Forclosures

Just my two cents on the recovery plan.

If I were King, or Pres. O and his merry men & women, I'd take a big chunk of the bailout--maybe $200-300 billion-- and do the following:

1) Purchase foreclosed homes from the banks.

2) Pay 'em fair market value, plus 10%, in exchange for a promise that they will re-lend the money over, say, the next year or so. This way they would take bad assets off their books, the banks would be re-liquefied, the money would go back into the housing market (but, theoretically, to qualified borrowers this time, at the banks' discretion);

3) Hold the houses off the market for a minimum of 3 years--with an understanding that they would be feathered back into the market so as not to create a tsunami of supply in 2012--when they would be sold by the government at the then fair market value; and

4) In the meantime, lease the houses to working families who can afford to pay the taxes and upkeep of the house.

By taking a million to two million houses off the market, we would be using market forces to stabilize the housing market. Pulling all that supply off the market, while correspondingly making mortgage money available, should stop housing prices.from continued falling--and may even give the market a little bounce. Stable prices should lead to buyers who are waiting for the bottom of the market to come back into play. It should also allow homeowners to refinance and take out equity loans to stimulate the economy.

It might also stave off more foreclosures. Once borrowers and lenders of homes "on the fence" see that the bottom isn't falling out, workouts will make more sense.

For instance, I have a client who is several months behind in her mortgage because of a job interruption, etc. Last year the house would have sold for $425,000; now it's down to $325,000 and dropping. She owes, all in, about $325,000. She could afford to reinstate the mortgage, rolling in the arrears and maybe extending the term a few years--but both she and the bank are reluctant to do it for fear that the value won't be there. But if the market leveled off? This house would probably be saved.

The other issue is this-- handing money to people who aren't paying their mortgage is unfair to those many people who struggle each month to make the payment--and it threatens future lending practices as well.

We would be providing affordable housing to people who need it now.

And, ultimately, the government would have a chance to recoup some or all of its money--and may even make a billion or two if housing prices rise again.

Anyway--that's what I'd do with our money if I had the power.

Inauguration Day

I started this blog in September, 2004, a Republican living in a Democratic state.

I've been a Republican in spirit since I was a teenager, but my sense of where I stood on the political spectrum truly coalesced in my soul the summer of 1980 during a trip with my wife to Washington, DC. I was just 22, had just finished my first year in law school, and this was my first trip to DC.

I was overcome by the history, by the majesty, by the feeling of awe I felt in the presence of monuments to greatness. And though I knew intellectually that Carter was a small, failed man, and that I agreed with Governor Reagan on many issues, it was during our walk through Arlington Cemetery that it hit me in the gut that we needed leaders who thought big, who aspired to greatness.

In "Charlie Wilson's War" Tom Hank's Charlie Wilson tells of when he fell in love with America.

I know it's corny, but that moment in Arlington was when I did.

The polls say that about 80 % of America is rooting for Pres. O to succeed, which is about 25% more than voted for him. I like that statistic. I like to think it's because my fellow Republicans are more likely to put America first than our Democratic brethren (see the whining and brutally vicious attacks on W after he defeated Gore), but the truth is that in good part it is because Pres. O has handled himself throughout this transition with dignity and strength and intelligence (kudos, too. to the Bush team--every report is that they are more than cooperating).

I try to put myself in the position of Democrats in 1981. I'm not forsaking my party--indeed, all I need do is look at the Democratic Congress to reassure myself that I could never stand shoulder to shoulder with the likes of Reid, Pelosi & Frank, secure in the knowledge that if left to their devices this country would indeed fall.

Many Democrats voted for Reagan (Carter having been their W), but even more supported him at the outset of his Presidency.

I'm in the 25% that voted for McCain but fully support Pres. O and his team. Of all the Democrats he could have chosen, he has, by and large, surrounded himself with men and women who appear sober and competent. I believe his biggest challenges in the months ahead will not be from moderates and Conservatives, but from the lunatic left fringe of his own party, people who just do not understand how the world, or normal people, act.

I hope he gives a great speech today.

I hope there is in his Presidency things I can support wholeheartedly-- energy independence, a return to civic responsibility, a call for personal responsibility for all, a rebuilding of our infrastructure.

I didn't help elect the first African-American president, but I recognize how great a day it is for our country. Perhaps it is a poor rationalization, but I know in my heart I did not vote against Obama and certainly not because of his color-- I voted for John McCain and my party. And because of that I can smile and enjoy today, not as much as an African-American, certainly--and not as much as those who pulled a lever--or two-- for Pres. O. But as an American I intend to enjoy the moment.

The fate of our nation, and the futures of our children and grandchildren, rest to some extent in his hands-- so I wish President Barack Obama well.

Friday Quickies: Miracle On the Hudson

Quick thoughts about the amazing splash landing and 100% rescue of that US Air airplane on the Hudson yesterday:

.....Surprised PETA hasn't issued a statement decrying the death of the geese that apparently were sucked into the engines.

.....Does US Air get to count that as an "early landing" when they do their FAA stats?

....They say that the geese population is up 400% since the 1990's-- mostly attributable to mild winters (aha! Global Warming strikes again!!) and suburban open areas, such as soccer fields, that provide the geese with predator-safe grounds.

I'm thinking this:

Too many geese, and their droppings, are spoiling our fields, playgrounds, water and air traffic lanes.

Our homeless shelters and food banks are being stretched to the limits.

Problem One meet Problem Two.

Solution? Goose dinners.

....This is the answer, I guess, to the old standup routine: "Y'know, they tell you that the seat cushions become flotation devices. If they can do that, why can't they turn the plane into a boat?"

....If this happened next week, people would have credited Pres. O, and it would have been one of three documented miracles he will need to achieve Sainthood.

Seriously, it was a great feel-good story all the way around; everybody did their job with efficiency and valor. As a nation we needed this.

....And now a quote from the great Theodore Roosevelt:

"It is by no means necessary that a great nation should always stand at the heroic level. But no nation has the root of greatness in it unless in time of need it can rise to the heroic mood

-Fear God and Take Your Own Part, 1916

Blago & the Senate Seat

So the charged & arrested (but not indicted) Gov. of Illinois has selected someone to fill Pres. O' s Senate seat. Conventional wisdom, and what passes for wisdom in the Senate, is that the appointee should not be seated.

Why not?

Nobody has said that the appointee has done anything wrong-- his name hasn't been mentioned in any of the leaks regarding the scandal.

The appointee has held high elected office on a number of occasions-- far different from Caroline Kennedy here in NY-- so presumably he is at least marginally qualified. Actually, even if he wasn't qualified, what right would Sen. Reid and his cohorts have to decide otherwise? A slippery slope if the Senate gets to question the credentials of a duly appointed Senator--what's next? Questioning the credentials of a duly elected official?

Blago has the right to choose whom he wants to choose. He is still in office. Illinois, like NY, and many, if not all, states permits the Governor to appoint interim Senators--that may or not be wise, but in America we live by rules. If the people of Illinois, or the legislature, didn't like this rule, they could have changed it. They didn't.

You can't disqualify a Governor, or any elected official, from acting in his or her official capacity merely because a DA has brought charges, nor even if they are indicted. If we did that, every official within the jurisdiction of some politically motivated State or Federal DA would be arrested within 5 minutes of being sworn in.

Conviction? OK. But presumed innocent is a pretty big deal- here in the good ol' USA--it distinguishes us from the French--or at least that's what I learned long ago.

And the Illinois legislature hasn't impeached Blago yet.

So should the appointee sit? You betcha.