Establishment Republicans "Pale-in" Comparison to True Conservatives, Cont.

A reader writes:

I don't know what I was thinking, but last Thursday evening I attended an event hosted by our homeowners association featuring Chuck Devore. He said the Republican Party was backing Carly, not him. While he was charming, intelligent and articulate, I found myself glued to my chair with my hands in my lap as everyone else in the room broke out into standing ovations all evening. Although I found his views frightening, it was the positive reaction from the crowd that scared me most. All in all, I'm glad I went, because I think it's good to see a different perspective now and again.

Ah, the charms of Orange County, CA. As I'm a died-in-the-wool progressive (life-long), I would never have the stomach for an event like that. The scariest part, as this reader wrote, was witnessing the collection of radical right-wing conservatives all in one place, feeding off each other and raising the roof with their fringe ideology. And to think that these people are all around us, serving us coffee, examining our children, repairing our leaky faucets, investing our retirement funds, sitting on our school boards, etc.

It's why this wing of American politics is so dangerous and why it must be exposed as a fraud, and its followers stopped at every turn.

The Dark Side of Mortgage Lending

This HuffPost article about a Virginia couple who got roped into an unaffordable mortgage just makes my stomach churn. So much of what this article describes could have been avoided if people had just used their brains. If you want to read it as a cautionary tale against entering into financial deals you don't understand, it's compelling.

Lenders have, for years, made loans to borrowers who were not asked to verify the income that they stated on their applications. At one time, these loans made sense. There are numerous borrowers who have very complicated income stories that tax returns and W-2s do not adequately explain. I am working with someone who is like that today. He is an international investor and manages a hedge fund. His income is well sheltered and accounting practices allow him to report only a minimum amount of income as capital gains. Most lenders do not have the sophistication to analyze tax returns to the point where they understand capital gains, and many of them simply exclude such income. And yet, he regularly carries five figure debts on his American Express card, has a car loan and rented an expensive apartment near the beach. Someone with his lifestyle is either a crook living off of other people's money or really makes that money. Two plus years ago, he would have been a perfect candidate for a "Stated Income" loan. If he had very good credit, and was putting down enough on the purchase or had enough equity for the refinance, it would make sense to grant that loan.

The problem is that those who originated those loans figured out quickly that, if lenders aren't going to bother with verifying income, they could put whatever they wanted on the application so long as the amount resulted in an adequate ratio of debt to income. Therefore, you saw lots of teachers or police officers (or janitors, or ditchdiggers) applying for loans stating that they made double or triple what they actually made. Couple this with the fact that lenders made it OK to qualify applicants on the low-interest-rate "teaser" payments instead of the full payment after the teaser rate expires (or, worse still, on just the interest portion of the payment, ignoring the portion devoted to reducing principal).

Before stated-income loans were eliminated as a product line, a test was developed whereby lenders determined if the stated income was reasonable in light of the applicant's profession and length of time on the job. Trouble was that there wasn't much data available, and the test was flawed at best.

In the case described in this article, add the fact that the applicants were illiterate and had no idea what they were signing. If a couple like this is working with a broker or lender who does not take seriously the notion that they are acting as "financial advisers" to this couple, the result is a disaster. In my business, I regularly advise customers who are interested in an adjustable rate mortgage that their payment at the end of their fixed rate period may be more than they can afford -- we simply have no way of knowing where interest rates will go. It is for this reason that I advise customers to opt for a more expensive fixed-rate loan if they can afford it, or to count on a double payment once the rate adjusts.

Further, the article states that the creditworthiness of the couple was suspect. This was another thing that lenders ended up doing. When I worked at Indymac Bank, I regularly saw stated income loans fund that represented up to 95% of the value of a home that hadn't even been built, with borrowers who had what I would call marginal credit (it would be credit that would exclude an applicant today). And, in August 2007, when the shit hit the fan in the mortgage industry, it was these loans -- high loan to value, low credit, stated income -- that blew up and went into default most often.

The broker described in this article, and the lender who approved and funded the loan, simply held their noses (and, in the broker's case, broke the law) and funded the loan to add to their funding volume and their incomes. But the couple bear some responsibility as well. Simply telling someone "I'm illiterate, and you have to tell me what it is I'm signing" doesn't mean that's going to happen. A consumer like that needs someone he trusts in his corner, who understands the lending process and can adequately explain what the documents say. It can be as simple as reading the heading on the Promissory Note, which will usually read "Adjustable Rate Note" if the loan is an adjustable rate mortgage. This Virginia couple were too trusting of the people around them, did not understand the transaction, and should have simply refused to sign anything until someone they knew and trusted could explain it to them. Putting their signature on an inaccurate or misleading application is a commission of fraud, and even if they were duped into signing the document, at least they exposed themselves to prosecution for fraud.

Today's lending environment is the most cautious one in which I've ever worked. We require so much documentation that it's almost impossible to commit fraud. In fact, those who do the income/credit analysis put their jobs on the line if they make even as few as two mistakes in a month. When one is reviewing 5-10 files a day that contain up to hundreds of pages of documentation, the odds are good that one will make a mistake. But, as they say, the lock on the door will only keep out the honest man, so a way will be found to get around the rules.

I feel for the couple in this article. I also sympathize with the broker and the employees who worked on the loan. It's tempting to look the other way when thousands of dollars in income are on the line. I've left a lot of money on the table because I won't go there.

One day, these types of loans will return, and there will be enough controls to make them a lot safer. Only self-employed people will be allowed to apply, and the loan will not exceed 60-70% of the home's value, and the applicant will need a minimum of a year's payments in the bank. Either that, or self-employed people will have to report their incomes differently (and pay the taxes they so eagerly try to avoid paying) if they wish to qualify for mortgages that exceed what their tax returns currently will allow. Either way, it kinda sucks.

Establishment Republicans "Pale-in" Comparison to True Conservatives

Interesting development today: The National Republican Senatorial Committee announced today that it will not fund Republican candidates in disputed primaries. Seems to me like the Republican establishment has genuflected before the wingnut base and agreed to not stand in their way as they attempt to re-define the Republican Party -- not to mention Conservatism.

Once again, the GOP is on its way to becoming the Christianist Party, which bodes very well for the vast majority of Americans who do not subscribe to their radical theocratic ideology.

It bodes badly for establishment Republican candidates in tough races, like Charlie Crist who is running for Senate in Florida and has a serious challenge on his right from Marc Rubio, the speaker of the Florida House of Representatives. Also, it means newly announced Senate candidate Carly Fiorina, the former CEO of Hewlett Packard and a member of John McCain's economic advisory board, will get no Party support as she battles ultra-conservative Irvine assemblyman Chuck Devore in the primary. With her millions, she doesn't need the money from the Party. Whether having Michael Steele or Arnold Schwarzenegger or John McCain or (name any other Republican politician who lacks as much star power as Sarah Palin -- yeah, pretty hard, right?) stumping for her by email or direct mail or in TV buys (on her dime, of course) will be a benefit is anyone's guess.

Look for Senator Boxer to step up her environmental credentials, her close relationship with a president who is still very popular in California, and I predict Carly Fiorina will have lost more than just her hair (to chemo, just a joke here, OK?).

Italy's Courage

A big event. Italy convicts 23 former CIA agents in absentia for abducting a Muslim cleric in Italy and rendering him to a black site (where he claims he was tortured). They were also all sentenced to eight years in prison.

No commentary from Greenwald or Sullivan (yet). I'm sure there will be at some point. The US State Department expressed "disappointment" in the verdict. That's about as far as they can go with Italy.

An important human rights victory today. At least there is one place in the world where basic human rights are honored.

The Cult of Ayn Rand

I read The Fountainhead in college and loved it immensely. Not because I bought into Rand's idea of the Superman who were destined to rule over the pitiful masses. I actually detested the character of Ellsworth Toohey, who was Rand's mouthpiece throughout the novel. I didn't much like Howard Roark either, since he seemed to be self-destructive to the point of absurdity. to me, it was always better to reshape a system while being part of the system. Being apart from the system meant being small potatoes, unheralded, and basically art-for-art's-sake. I liked the book because it taught me about compromise and the fine line one must walk in life to preserve one's core terms as a human being while actually getting along with others.

Well, here come two new Rand biographies -- Goddess of the Market by Jennifer Burns and Ayn Rand and the World She Made by Anne Heller -- to figure out where her "philosophy" of objectivism fits into today's world.

A profile of Rand on Slate by Johann Hari tackles this "damaged woman" thusly:

We all live every day with the victory of this fifth-rate Nietzsche of the mini-malls. Alan Greenspan was one of her strongest cult followers and even invited her to the Oval Office to witness his swearing-in when he joined the Ford administration. You can see how he carried this philosophy into the 1990s: Why should the Supermen of Wall Street be regulated to protected the lice of Main Street?

The figure Ayn Rand most resembles in American life is L. Ron Hubbard, another crazed, pitiable charlatan who used trashy potboilers to whip up a cult. Unfortunately, Rand's cult isn't confined to Tom Cruise and a rash of Hollywood dimwits. No, its ideas and its impulses have, by drilling into the basest human instincts, captured one of America's major political parties.

Curious Parallel

Ezra Klein at The Washington Post draws a parallel between what's happening in the NY-23 contest to the Barry Goldwater nomination:

It's not so much that Republicans are mistaking the enthusiasm of a rump faction for the preferences of the electorate -- the Republican Party tried to back Scozzafava, after all -- as they're powerless to resist.

All of which suggests that the right historical analogue may not be Ronald Reagan but Barry Goldwater. And though Goldwater's campaign led to Reagan's later rise, it also led to a historic pickup for the Democrats and the creation of Medicare, Medicaid, Head Start, PBS, food stamps, welfare ...

I'm with Sullivan a bit on this. I'm not sure that this little contest is indicative of a nationwide trend just yet. But if it does indeed smell like one, it's not about the redefining of the Republican Party. Remember, the candidate endorsed by Palin, Limbaugh, and Beck is running as a third party candidate. This is indicative of what I predicted not long after the presidential election last year:

Attempting to turn New Testament theology into political power will further marginalize the Christianists and result in the eventual splintering of the Republican Party into at least two, perhaps three distinct segments: the radical theocons, the socially moderate low-tax corporate class, and perhaps a group that tries to take the best from both worlds.

I've amended that prediction once or twice, but essentially the splintering is underway, starting with this little congressional contest. Whether Hoffman wins or Owens does, the movement to define Republicanism as intolerant Christianism combined with neoconservative war-mongering and cults of personality has begun. May they be successful beyond their wildest imaginings!

Glenn Greenwald appeared last Friday on an online interview with Bill Moyers. I strongly recommend that you watch the entire clip, viewable here. Glenn is an extremely articulate and persuasive man who, with lawyerly precision (duh, he's a former constitutional lawyer), argues how both the Bush and Obama administrations have circumvented the rule of law as it pertains to detainee abuse.

On the heels of that interview, Greenwald today presents the rulings of the Second Circuit Court of Appeals in the Arar v. Ashcroft case. In a stunning 7-4 decision, the court upheld a lower court ruling dismissing in its entirety a lawsuit brought by Maher Arar, a dual Canadian/Syrian citizen, against the US government. In 2002, Arar was returning home to Canada from a vacation when he was detained during a stopover at JFK. He was accused of being a terrorist, held for two weeks without charge or any communication with counsel or even family, and then rendered to Syria where he was imprisoned for 10 months and brutally tortured. The Greenwald piece contains a dissenting judge's recounting of Arar's ordeal.

The Canadian Prime Minister, the conservative Brian Harper, publicly apologized to Arar for the role Canada played in these events, and the government awarded him $9 million in compensation. On top of that the Canadian government publicly disclosed what happened to Arar and concluded that there was no evidence to suggest that Arar had been involved in any terrorist activity whatsoever.

Contrast that with the utter refusal of the US government even to acknowledge publicly what it did or admit any wrongdoing. In its arguments the government, under the jurisdiction of Attorney General Eric Holder (this is not John Ashcroft or Alberto Gonzalez, mind you, but Obama's AG), argued that "state secrets" prevented the courts from having any jurisdiction over the events of the case. The appeals court agreed, saying that essentially Arar had no right to sue the federal government over what happened to him. Read the whole Greenwald piece to get a flavor of just what kind of legal hoops Arar was told to jump through.

Excuse me, is this the same Barack Obama for whom I voted last year? Is this same Barack Obama arguing that he, as president, should be above the law when it comes to national security? What, did Dick Cheney give him a DVD box-set of the first three seasons of 24 as a goodbye gift?

Greenwald asserts that this decision reflects the character of this country. Appeals court judge Guido Calabresi, in his dissent, wrote, "When the history of this distinguished court is written, today's majority decision will be viewed with dismay." Harper's Scott Horton suggests that this decision will go down in history with as much impact as the Dred Scott decision in the 19th century which got the ball rolling to end slavery in America.

Friends, welcome to 21st century American justice. This is a place where powerful people have made sure that our laws are reserved for ordinary people only. A place where a president who campaigned on the idea of transparency holds fast to the idea that secrecy as defined by the most legally corrupt regime in US history somehow has solid legal footing, even if it isn't expressed in the Constitution. A place where judges renders themselves supine to the executive branch instead of acting as a vigorous check against executive overreach (and, in the case of Bush/Cheney, outright criminal acts).

However, my greatest disgust is reserved for the American public, who, in the pursuit of material comforts and stress-free lifestyles, has turned "of the people, by the people, for the people" into an abstraction -- a farce, even. We are the laziest citizens of the most powerful country on earth. And our power grew because of hands-on citizenship, shared sacrifice, and a firm belief in the Constitution. Today, people speak about "my rights," "my health care," as if the very idea of togetherness is reserved only for political campaigns (or worse, churches).

Sad to say that the generation of baby boomers to which I belong is a mass of self-centered, petulant children.

Convert or Die

The media are paying close attention to the NY-23 congressional race there, in particular because the incumbent, a pro-choice Republican woman, has dropped out of the race and thrown her support behind the Democratic challenger. The more moderate elements in that district are trying to avoid the wingnuts from establishing a beachhead in this district, to serve as the model for other races around the country as they try to define, once and for all, the Republican Party as the Christian(ist) God/Tea Party Party.

New York Times columnist Frank Rich opines thusly:

Though they constantly liken the president to various totalitarian dictators, it
is they who are re-enacting Stalinism in full purge mode.

Well, while I would agree that purges are most definitely on the minds of these wingnuts, they are not Stalinist to any degree. I would liken them more to the Crusades, the Inquisition, the Salem witch trials, and al Qaeda than Stalin. Stalin's atheistic purges were designed to kill off political enemies. The wingnuts's desire to redefine the GOP comes from a deeply-held conviction that 1) the United States is a Christian nation, that her founders were devout Believers in the modern Evangelical mold, and that for the sake of their twisted political narrative the Constitution's roots are in the New Testament; and 2) those who claim to be Republicans/Conservatives who do not rigidly adhere to this worldview are neither Republican nor Conservative, and have no place at their table, at least when it comes to defining their political platform (they certainly will take their money and their votes, however).

This movement is based in hatred: hatred for gays, hatred for non-Christians, and hatred for non-whites, in that order. Their views on governmental fiscal management are irrelevant, as they lionized Obama's predecessor, whose irresponsible spending nearly triggered a global depression. Sensible Americans (read, those who do not watch Fox News or listen to right wing talk radio except to laugh) does and will continue to see through this nonsense.

As for political victories, they will be few and far between, no more consequential than a potential freshman Congressman from a district in New York that elected him with votes that numbered in the low four figures. They will marginalize themselves even more, find themselves unwelcome on college campuses across the country and unwelcome at military academies, anywhere where their overtly theocratic tactics are in full court press.

Why NY-23 is Important, Cont.

Per Josh Marshall at Talking Points Memo, the race for the seat in this very sparsely populated district is all about how the hard-right wingnuts of the GOP are laying out their strategy to take the country back in 2010 and 2012.

Other than the occasional win in provincial contests, it will fail utterly. To stake a national campaign on social and moral issues, all the while trying to demonize the Democratic Party and the President as Marxists, Stalinists, Nazis, and un-American (literally in the case of Obama) to a voting public that already knows otherwise and is growing tired of that argument, will mean more disappointment for the GOP.

If the election of Obama in 2008 meant that the GOP would stay out of the White House for a generation, following the leads of the Limbaughs, Palins, Becks, and Hannitys of the entertainment world will create a GOP that is closer to a Jerry Springer audience than a political party.

Why NY-23 is Important

For some Democrats, the race for the congressional seat in New York's 23rd District means that the Republican Party gets to dig themselves deeper into their ideological, theocratic hole.

As for me, I agree that further polarization is needed if Americans (remember, I think collectively we're a pretty stupid bunch of people) are going to understand what Republicans truly value. It has everything to do with money, power, the fulfillment of biblican prophecy, and to a lesser extent, the legislation of morals.