The Hill newspaper today says Senate Republicans are threatening filibuster of the stimulus package if the Obama admin doesnt agree to remove a provision to allow bankruptcy judges to force mortgage noteholders to write down the mortgage principal to somewhere near a property's current (post-bubble) value.
It indicates they're feeling out whether they can blackmail Obama over this.
So far, it looks like Obama's caving. (Excerpts below the fold.)
The thieves in the financial industry want to make you go on paying on a $300,000 note when your house is now appraised at $175,000, and it will NEVER come back to anywhere near the value of the note. And the bubble wasn't your fault.
In other words, they are trying to erase the possibility that you can EVER save very much again. Not enough to send your kids to college! Not enough to retire!! Tell me: How would you do either of the above, without home equity at the center of the savings plan??
Meanwhile, the thieves have taken BILLIONS in bonuses from taxpayer bailouts--no doubt, using some of this booty to fund Republicans in the Senate.
Here's the info on the blackmail:
The provision would permit bankruptcy judges to shrink, or "cram down," mortgages for homeowners who owe more than their home is worth.
Obama and Democratic congressional leaders say they strongly support it, but the financial industry and Senate Republicans oppose it. So the White House and Democratic leaders worry that making the provision part of the stimulus would complicate their efforts to build GOP support in the Senate, where Republicans have enough strength to support a filibuster.
(The whole story is at http://thehill.com/...
How ugly, how vicious, do you get? Here's more:
Republicans signaled their opposition in the Judiciary hearing, saying it will drive up future mortgage rates and encourage homeowners to file for bankruptcy to lower their mortgages.
"Americans undoubtedly want solutions to the foreclosure crisis," said Rep. Lamar Smith (Texas), the top Republican on the committee. "But I do not believe they want solutions that amount to absolving borrowers of their personal responsibility."
Surprise!! The fourth biggest contributor to Smith’s 2008 campaign was the American Bankers Association. See http://www.opensecrets.org/...
If, dear reader, you have any lingering nostalgia for the "take responsibility for your own financial demise" crapola that Republicans, in the pay of the Bankers Association, dish out to their victims, consider this today from Paul Krugman (in a mildly critical riposte to Obama's inaug speech):
[I]n his speech Mr. Obama attributed the economic crisis in part to "our collective failure to make hard choices and prepare the nation for a new age" — but I have no idea what he meant. This is, first and foremost, a crisis brought on by a runaway financial industry. And if we failed to rein in that industry, it wasn’t because Americans "collectively" refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a great idea.
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And what about those BILLIONS from bank bailouts?? Take Bank of America, which acquired Merrill Lynch, for instance. Thanks to NYT's Floyd Norris yesterday (http://norris.blogs.nytimes.com/):
Today we learn that Merrill paid out large bonuses to most of its staff just before the takeover was completed — and as a $15 billlion loss on Merrill assets was emerging. Mr. Thain resigned. Bank of America says it needs more bailout money from the government.
A front-page NYT story today http://www.nytimes.com/2009/01/23/bu...
The final straw for Mr. Lewis may have been the decision by Mr. Thain to make an earlier-than-usual bonus payout to Merrill employees, just three days before the merger closed on Jan. 1....Mr. Thain’s departure comes after losses at Merrill Lynch prompted Bank of America to seek $20 billion in additional assistance from the federal government to close the deal. The second lifeline brought the government’s total stake in Bank of America to $45 billion and made it the bank’s largest shareholder, with a stake of about 6 percent.
Thain got fired mostly for not telling BofA how bad its losses actually were--but the BofA sources for the Times threw in the little detail about the bonuses.
The Hill story shows that Obama, Pelosi and Hoyer are not standing up to the banks, who are happy to force homeowners into foreclosure--or continued unfair high mortgage payments--while bargaining for further bailouts.
I don't think this is change. I think this is more of the same.