blows Me Away

Obviously, President Obama's election has brought a lot of conversation about race into the mainstream. What no one is discussing is the lack of overt racist harassment or protest over the President's race.

It still amazes me that not once NOT ONCE during the campaign did we hear about someone leaning over the ropeline and calling Mr. Obama ANY type of racial epithet. As he and Michelle walked proudly through DC on that glorious November morning, I thought, this must be the moment. Surely some racist prick or white supremacist has driven a 1000 miles and camped out all night to be the first one to publicly call the President a nigger, loud enough for the sound booms to pick it up. Didn't happen.

Not once, not during the primary, not on the night in Denver when he took the stage to accept the nomination, not on election night, or not at any time since, has a group staged a public protest over the President's race ANYWHERE in the world, or burned a cross OR EVEN JUST unfurled a banner on a bridge or along a highway past which would pass Mr. Obama's motorcade.

We were all worried about him getting shot. I just took it for granted that someone would try to ruin any of these moments with hate speech.

Think about it, the incentive is high. If you were the first white supremacist to call the President a nigger, your face would be everywhere. In your own sick little world, you would be an international superstar. You have to assume, from a white supremacist fundraising or membership drive standpoint, the constant tape of such an incident playing on CNN, Fox and Youtube would be a PR coup. There's every incentive in the world for the kind of scumbag that carries on like that to show up and call the President some name. It wouldn't cost anything, hell it wouldn't even be a crime. For uttering one word, you could be a household name.

Some may think that perhaps it has occurred, and the press didn't report it. Are you kidding me? The press doesn't have a liberal or conservative bias. The press has a salacious muck-based bias. They would eat that up. Every talking head on the 24 hour news carousel would ignore the recession and run with it. They are probably all sitting at home wondering why it hasn't happened and wishing it would. The economic crisis is complicated and hard to report. That would be simple, exciting and almost as good as Monica what's-her-name.

Others may thing that perhaps the racists are afraid of being killed or hurt as a result. Are you kidding me more? Those gun-crazy freaks will just retreat to the compound and hope for a Waco/Gary Weaver style confrontation with the FBI. They don't think liberals are scary anyway.

Now the President is promoting huge, game-changing legislation and changing the direction of the country. Even enmeshed in controversy, no one is calling him names. The President's policy and performance are being judged SOLELY ON THE MERITS AND RESULTS.

Frankly, when that whole chimp cartoon

http://www.reuters.com/article/politicsNews/idUSTRE51H7N420090218

drew fire, I had to admit I was stunned. So far, this cartoon, which can be taken as racially insensitive and certainly bad judgment, so far, THAT'S ALL WE'VE HAD. And Rupert Murdoch apologized for it twice.

Then there's "Barack the Magic Negro" given fame when Chip Saltsman, candidate for RNC chairman made copies and sent them out to RNC members. The words of the song are definitely racist, attempting to conjure up white fear of blacks like the nefarious Snoop-Dogg, but in the end essentially exhort the listener not to vote for Barack Obama BECAUSE he is black.

Admittedly, you can find racist talk on the internet if you search for and go deep into the search. But you can find anything on the internet. It hasn't happened in public. That we know of, it hasn't happened to the President's face.

I don't know why it hasn't happened. Maybe we were more prepared for this than we thought. Hopefully this restraint continues even when his ratings plummet into the 30s.

End The Housing Crisis with These Changes

Let me preface this by saying that I get into a lengthy explanation of collateralized debt obligations and commercial paper and some arcane points of bankruptcy law and I wouldn't blame you if you simply noted my righteous indignation at this point and just went back to your email.

Currently, we are trying many, many "bank-centered" ways of fixing the housing crisis. No one disputes that the price of houses in the US are in free-fall. There is a much simpler, quicker way to let home values and mortgages reach their point of equilibrium so we can begin the climb out. We must temporarily adjust the rights of homeowners in bankruptcy.

First, a quick primer on this impenetrable topic.

For at least the last decade, when most people in America got a mortgage on their home, that mortgage is bundled up with other mortgages, and sold. That bundling is called "securitization" and the resulting bundle of mortgages is called a "bond" or a "collateralized debt obligation" (CDO). Big companies and investors buy those CDOs. They pay a price to receive a certain rate of return on their investment. They buy the right to receive mortgage payments from average Americans, setting the price they pay based on the payments and interest rate they will receive. They also set the price based on the idea that not only are they getting the right to receive mortgage payments, but they are also getting a piece of collateral for the obligation - the home of an American family.

Now, what is causing the problem in these CDOs is, for the most part, NOT the failure of people to pay their mortgage. Yes, we hear a lot about foreclosures and people losing their homes. I am not minimizing this issue, but here is the point: Of the 45 million mortgages in the US, 10% are more than 30 days late or are in foreclosure. What is causing the most of the problem for banks is two other issues:

1) The value of the collateral for the obligation - the home - is difficult to know. Most houses have lost value in the last year. This means the value of the mortgages held by these banks has gone down, so the banks must reduce the amount of value they put on their balance sheets. This triggers a requirement that they reduce the amount of cash they have to lend, and increases the amount they must hold in reserve as defaults become more likely (discouraged debtors are more likely to walk away from homes that are under water).

2) The process for resolving defaults creates uncertainty as to valuation of the CDOs, and is creating logjams in how to resolve defaults. It seems simple to the outsider - homeowner can't make payments at the old amount, bank will lose more money if the house goes into foreclosure and stands empty - why not make a deal for a reduced payment amount? That seems logical.

Part of the root of both of the previous problems is the nature of corporations. The person on the phone, talking to the homeowner, or the person in accounting, trying to assess the value of the house that is collateral for the CDO, have to defend their decisions about reduced payments to receive or reduced values to put down. This requires them to EXERCISE JUDGMENT in a corporate environment. It is so much easier for these people to make no decision at all, to let the problem fester, and wait until they can simply say "It was out of my hands, it went into foreclosure."

The other part of the root of the above-described problems is the nature of securitization. These CDOs were originated by one bank (the originator), and sold to another (the investor). Then another bank bought the right to collect the money and distribute it (the servicer). The person on the phone works for the servicer. These CDOs are so intertwined that the servicer might not know who the investor is - the rights get sold over and over. The investor might not know if they own a specific loan or not. Add to that, a lot of these originators and investors bought insurance that is payable in the event of a default. Which company insures which bundle of loans?

What each of these parties knows, is that if anyone makes a decision to take a loss - the servicer, the investor or the insurer - the others are going to sue that party for making the decision. The insurer will try to say that the servicer mishandled the loan, and the insurance isn't collectible. Then the investor sues the servicer and the insurer. Or the investor sues a previous investor for selling them the bad bundle of CDOs in the first place. And so on.

Add to all that the confusion created by the fact that these CDOs are a mess. Millions of pieces of paper per CDO (all that stuff you sign at closing). Originators have gone out of business. The paper has changed hands multiple times. Servicers are going out of business. No one can keep track of who owns what, and where.

So the companies have a disincentive to make a decision. Make a decision to take a loss, and you will get sued. The people at the companies have a disincentive to make a decision. Not only is making tough decisions not rewarded in business, but here, specifically, if you make a decision to take a loss, you will be responsible for the company getting sued.

The only way to fix this is to take the decision out of these people's and companies' hands. Currently, in bankruptcy, a debtor cannot have a banktuptcy judge change the terms of their residential mortgage. That's an exception, other kinds of secured debt can be changed in bankruptcy. Debt secured by other kinds of property can be reduced to equal the new value of the collateral, and the payment can be changed to reflect the new reality of the debtor's cash flow. There's a certain amount of flexibility. Payments can be eliminated for now, and ramped up later. The debt can be reduced so that the asset can be sold. The leftover debt is treated as unsecured and a portion can be paid back over time, or discharged as part of the bankruptcy.

The objection to making this change has always been that if you make it so residential mortgage debt can be changed this way, then making the loans will be more risky, risk equals more price, and everyone's home loans will be more expensive.

That's compelling, so let's not do that. Instead, let's identify a period of years, say 2005 to 2007. If your loan was originated during that time, you have the right to adjust the loan in bankruptcy. You can write the loan down to the current value of the house, change the payment terms to reflect the reality of yoru situation at home. We can broaden that period if need be, or tighten itup. The idea is that we will identify all the so-called "toxic assets" and allow a bankruptcy court to adjust them on an as-needed basis. We give people the right to do this for the next 36 months. Or 24, or whatever we think works.

This will solve several problems. Banks can stop guessing at write-downs - either the loan has been written down or it hasn't. The originator, servicer, investor and insurer can stop jockeying for position to sue each other based upon a decision to take loss, as all the decision making takes place within the already established confines of the bankruptcy court. The person on the phone at the bank that doesn't want to make a decision doesn't have to - they can just throw up their hands and say "It went into bankruptcy, it was out of my hands." This allows things to get fixed without people in organizations having to take direct responsibility for making decisions. It is the only way out.

Some may argue that bankruptcy causes a blemish on people's records, making their credit bad for 10 years. Fine, we can pass a law that it can't for this set of extenuating circumstances.

To those that complain that this will cause banks to have to take losses and the government will have to bail out those losses and that this is will be expensive, I say wake up, we are already doing that. We're already giving the banks billions to reward them for this risk-taking. The difference between this plan and what we're currently doing is that in my plan the market will reach equilibrium faster, we'll deal with bad loans faster and we'll help actual American taxpayers stay in their homes.

This is extreme and not ideal, but I am not hearing anything better coming along. And I'm an attorney that just signed myself up to file personal bankruptcies for people.

If they did this, then we could all believe that the bailout is really about regular Americans, and not about bailing out Hank Paulson's banking buddies from over on the Street.

Joe Biden Redeem Yourself

Joe Biden is currently being marginalized by the Obama Administration. I can't help but wonder if it is because they are concerned that he doesn't really share their values. (Or that he'll open his mouth). Joe Biden, you need to prove that you really and truly care about average working people. Take steps NOW to undo the damage you did to the rights of average working people everywhere. Rollback the mean-spirited, cumbersome and expensive "reforms" to the Bankruptcy Code that you helped put in place in 2005. Help people that are suffering get a fresh start, and take back the giveaways to credit card issuers. As Vice President-elect, and as a former proponent of these changes, no one is better positioned than you to lead the charge.

In 2005, the purported representatives of this country passed the Bankruptcy Abuse Prevention and Consumer Protection Act. The financial wing of the corporate oligarchy that actually runs this country lobbied hard for this change. It made it harder to discharge one’s debts, made it harder for businesses to reorganize, and much, much easier, for credit card companies located in Delaware to collect money from consumers, and to sell bundles of debt to investors, domestic and foreign. The stated benefit was that money would be cheaper for all of us “responsible” citizens and this would promote “personal responsibility.” And interest rates would of course go down. No doubt anyone looking at a credit card statement since passage of the bill is shocked at how low their rate is now.

As a bankruptcy attorney, my anecdotal experience, and one borne out by COUNTLESS reputable studies and opinions is that people struggle to avoid filing bankruptcy. People want to pay their debts back. But people get hurt, and run up medical bills and can’t work or lose their jobs and get behind despite their best efforts, and they sit, all grown up in my office and cry because they’ve let “everyone” down.

Or they get unlucky. Like Joe Biden’s dad, a businessman that went from playing polo to selling pennants at fairs.

Joe Biden, a Democrat with blue collar roots SPEARHEADED the insultingly titled Bankruptcy Abuse Prevention and Consumer Protection Act. MBNA, the credit card issuer from Delaware enlisted Senator Biden’s eager assistance with pulling the wool over the eyes of American citizens. Actually stood on the Senate floor and gave speeches about how this bill helped average Americans, and combated the deadbeat dad problem. Joe Biden is perhaps the best example of how the government no longer represents the people. Joe Biden was the only Democratic Presidential candidate that voted for that thing. Joe Biden’s 38-year-old son has received “consulting” payments from Bank of America (purchased MBNA) for his assistance with they-aren't saying.

(Paul Wellstone, the Minnesota senator who heroically and single-handedly filibustered this monstrosity, is now dead after an airplane “accident.")

Joe, the only other thing you could do to help keep people out of bankruptcy is fix health care, and they aren't going to let you anywhere near that.

President Obama To Be Unfairly Yet Inevitably Tarred With Next Crisis

Why, O WHY does this America’s first black president have to get saddled with the next bubble burst?

As you know, our next president will be Barack Obama, who is, among other things, part black. Since he’s super-charismatic and smooth, and he’s got super-great ideas, he will of course be president for 8 years. (With Vice President Winfrey serving at least a term after that).

This is like when Herbert Hoover beat Al Smith in 1928. Al Smith, the first Catholic with a shot at being president, didn’t beat Hoover. When the stock market crashed, Catholics everywhere breathed a huge sigh of relief. If Smith had won, they figured, Catholics would have been blamed for the crash and the Great Depression.

Other presidents are associated with the cataclysmic events that took place during their tenure as president. Jimmy Carter is known for the hostage crisis and the gas crisis. George W. Bush will forever be associated with the events of 9/11. And the tortures inflicted by him on the English sentence. Gerald Ford is associated with the bumping of one’s head. Is that fair? No - lots of people bump their heads, but that’s what they remember him for.

Now, was the depression Hoover’s fault? Maybe, maybe not. The hostage crisis Jimmy Carter’s fault? Maybe, maybe not. At least they had the chance to fix it. At least government had the tools to fix those problems. They may have failed, but they controlled their own destiny. Given the nature of the next crisis, President Obama won’t have that chance. The forces of change that are swirling are totally beyond his, or any government’s control. It ain’t gonna be pretty, it ain’t gonna be his fault, but he’s gonna get stuck with it, and it’s going to suck.

I’m talking of course about the coming cataclysmic shift in men’s shorts. After years of dropping, dropping and dropping, men’s shorts, have become, well, pants. The pendulum is about to lurch back, to a time that was not so easy on the eyes.

Pictured here are a typical pair of men’s shorts in 2008. Much like tapered leg jeans ballooned into bell bottom jeans (we all swore an oath in the 80s we’d never wear them) the shorts will soon snap back to the shorts of the 1980s. It’s been over twenty years. Change is coming like a runaway freight train. Pale hairy men’s thighs. Coming soon to a city street in your community.

Think I’m joking? Here’s Larry and Magic “hanging out.” American icons. Back then these shorts WEREN’T WRONG AT ALL. These guys were COOL. Kids wanted to BE LIKE THEM.

Nobody wanted to be like McEnroe, but my point is look at those freakin' shorts.

Look at the future. Lemmy of Motorhead, the British chain-smoking Ace of Spades, shows you the horror and shame with which President Obama will be saddled.

Why? Sometimes life isn’t fair.

These men are "actors" playing homosexuals in a movie with a plot that required rubber gloves. Not the detail to focus on. The point of this photo is to show what’s going on “out there.” The gay community is getting out front on the shorts thing. Denim. Short. Lots of man leg. This is going to spill over and taint Nancy Pelosi’s reign as first woman Speaker of the House. I could just cry.

Here’s some asshole wearing “modest” short shorts.

This is as good as it will get for President Obama.

What fresh hell is this? I can just hear Dick Cheney laughing at the Democrats. Mocking. Luxuriating in Bermuda shorts or clam diggers. Shooting stuff.

Secretary of Education?

In summary, the life of a public servant is a harsh one. Life is harsh. But it is tragic and unfair that our first black president will be forever associated with god-awful men’s short-shorts. In the face of this crisis, we must all hope that President Obama resists the temptation to invade Iran just to distract the American people and historians everywhere from the unsightly spectacle of men’s upper thighs.

Ralph Nader, It's Time to Man Up and Stop Whining

Ralph Nader recently sat for an interview in the Wall Street Journal Weekend edition, May 31, 2008, by Tunku Varadarajan. I'd link it, but the WSJ is a pay site.

Let me first say that I think Ralph Nader has been a great American. Every society needs people standing on the fringes, hurling Molotov cocktails at the establishment, and letting those in power know they are there, and are watching. Nader went one step further. Rather than sit at his dining room table and type some lame blog, Nader went out and railed for change, and created change.

Nader of course ran for President in 2000 as the Green Party' nominee, ran again on his own in 2004 and is running again in 2008. In each of those runs, Nader has presented a lot of great positions, many of which, if adopted as policy, would make the world a better place. I'm glad that someone like Nader is pushing the envelope, and hopefully people will take a look at some of the things he's saying.

But here's the thing, and the reason I am writing: in the interview, Nader complains about being saddled with Al Gore's failure to be sworn in as President. He correctly points out that if Gore had carried Tennessee or performed more ably in Florida, the Green party would not have been a factor. I'll go farther and say that if Gore had been truer to himself, not run so distantly from Clinton, not chosen Lieberman as a running mate, he would have won. Coming off the eight years of prosperity of the Clinton years, the race should not have even been close.

But Ralph, in addition to all of those things, your candidacy caused the result. Yes, all of those things above are true were factors and these: Katherine Harris, Jeb Bush, five Republican Supreme Court justices, all of that. But so too, was your candidacy. It's time for you to pull up your socks and take a cold hard look at the fact that you took votes from Gore, causing, along with MYRIAD failures by the Democrats and aggressive manipulation by the Republicans, George W. Bush to become President. Despite everything else you have stood for all these years, and despite all the good intentions you may have had, your legacy will be, in part, that you participated in electing Bush and were a precipitating cause for Iraq, the Katrina response, No Child Left Behind, the Patriot Act, Cheney, Rumsfeld, Gonzalez, Alito, Roberts, etc.

Why not just be a man and own it? Rather than whining about how Laurence Tribe blames you for the 2000 election and sniveling about all the reasons why it was everyone else's fault and not yours, why not just say it? "Yes, I took votes from Al Gore. I ran a third party campaign on the left, and that's what third-party campaigns typically do. They take votes away on the far right or far left, with the hope of pulling the political discourse in their direction." Would that be so hard? I don't know if you feel this way but you could even go on to say that "I regret that George W. Bush became President, but I still believe in the platform and the message and I think getting those things out was important."

And Ralph, you could certainly go on to point out that "It sure as HELL wasn't my fault he got elected the second time." No one could blame you for pointing that out.

I just can't take it anymore. I can't listen to Ralph Nader whine about how this wasn't his fault. It of course was not entirely his fault. But Ralph, we EXPECTED the Republicans to do all the things that they did, so stop being surprised that liberals are more hurt and angry by your role.

For more from Ralph see www.VoteNader.org.