Megan McCardle is almost always insightful and interesting, but I have to strongly disagree with her about the efficacy of changing the bankruptcy laws to allow the modification ("cram-down") of mortgages on residences.
A Chapter 13 debtor confirms a plan of reorganization under which she makes payments for up to five years, but not everyone ends up making all the payments for the whole term of the plan. (She believes that proportion of failed plans is 2/3, I think after we change the law, it will get better as a different class of debtor starts filing Chapter 13s). McCardle thinks these debtors will be worse off because their bankruptcies will be dismissed, tossing out of the frying pan of bankruptcy protection, and back in to the fire of foreclosure and state law remedies.
But McCardle's prediction makes two mistakes: one about bankruptcy law, and the other about how people respond to bankruptcy law. Legally, once a debtor fails to make payments under a Chapter 13 plan, the case is not automatically dismissed. Instead, the debtor has the chance to convert her case from a 13 to a 7. This has been made more difficult by the 2005 bankruptcy changes (Sec. 707(b)(3), 'presumption of abuse', and the special cicrumstances test - for those of you playing along in the home game). But not only is it a real possibility to overcome these tests, I'm finding significant 'word on the street' that the U.S. Trustee (the Gov't officials charged with overseeing these sorts of things) aren't challenging the conversions as often as vigorously as they might for fear of having the statute overturned or limited on appeal.
I also think McCardle fails to appreciate the impact outside of bankruptcy that the 13 Cram-down change would engender. Right now, or whole system for making and administering home loans assumes that the mortgage is an all-or-nothing proposition. Until recently, this kept mortgage service costs low and made them easy to securitize. What we see now is that there is some real number of people who ought to be able to refinance mortgages (especially if they were steered in to bad products before), but who won't be allowed to by 'the system.' This is a real economic deadweight loss to not only the borrower, but also the lender, not to mention the neighborhood. Let me rephrase. We are making things worse for no good reason in a lot of these cases.
I've advocated for 13 cram downs before, but under a slightly different rubric than the one Congress proposes. But the current proposal before Congress seems fine. Unfortunately, we've already missed the chance to help a lot of people and avoid some excess harm. But on the positive side, making these changes now will help even-out the rough spots ahead of the next economic decline.
Friday, January 30, 2009
Wednesday, January 28, 2009
Oh, Canada
Stephen Marche at TNR has an interesting piece about the looming political crisis in Canada. The multi-party system in our northern neighbor is leading to serious instability:
The country keeps refusing to pick an out-and-out winner. We have had minority governments since 2004, revealing our lack of shared purpose. The Conservatives have been unable to build the strategic alliances between regions that they have traditionally used to form governments, the Liberals are coming off their worst electoral showing ever, and the Greens have split the left without ever holding a seat in the Commons. In place of strong national parties capable of creating consensus, the country is realigning along single issues and regional interests, centrifugally spinning apart.
The path to dissolution has already been built. Quebec holds a referendum on independence every 15 years or so. The last one was 1995, so we have about two years left. If the rest of Canada is still incoherent, there will be less of an argument to keep the country together, and Quebec may well go. No one has any idea what a patchwork of national units divided by linguistic identity across the northern part of the Continent would look like. The East Coast would be split from the main body of English Canada--how would that work?
Marche notes that the US should be paying a lot more attention to it than it currently is (case in point- on Monday at lunch, my colleagues and I were trying to remember if Brian Mulroney was still the PM). Canada is America's largest trading partner, with $1.5b in goods and 300,000 people crossing the border every day. It's also our largest energy trading partner, and we share ownership over the Great Lakes, which provide drinking water for 35m in the region. At the very least probably worth knowing who the PM is.
The country keeps refusing to pick an out-and-out winner. We have had minority governments since 2004, revealing our lack of shared purpose. The Conservatives have been unable to build the strategic alliances between regions that they have traditionally used to form governments, the Liberals are coming off their worst electoral showing ever, and the Greens have split the left without ever holding a seat in the Commons. In place of strong national parties capable of creating consensus, the country is realigning along single issues and regional interests, centrifugally spinning apart.
The path to dissolution has already been built. Quebec holds a referendum on independence every 15 years or so. The last one was 1995, so we have about two years left. If the rest of Canada is still incoherent, there will be less of an argument to keep the country together, and Quebec may well go. No one has any idea what a patchwork of national units divided by linguistic identity across the northern part of the Continent would look like. The East Coast would be split from the main body of English Canada--how would that work?
Marche notes that the US should be paying a lot more attention to it than it currently is (case in point- on Monday at lunch, my colleagues and I were trying to remember if Brian Mulroney was still the PM). Canada is America's largest trading partner, with $1.5b in goods and 300,000 people crossing the border every day. It's also our largest energy trading partner, and we share ownership over the Great Lakes, which provide drinking water for 35m in the region. At the very least probably worth knowing who the PM is.
Monday, January 26, 2009
One reason to nationalize Citi
It's brand new $50m private jet:
As an example of the difference between nationalizing a bank as part of a rescue package and simply getting its toxic assets “off the balance sheet,” in a nationalization scheme the taxpayers whose money is paying for the jet would also own the jet and be in a position to sell it off. Under a Classic TARP plan you pay for the jet, but Citigroup’s shareholders own the jet, and Citigroup’s managers get to use the jet.
As an example of the difference between nationalizing a bank as part of a rescue package and simply getting its toxic assets “off the balance sheet,” in a nationalization scheme the taxpayers whose money is paying for the jet would also own the jet and be in a position to sell it off. Under a Classic TARP plan you pay for the jet, but Citigroup’s shareholders own the jet, and Citigroup’s managers get to use the jet.
This Place called Upstate (cntd.)
My colleague Adam writes below about Kirsten Gillibrand, and perhaps paints Upstate New York with too broad a brush. I'll note, among other things, that Gillibrand is from Columbia County, NY, and was a partner at a major law firm which, although located in Westchester, is still a "New York City firm."
I think Adam is right, however, in that there has been a push lately to find the next Heath Shuler- a kind of mythical Dirty Harry democrat who likes guns (or at least the NRA) and can rough up the GOP come election time. The problem with a lot of these folks is that when it comes to crunch time, they're often not very helpful to have in the caucus.
Case in point- Gillibrand's vote against the bailout in October. She made a lot of noise about how upstate residents shouldn't have to bail out NYC bankers. I understand the resentment of her constituents, as upstate NY has been one of the few areas nationwide which was widely passed over by the housing boom, so upstaters couldn't even cash in on 2nd mortgages and buy big new houses. On the other hand, we can all pretty easily imagine what would happen to government services and tax levels upstate if the driving force of New York's economy goes under. The bailout vote was one of those situations where we remember that we're a republic and not a democracy, and it's important for elected officials who are "in the know" and sophisticated about issues like this to buck the short term requests of their constituents.
On guns, some of her NRA supported positions are pretty extreme, and I can only hope that now that she's representing the Bronx as well as Glens Falls that she'll moderate her views. Pressure from the left on this point- from bloggers, editorial boards, Mayor Bloomberg, and the 2010 primary threat from Long Island rep. Carolyn McNally should help.
I think Adam is right, however, in that there has been a push lately to find the next Heath Shuler- a kind of mythical Dirty Harry democrat who likes guns (or at least the NRA) and can rough up the GOP come election time. The problem with a lot of these folks is that when it comes to crunch time, they're often not very helpful to have in the caucus.
Case in point- Gillibrand's vote against the bailout in October. She made a lot of noise about how upstate residents shouldn't have to bail out NYC bankers. I understand the resentment of her constituents, as upstate NY has been one of the few areas nationwide which was widely passed over by the housing boom, so upstaters couldn't even cash in on 2nd mortgages and buy big new houses. On the other hand, we can all pretty easily imagine what would happen to government services and tax levels upstate if the driving force of New York's economy goes under. The bailout vote was one of those situations where we remember that we're a republic and not a democracy, and it's important for elected officials who are "in the know" and sophisticated about issues like this to buck the short term requests of their constituents.
On guns, some of her NRA supported positions are pretty extreme, and I can only hope that now that she's representing the Bronx as well as Glens Falls that she'll moderate her views. Pressure from the left on this point- from bloggers, editorial boards, Mayor Bloomberg, and the 2010 primary threat from Long Island rep. Carolyn McNally should help.
Parallels
Andrew Sullivan compares the 9/11 hijackers and the Hudson landing pilots:
Over seven years ago, a group of religious extremists seized control of an aircraft in that same airspace, men who had very little flying experience and a philosophy of maximizing the deaths of innocent civilians on the ground. They did all they could to murder as many as they could in order to secure the maximum reward for themselves in heaven and in worldly renown.
Seven years later, two pilots who have since remained remarkably distant from media attention, were in a similar cockpit in the same crowded area and their over-riding concern was to prevent any civilian casualties at all. That's why they even avoided small airports which might have led to a crash into inhabited neighborhoods. With enormous expertise, gained by rigorous training in a civilized society, they managed to land safely on the river and save everyone both on board and on the ground.
It seems to me that dignity and training and expertise and humaneness are the values of our society at its best. All of them are self-evidently superior to the values of vainglory, amateurism, impulsiveness and cruelty that bedevil our enemies. If these are the grounds on which we fight this war - and they are ours to choose - then we will win. And we will deserve to.
Over seven years ago, a group of religious extremists seized control of an aircraft in that same airspace, men who had very little flying experience and a philosophy of maximizing the deaths of innocent civilians on the ground. They did all they could to murder as many as they could in order to secure the maximum reward for themselves in heaven and in worldly renown.
Seven years later, two pilots who have since remained remarkably distant from media attention, were in a similar cockpit in the same crowded area and their over-riding concern was to prevent any civilian casualties at all. That's why they even avoided small airports which might have led to a crash into inhabited neighborhoods. With enormous expertise, gained by rigorous training in a civilized society, they managed to land safely on the river and save everyone both on board and on the ground.
It seems to me that dignity and training and expertise and humaneness are the values of our society at its best. All of them are self-evidently superior to the values of vainglory, amateurism, impulsiveness and cruelty that bedevil our enemies. If these are the grounds on which we fight this war - and they are ours to choose - then we will win. And we will deserve to.
This "Upstate New York" Place
What a lot of great publicity for Upstate New York from the appointment of the Hon. Ms. Gillibrand (pronounced with a "J")! Who knew that there was such a wonderful place where people shoot Christmas Turkeys, don't care about what happens to the illegal immigrants among them, and think that whole Wall Street bailout mess was just tomfoolishness. So "real America," yet so close to the real New York! I bet the electable white Democrats are "socially moderate," but well-known for their "fiery brand of economic populism." I wonder if they also have antiquiquing?
Kirsten Gillibrand might do a great job, and she might have been the best pick, and yada yada yada, but I've got to tell you, I don't see it.
I've heard her described as a tough campaigner because she doesn't mind running negative ads against her opponents. That's not tough campaigning. If the ads deserve to be run, then its reasonable campaigning. If they don't deserve to be run, then it's craven and possibly dishonest campaigning. Tough campaigning is sticking to your guns (as opposed to 'clinging to your guns'?) when you have a position that might be unpopular. Tough campaigning is not using an issue or line of attack that you know only clouds the real issues even though you could use it to an advantage.
This situation is the sum of a lot of failures of political culture in our country, and it doesn't have to end badly for New York or the Democratic party, but I think I'm starting to make out a political high tide line.
Kirsten Gillibrand might do a great job, and she might have been the best pick, and yada yada yada, but I've got to tell you, I don't see it.
I've heard her described as a tough campaigner because she doesn't mind running negative ads against her opponents. That's not tough campaigning. If the ads deserve to be run, then its reasonable campaigning. If they don't deserve to be run, then it's craven and possibly dishonest campaigning. Tough campaigning is sticking to your guns (as opposed to 'clinging to your guns'?) when you have a position that might be unpopular. Tough campaigning is not using an issue or line of attack that you know only clouds the real issues even though you could use it to an advantage.
This situation is the sum of a lot of failures of political culture in our country, and it doesn't have to end badly for New York or the Democratic party, but I think I'm starting to make out a political high tide line.
Saturday, January 24, 2009
Obama Inauguration
This is one of the coolest picture computer things I've ever seen: Gigapan of the Obama Inauguration.
Friday, January 23, 2009
And the winner is... (cntd)
HRC corrects their previous statements about Gillibrand, from which I drew my earlier post:
There has been some discussion about the record of Kirsten Gillibrand, New York Governor David Paterson's pick to replace Hillary Clinton, regarding her stance on Don't Ask Don't Tell and additional LGBT issues. In particular, we'd like to clarify references to the Human Rights Campaign Scorecard for the 110th Congress. Although Kirsten Gillibrand did not co-sponsor legislation to repeal DADT, non-cosponsorship does not mean support for the policy or opposition to repeal. In fact, in conversations with her office the Human Rights Campaign has confirmed Gillibrand is in favor of repealing Don't Ask Don't Tell and supports full marriage equality for gay and lesbian couples.
This makes me somewhat happier, as does finding out that she was at a couple of top-notch law firms and was an assistant counsel at HUD before running for Congress. Some of her gun record, however, still exceeds what's necessary for courting the sportsman/hunter vote Upstate.
There has been some discussion about the record of Kirsten Gillibrand, New York Governor David Paterson's pick to replace Hillary Clinton, regarding her stance on Don't Ask Don't Tell and additional LGBT issues. In particular, we'd like to clarify references to the Human Rights Campaign Scorecard for the 110th Congress. Although Kirsten Gillibrand did not co-sponsor legislation to repeal DADT, non-cosponsorship does not mean support for the policy or opposition to repeal. In fact, in conversations with her office the Human Rights Campaign has confirmed Gillibrand is in favor of repealing Don't Ask Don't Tell and supports full marriage equality for gay and lesbian couples.
This makes me somewhat happier, as does finding out that she was at a couple of top-notch law firms and was an assistant counsel at HUD before running for Congress. Some of her gun record, however, still exceeds what's necessary for courting the sportsman/hunter vote Upstate.
Amazing
Check out the video below of a new prosthetic arm from i-Limb, which is dextrous enough to allow the wearer to throw a ball and hold and manipulate objects (via Engadget):
And the winner is....
Fresh on the heels of Caroline Kennedy's suspicious withdrawal from consideration, Governor Paterson has selected Kristen Gillibrand, a congresswoman from the Albany area, as the new Senator from New York.
From a political perspective, Paterson's pick makes sense. He shores up support among women and Clinton supporters, and also gains some chits Upstate, which may be difficult terrain for the governor in his quest for a term in his own right in 2010.
Gillibrand has been branded a "centrist," which applied to her is a somewhat meaningless term. She has been endorsed by the NRA, which is to some degree necessary to win election in Upstate New York where hunting and gun ownership are a significant part of the culture. The Upstate hunting vote doesn't necessarily explain Gillibrand's vote to repeal the DC semi-automatic ban, however. Her NRA cred has riled up Democratic Long Island Rep. Carolyn McCarthy, whose husband was shot and killed on the LIRR, and who has vowed to run in a primary against Gillibrand.
More troublingly, Gillibrand's record on gay rights is pretty appalling:
According to the Human Rights Campaign, she voted against the repealing of Don't Ask Don't Tell, opposed legislation that would grant equal tax treatment for employer-provided health coverage for domestic partners, opposed legislation to grant same-sex partners of U.S. citizens and permanent residents the same immigration benefits of married couples and opposed legislation to permit state Medicaid programs to cover low-income, HIV-positive Americans before they develop AIDS.
Apparently she also interned for Alphonse D'Amato when she was in college.... I'm starting to like this pick less and less the more I learn.
From a political perspective, Paterson's pick makes sense. He shores up support among women and Clinton supporters, and also gains some chits Upstate, which may be difficult terrain for the governor in his quest for a term in his own right in 2010.
Gillibrand has been branded a "centrist," which applied to her is a somewhat meaningless term. She has been endorsed by the NRA, which is to some degree necessary to win election in Upstate New York where hunting and gun ownership are a significant part of the culture. The Upstate hunting vote doesn't necessarily explain Gillibrand's vote to repeal the DC semi-automatic ban, however. Her NRA cred has riled up Democratic Long Island Rep. Carolyn McCarthy, whose husband was shot and killed on the LIRR, and who has vowed to run in a primary against Gillibrand.
More troublingly, Gillibrand's record on gay rights is pretty appalling:
According to the Human Rights Campaign, she voted against the repealing of Don't Ask Don't Tell, opposed legislation that would grant equal tax treatment for employer-provided health coverage for domestic partners, opposed legislation to grant same-sex partners of U.S. citizens and permanent residents the same immigration benefits of married couples and opposed legislation to permit state Medicaid programs to cover low-income, HIV-positive Americans before they develop AIDS.
Apparently she also interned for Alphonse D'Amato when she was in college.... I'm starting to like this pick less and less the more I learn.
New Contributor
As you may have noticed from the previous post (exposing the pre-recorded nature of the Yo Yo Ma ensemble at the inauguration), cnyexpat has a new contributor. Adam is a campaign buddy from my Gore campaign days in Florida, and is currently a lawyer living in Texas. I'm looking forward to the opportunity to having some more dialogue on the blog, as well as having the benefit of his insights into politics.
Wow, my first blog post on Cnyexpat and I'm already questioning the artistic integrity of Yitzchak Pearlman and Yo-Yo Ma! As the Tiempos del Nuevo York explained, that first 'live' performance of the administration was actually pre-recorded for our listening pleasure.
The reason why they did it makes plenty of sense; very cold and windy conditions make it difficult to make music. See performance of Aretha Franklin, ibid, (lacking usual awesomeness).
That explains the problem, but not the solution. I don't doubt that those four musicians could lay down an equally awesome performance right now should they so choose, but that's not what they did by getting up there in front of us. In effect, they said, "We're doing this right now." Why break faith with the audience like that? Why not either find some other way to perform (like inside a translucent screen), or just show us a video?
The reason why they did it makes plenty of sense; very cold and windy conditions make it difficult to make music. See performance of Aretha Franklin, ibid, (lacking usual awesomeness).
That explains the problem, but not the solution. I don't doubt that those four musicians could lay down an equally awesome performance right now should they so choose, but that's not what they did by getting up there in front of us. In effect, they said, "We're doing this right now." Why break faith with the audience like that? Why not either find some other way to perform (like inside a translucent screen), or just show us a video?
Wednesday, January 21, 2009
First Move
From Reuters:
GUANTANAMO BAY U.S. NAVAL BASE, Cuba (Reuters) - Hours after taking office on Tuesday, President Barack Obama ordered military prosecutors in the Guantanamo war crimes tribunals to ask for a 120-day halt in all pending cases.
Military judges were expected to rule on the request Wednesday at the U.S. naval base in Guantanamo Bay, Cuba, an official involved in the trials said on condition of anonymity.
The request would halt proceedings in 21 pending cases, including the death penalty case against five Guantanamo prisoners accused of plotting the Sept. 11 hijacked plane attacks in 2001.
Prosecutors said in their written request the halt was "in the interests of justice."
GUANTANAMO BAY U.S. NAVAL BASE, Cuba (Reuters) - Hours after taking office on Tuesday, President Barack Obama ordered military prosecutors in the Guantanamo war crimes tribunals to ask for a 120-day halt in all pending cases.
Military judges were expected to rule on the request Wednesday at the U.S. naval base in Guantanamo Bay, Cuba, an official involved in the trials said on condition of anonymity.
The request would halt proceedings in 21 pending cases, including the death penalty case against five Guantanamo prisoners accused of plotting the Sept. 11 hijacked plane attacks in 2001.
Prosecutors said in their written request the halt was "in the interests of justice."
Citizens
Linda Hirshmann has a very interesting take on Obama's speech, starting with his address to "My fellow citizens":
There are two kinds of participants in the American Republic: citizens and Americans. They parallel precisely Isaiah Berlin's powerful, defining essay, "Two Concepts of Liberty." Citizens achieve positive liberty, freedom to. Americans enjoy negative liberty, freedom from. Almost nothing Barack Obama says is accidental. He chose "citizens," not "Americans."
...
Now Barack Obama, no dummy, is offering not just political change, but metaphysical change. Like few others in the liberal revival, he has learned the lesson that if you're going to change the politics, you must change people's understandings of what it means to be human, to make them let go of the possessive individualism that has led to such disaster. We caught a glimpse of this in his debate with Joe the Plumber, in which he gently tried to lead Joe to see himself as related to someone, even if it was only Joe's younger, poorer self. In invoking the concept of citizenship, he has at his side a strand of American history often overlooked in the last, conservative years: that, as the prize-winning American historian Gordon Wood the American Republic was founded in classical virtue, most particularly the virtue and the service ethic of the Father, George Washington.
There are two kinds of participants in the American Republic: citizens and Americans. They parallel precisely Isaiah Berlin's powerful, defining essay, "Two Concepts of Liberty." Citizens achieve positive liberty, freedom to. Americans enjoy negative liberty, freedom from. Almost nothing Barack Obama says is accidental. He chose "citizens," not "Americans."
...
Now Barack Obama, no dummy, is offering not just political change, but metaphysical change. Like few others in the liberal revival, he has learned the lesson that if you're going to change the politics, you must change people's understandings of what it means to be human, to make them let go of the possessive individualism that has led to such disaster. We caught a glimpse of this in his debate with Joe the Plumber, in which he gently tried to lead Joe to see himself as related to someone, even if it was only Joe's younger, poorer self. In invoking the concept of citizenship, he has at his side a strand of American history often overlooked in the last, conservative years: that, as the prize-winning American historian Gordon Wood the American Republic was founded in classical virtue, most particularly the virtue and the service ethic of the Father, George Washington.
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