UPDATE II: “Financial” Paperwork Crisis (No Conspiracy Thinking, Please)

Business, Conspiracy, Debt, Economy, Federal Reserve Bank, Reason, Socialism

As I read the facts, the latest foreclosure crisis is bureaucratic in nature, not economic. Described by The Wall Street Journal, “the wrong guy at the bank signed the foreclosure paperwork. … The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front.”

The reality has not changed. We’re still talking about the same “consumer who borrow[ed] money to buy a house, [didn’t] make the mortgage payments, and then [lost] the house in foreclosure.”

Except that now 100,000 people get to keep homes for which they haven’t paid. Because bureaucracy runs the economy, the process of cleansing the housing market of these toxic acquisitions will be halted and gummed up even more so than before.

A major culprit is “GMAC Mortgage, whose parent Ally Financial is majority-owned by the U.S. government.”

Well, of course.

Every parasitical official seeking to renew or secure his sinecure on the public teat is demanding a halt to what looks to have been perfectly legitimate foreclosures on delinquent homeowners: state attorneys general, the Attorney General (Eric Holder), and assorted politicians, all interfering in local state affairs.

As the WSJ notes (rather meekly), “freezing activity in a $2.8 trillion financial market is the last thing this economy needs and is in no way proportional to the problems reported so far.”

The WSJ concludes on a stronger note:

“If evidence emerges of policies or actions that wrongly threw people out of their homes, by all means investigate and prosecute violations of law. But allowing people to live in homes without paying for them is not cost-free. That cost will be borne directly by investors in mortgage-backed securities and mortgage servicing companies, and ultimately by American taxpayers, who now stand behind 90% of new mortgages, thanks to guarantees by Fannie Mae, Freddie Mac and the Federal Housing Administration.

The bigger damage here is to the housing market, which desperately needs to find a bottom by clearing excess inventory and working through foreclosures as rapidly as possible. The moratoriums further politicize the housing market and further delay a housing recovery. In an economy and a financial system engulfed in Washington-created uncertainty, the political class has decided to create still more.”

Justice in the food-stamps nation …

UPDATE I (Oct. 11): It is clear that the above constitute “technicalities, not miscarriages of justice.” In “A Foreclosure Tightrope for Democrats,” the NYT suggests that the “White House shares those concerns, and it has tried to defuse the issue by arguing that problems can be addressed without imposing a moratorium.”

“‘There are, in fact, valid foreclosures that probably should go forward,’ David Axelrod, a senior White House adviser, said Sunday on CBS.”

The industry has argued in response that problems should be addressed without halting all foreclosures, because a moratorium would damage the economy. “It must be recognized that the mortgage market, investors and the health of the economy are all interrelated,” Tim Ryan, president of the Securities Industry and Financial Markets Association, said Monday.

Is the prospect of an election forcing some economic enlightenment at the White House?

UPDATE II (Oct. 12): It must be obvious to readers of this site that I would strongly disagree with the case my colleague Vox Day makes against the strict rule of law and for grand-conspiracy:

The idea that the foreclosure fraud is simply a little clerical error and that homeowners are attempting to capitalize on a minor issue of missing paperwork is a blatant and shameless lie. The mere fact of their focus on the borrowing parties rather than the banks is proof that they are intentionally evading the real issue. Karl Denninger, who has been on this for three years now, explains it more succinctly than anyone. “The issue is not about which paper-pusher signed documents. The issue is whether the origination and securitization of this paper in the first instance was fraudulent, and whether we now we have a Watergate-style coverup of what a gang of brigands did to steal literal trillions of dollars!” As he further elucidates, there are three primary parts to the problem; notice that the latter two have absolutely nothing to do with the borrowers that the Republican Cantor declares must “take responsibility for themselves”. But if a poor Hispanic family living in an overpriced house have to take responsibility for themselves, why don’t the bankers who are holding Cantor’s leash have to do likewise?

Similar opinions were expressed on BAB when we discussed “Strategic Defaulters.” There, John Danforth wrote:

What caused the drop in nominal property value? The inevitable collapse of prices that were superheated by banks puffing up fractional reserves with derivatives of the superheated asset prices. …No matter how debased the morality of the strategic defaulters, the banks are not any better.

Distilled, the argument for all-out sweetness and love for the foreclosed upon is that, because the banks are embroiled in the fractional reserve system, they should suffer the worst of fates.

That’s like saying that because the legal system is generally corrupt, murderers should go free; or because an owner who sells a parcel of land partakes in the property tax theft, the buyer should not have to pay him. Or because businesses often act like exuberant idiots during a phase of the business cycle—some as offenders; others as victims—their customers need not pay them. And on and on.

This is chaos theory; create chaos, and out of it, something good may come. And never mind that not all bankers are crooks; that not all of them understand the theoretical aspects of the system in which they are embroiled; and that not nearly enough bad things are said about the defaulters.

As to Vox’s point, it does not follow from “the mere fact of their focus on the borrowing parties rather than the banks,” that this “is proof that they are intentionally evading the real issue.”

Not in logic, at least.

Finally, the laws of economics are natural laws. Whoever is involved, it is categorically good that responsible buyers get to pick up foreclosed properties, and that the mortgage miasma is cleared and cleansed away.

The John (Eliot Spitzer) & The Mindless Schoolmarm (Kathleen Parker)

Celebrity, History, Media, The State, The Zeitgeist

We can all agree that Eliot Spitzer did his most ethical work as a John, between the sheets with the hooker with whom he was caught. Before that he was a politician who persecuted the productive class.

“Parker Spitzer,” CNN’s new current-events program, is easily the most repulsive thing on TV. More so than “Keeping Up With The Kardashians.”

I’d never have guessed, though, that I’d prefer Spitzer’s open statism to Kathleen Parker’s coy conformity. The New York Times stated that “Ms. Parker does not bring to CNN Mr. Spitzer’s propensity for controversy.” That’s an understatement.

Parker, we are told, is a Pulitzer prize winner. That tells me as much about that journalistic honor than Obama’s peace prize tells me about the Nobel Prize. Not only does this woman, Parker, not express a thought in opposition to her partner’s; she doesn’t express a thought.

Today the creepy couple entertained the king of Keynesians, economist Paul Krugman. Both offered plaudits to his predictive brilliance. Neither one challenged his warped history and economics. Yesterday it was the gorgeous model and ditz Paulina, and the French philosopher Bernard-Henri Lévy. Both called the tea partiers a savages. Nobody was smart enough to point out the differences between the Revolution in France, as Edmund Burke referred to this barbaric turning point in history, and the American Revolution.

Parker is a wound-up, tight-lipped, prissy schoolmarm—which is not a bad thing at all. I like prim and proper. It’s the dumb statist that I don’t much dig.

“Parker Spitzer” is self-congratulatory, pompous Beltway banter.

It needs to fail.

The John (Eliot Spitzer) & The Mindless Schoolmarm (Kathleen Parker)

Celebrity, Economy, History, Media, The State, The Zeitgeist

We can all agree that Eliot Spitzer did his most ethical work as a John, between the sheets with the hooker with whom he was caught. Before that he was a politician who persecuted the productive class.

“Parker Spitzer,” CNN’s new current-events program, is easily the most repulsive thing on TV. More so than “Keeping Up With The Kardashians.”

I’d never have guessed, though, that I’d prefer Spitzer’s open statism to Kathleen Parker’s coy conformity. The New York Times stated that “Ms. Parker does not bring to CNN Mr. Spitzer’s propensity for controversy.” That’s an understatement.

Parker, we are told, is a Pulitzer prize winner. That tells me as much about that journalistic honor than Obama’s peace prize tells me about the Nobel Prize. Not only does this woman, Parker, not express a thought in opposition to her partner’s; she doesn’t express a thought.

Today the creepy couple entertained the king of Keynesians, economist Paul Krugman. Both offered plaudits to his predictive brilliance. Neither one challenged his warped history and economics. Yesterday it was the gorgeous model and ditz Paulina, and the French philosopher Bernard-Henri Lévy. Both called the tea partiers savages. Nobody was smart enough to point out the differences between the Revolution in France, as Edmund Burke referred to this barbaric turning point in history, and the American Revolution.

Parker is a wound-up, tight-lipped, prissy schoolmarm—which is not a bad thing at all. I like prim and proper. It’s the dumb statist that I don’t much dig.

“Parker Spitzer” is self-congratulatory, pompous Beltway banter.

It needs to fail.

Picnic Time For Teddy Bears

Environmentalism & Animal Rights, Ethics, Left-Liberalism And Progressivisim, Propaganda

The following is from my new WND column, “Picnic Time For Teddy Bears”:

“A man from my neck of the woods was mauled by a bear. A politician, to be more accurate. John Chelminiak, who is alive but disfigured for life, is a Bellevue City Councilman. Bellevue is a wealthy suburb of Seattle. When he was attacked, the councilman was at his ‘vacation cabin’ at Lake Wenatchee, in central Washington.

Chelminiak described the sounds of his cranium cracking as the black bear chomped down on it. Bears eat their prey alive. At least Chelminiak spared us the familiar, ‘No one knows why she attacked.’ ‘Bears rarely attack human beings.’ Or, ‘Before taking ‘measures’ against him, the bear community had issued fair warning about the Timothy Treadwell nuisance factor.’

Before he was gobbled up by an Alaskan brown bear, Treadwell had been pursuing a career as a bear whisperer. He had Hollywood ambitions too. Treadwell spent 13 seasons in the Alaskan Katmai National Park. There he whiled the days away filming himself crawling around with grizzlies. His bleach-blond locks were always carefully coiffed for the camera, or covered with a bandana. The brown bears seemed indifferent to Treadwell’s cooing and clucking routine.

Unbeknown to Timothy, who was usually able to read the minds of bears, one, not-so little teddy had made a mental note to himself: ‘if the porridge pickings are slim, come winter, come back for Goldie Locks.’ And that’s precisely what Ursus Arctos Horribilis did. For good measure, the bear consumed Timothy’s girlfriend, who had come to the park to break-up with bear boy.” …

The complete column, now on WND.COM, is “Picnic Time For Teddy Bears.”

Read my libertarian manifesto, Broad Sides: One Woman’s Clash With A Corrupt Society.

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