I just want to get the word out that the Sturbridge Democratic Town Committee now has a Facebook page.

Take a look at the page, decide if you like it or not. Comment on the page with suggestions of things you would like to see on the page.

Worcester Magazine has the story Vacant affair: How Worcester has learned to deal with the foreclosure crisis. This quote from the article mentions a few of the methods that Worcester employs.

Receivership and expanded enforcement power haven’t been the only changes. In 2009 with the help of anti-foreclosure activists, Worcester drafted and passed the Vacant and Foreclosed Properties ordinance, which forced lenders to register each foreclosure with the city and put down a $5,000 bond. When the house is sold, minus a 10 percent administrative fee and any compensation for work that the city had to do to upkeep the outside of the property, the lender receives the balance of the bond.

I have been waiting to hear of sensible and creative programs like this one.   The programs that Worcester put in place serve two important purposes. Of course one purpose is to find a way to fund the extra services the city ends up providing to neighborhoods with foreclosed (abandoned) homes.  The other equally important purpose is to impose upon the banks some costs for foreclosing on a home.

You would think that the idea of losing all income from even partial payments on the mortgage plus the complete decay and loss of value of the property that they foreclose might be enough incentive to make a bank look for other solutions to foreclosing.  Apparently not.  So rather than attempt to sue the banks for costs incurred by the city to police foreclosed properties, the city requires a bond up front to cover the costs of easily anticipated expenditures.  Using the Supreme Court’s logic that a bank corporation is a person, with all the rights and responsibilities of a natural person, this puts the burden on the people who deserve it.  If the mortgage agreement with the borrower says that if the borrower fails to pay, the lender takes ownership of the property, then the new owners of said property have all the responsibilities associated with property ownership.

David Stockman is interviewed in the story Halftime in America? Stockman Doesn’t Buy Auto Recovery Story from Yahoo! Finance.

It is not clear which part of the story he buys the least.  In the beginning of the interview he responds with this:

“If you look at the sweep of things, [the January auto sales data] this was kind of a blip in the sub-basement,” he tells me and Aaron Task in the accompanying video. Even if car sales run at an annual rate of 14 million, Stockman argues, that’s still at a much lower rate than several years ago. And the industry is still dependent on the free and easy extension of credit.

Many years ago when I was still working for Digital Equipment Corporation, we had a lecture from a former Ford executive.  He may have just been hired by Digital, but I am not sure of the circumstances anymore.  There is one thing I remember very clearly from his lecture.  It had to do with the break even point of a company.  At one point in its recent history at that time, Ford had to make 90% of its sales projections before it broke even – made a profit.  This was a very precarious position to be in.  If they fell 10% short in sales, then they would lose money.  What the lecturer explained, I think, was Ford’s efforts or maybe it was Digital’s efforts to make sure that the company’s break-even point was changed so that it would be far less than 90%.  I think the target was more like 50%. By the time I left Digital, they had probably forgotten the lesson.

What David Stockman’s comments fail to acknowledge is that though GM may be selling fewer cars, it probably has lowered its break-even point significantly since bankruptcy.  In other words, it does not need to sell as many vehicles as it used to in order to turn a profit.  This is just stating a fact.  It is not passing judgment on the methods GM used to lower its break even point.

Whether there is any wisdom in the rest of what he has to say, I will not pass judgment at this time.

It is odd that whenever Bill Moyers interviews David Stockman, he never mentions that he is a Congressman from Michigan.  I guess he only wants Stockman to talk about the parts of his beliefs that fit Moyers’ agenda.  (Oops! did I hint at questioning Moyers’ journalistic ethics?  Naw, couldn’t be.)

I let the words of the author of the article Ahmadinejad, an anti-imperialist – really? explain where he is coming from. The author is an Iranian exile Soheil Asefi.

As a young writer and I’d like to think, a progressive, I have been giving this a lot of thought. Is Ahmadinejad really ‘anti-imperialist’?  This question has provoked extensive debate not only among the Iranian left and democratic forces, but between these forces and the extremist neo-liberal forces in Iran.

Perhaps my Google+ friend, Hassan Moradi, would like to step in and express an opinion.

Progressives in the west have two battles to fight with respect to Iran.  It is hard to know which one to concentrate on first.

The primary battle these days is to try to prevent the USA from starting a war in Iran to gain control of Iranian oil.  We also want to prevent Israel from dragging us into a war even faster than some in the USA oil industry want.

The second battle of course is for freedom in Iran.  How do we fight that battle without our injecting our prejudices into Iranian politics?  Perhaps the religious right in Iran wants to drag the country back 1400 years and many Iranians do not want to take that trip.  We are fighting the same battle in the USA with our purportedly religious right (and co-opted by the ultra wealthy).  With the USA split on this issue itself, I think it is not realistic for Iranians to think we can tell them how to solve their problems over this issue.

I really don’t think that Iranians on either side of their internal conflict really want the USA to come in and install another Shah. So hard hearted as it may seem, the Iranians are going to have to figure this one out on their own.  If there were a clear cut, democratic direction in Iran, we could encourage it, but I do not think anyone inside Iran who can think clearly about the consequences wants us to intervene militarily.

The Nation Of Change has the very interesting article, Warren Buffett Exposed: The Oracle of Omaha and the Tar Sands. The article explains Buffet’s investment interests in various outcomes of the tar sands development in Canada.  Here is my reaction that I posted  to the article:

This is all valuable information to have, but there is no conclusion to all this breathless prose. I kept waiting with a, “yes, yes, but so what?”

As an investment a few years ago, I looked at tar sands, myself. At the time the investment was too over-priced for the risk involved. If Buffet is smart enough and has the diligence to wait until the time is ripe, I can’t fault him for that.

As the article indicates, it is not always easy to determine what is the least polluting alternative. That is why I favored sufficient time to do the environmental review of Keystone before I made up my mind.

Maybe you didn’t intend it that way, and maybe it was my own bias that had me waiting for the punchline. I applaud any article that increases my knowledge without presuming to know how I need to react to that knowledge.

On second thought maybe it was the word “Exposed” in the headline that set my expectations. The mention of meetings with Obama were meant to make me infer something or other, but I have resisted making that inference.

As you know from my postings, I am no idolater of President Obama, and I recognize that the worshipping at the feet of Warren Buffet tends to go overboard.  Even though I don’t feel it is my duty to be fair and balanced in this blog, I still like to set the record straight every now and then, no matter which direction it goes off the rails (pun intended).

Spell checkers, particularly the one in Forefox, dislike my use of the spelling worshipping. The modern way seems to no longer double up the final consonant in a word that has a preceding vowel and you want to add the suffix ing.

Initially I caved to the wants of my spell checker, but it looks so wrong to me, that I prefer to go back to the old way which Google tells me is still acceptable.

The new way makes it look to me that I would pronounce the word as wor-shipe-ing because the single consonant between the two i’s makes the first one a long i. Perhaps it is that the two i’s are in different syllables that is the key to making the pronunciation agree with the spelling. Whatever the case, it still looks horribly wrong to me, and I will resist.

The Dailykos has the article, Senate votes today on anti-union FAA bill. Tell Democrats not to cave.

The Senate votes today on the Federal Aviation Administration reauthorization bill—and as much as we need the FAA funded and open, we need 41 votes against this version of the bill. Since last summer, Democrats have stood strong against Republican attempts to make it all but impossible for airline workers to join unions through a provision that would have counted people who didn’t vote in union representation elections as having voted no. But now, Harry Reid and Jay Rockefeller, the majority leader and the chair of the Senate Commerce Committee, have signed off on a “compromise” proposed by Republicans. If you know one thing about today’s congressional Republicans, though, you can guess it’s no compromise. As Dave Johnson writes:

If you start with a bill that says, “kill all the unions, kill all the unions, kill all the unions, kill all the unions” and take out one “kill all the unions” is that a compromise? The unions are still killed three times over.

The Republicans would have you believe that the decline of unions comes from free market forces. They don’t want you to know about how hard they work in Congress to kill the unions. If you catch them red-handed they will still say, “Oh no, not me. I didn’t do it. The workers themselves chose to have the right to work without a union.”

Lest you think that I am blindly pro-union, let me remind you that this is just another case of avoiding true/false political decisions, but always asking how much of a certain policy you need. No doubt there have been times in the past where the unions have not exercised restraint and the laws were tipped in their favor. If we go back to that era again, I will be one of the first to say we have gone too far. However, in this era the scales have been tipped wildly out of balance in the other direction.

This is another case where certain policies stances have a time and a place. There may be a time to take a stance of reigning in union power, but this is not that time. Don’t make a mistake of sticking with an ingrained policy whose time has come and gone and has not yet returned.

There seems to be one Super Bowl ad that has people up in arms.

The Talking Points Memo article, Five Political Ads Featuring Asians Dancing On America’s Grave, has this ad and four others.

My contention is that the jobs are going to Asia because it is far too easy to make money in this country by manipulating other people’s money. Why would anyone want to hire thousands of workers and build factories when they can hire a few PhD computer experts, give them access to powerful computers, and make billions of dollars stealing other people’s money?

The talented engineers and scientists in this country can make far more money on Wall Street than they can innovating new products and hiring people to build them.

People in China have been known to be executed for committing some of the financial crimes that we spend trillions of government dollars bailing out instead of prosecuting.

All we have to do to get back into contention for economic vitality in the future is to start valuing the economic activity that matters and discouraging economic activity that wastes our country’s strength.

The people trying to stimulate the economy and put non-financial workers back to work are trying to save this country. The people who want to deregulate until any kind of non-productive, money manipulation scheme has greater rewards than making productive things are the ones rigging the system so that it goes into a fatal death spiral.

There is an aspect of the previous posts Mr. Daisey and the Apple Factory – Update and Mr. Daisey and the Apple Factory that people who have not spent 40 years in the high-tech industry might not get.

Through out a large part of my career, I worked in companies or was involved in making software for companies that made very complex electronics. These industries used highly automated manufacturing processes to put hundreds of components on a printed circuit board to make computers, electronic equipment, cars, airplanes, and many other things. These days, there seems to be much less automation in assembling electronic products like cell phones and other electronics.

If there were any incentive to automate this manufacturing process, the automation equipment and software would be created. The lure of cheap labor and lax regulation in other countries, and other easier ways to make money in this country would not be as compelling a story.

There is no guarantee that we can compete in the economy of the future even if we do make major adjustments. If we keep on the present path, however, it is pretty likely that we will fail.

Apparently some real eye-opening information came out on today’s State Of The Union program on CNN. Talking Points Memo headlined it as, Bob McDonnell: GOP Governors Deserve Credit For The Recovery, Not Obama.

Virginia Governor and Mitt Romney surrogate Bob McDonnell (R) on Sunday floated what may turn into a Republican talking point if the economy continues to improve: It wasn’t President Obama who made it happen, it was the GOP governors.

“Look, I’m glad the economy is starting to recover, but I think it’s because of what Republican governors are doing in their states, not because of the president,” McDonnell said on CNN’s “State of the Union.”

I can hardly wait to hear what the Republican governors are doing to help the economy recover.  They could claim that by balancing state budgets and laying off hundreds of thousands of state employees, that the newly unemployed stimulated the economy.  They could claim that by attacking workers rights, that the new lower pay and benefits the workers received helped stimulate the economy.  They could claim that stealing companies and their jobs from other states by offering companies tax cut incentives to relocate that they stimulated the national economy.

Maybe the above points are not their claims to success.  Surely they must have some hard evidence to back up their claims.  Of course it is interesting that states like Massachusetts with a Democratic governor and state legislature are leading the recovery.  So enticing companies away from Massachusetts with their state government bailouts in some way is helping Massachusetts.  Maybe they are just taking the bad companies off of our hands.

Well, the actual article on Talking Points Memo is Gingrich: Austerity Is Wrong For America, We Need Pro-Growth Policies Instead.  This is the quote from Meet The Press.

“First of all, David, I don’t think you’ll ever find me talking about an age of austerity. I don’t think that’s the right solution,” Gingrich said. “I am a pro-growth Republican. I’m a pro-growth conservative. I think the answer is to grow the economy, not to punish the American people with austerity.”

He didn’t point out that corporations are sitting on wads of cash, so that there was no need to lower their taxes.

He didn’t point out that everyone is so nervous about the future that they are not buying as much as they should to grow the economy. So the government has to step in and buy now what it will eventually have to buy some time in the future anyway. The American Society of Civil Engineers in its 2009 Report Card for America’s Infrastructure estimates that we need to spend $2.2 trillion dollars over the next 5 years repairing our infrastructure just to prevent it from failing.

He didn’t mention that people with underwater mortgages do not dare spend as much as they could and they so not have the mobility to move where the jobs are. There needs to be a government program to write down some of the principal on their mortgages  to free up a lot of pro-growth energy.

He didn’t mention that the need to provide health insurance to employees is a roadblock for increased hiring from small companies.  A government funded, single-payer health care system will unleash tremendous economic growth from small business.

He didn’t mention that the very wealthy are sitting on trillions of dollars that they are afraid to invest.  They now take the lazy way out by lending it back to the government so that they can at least earn interest on it.  Taxing some of this money away would lower the deficit and encourage growth by putting the money to work.

However, now that his true pro-growth bias is beginning to emerge, can the above statements be far behind?

The article A Mortgage Tornado Warning, Unheeded comes from The New York Times.

LIKE most people, Nye Lavalle had little interest in the mortgage industry until things got personal. Raised in comfortable surroundings in Grosse Pointe, Mich., just outside Detroit, he began his business career in the 1970s, managing professional tennis players. In the 1980s, he ran SMG, a thriving consulting and research firm.

Then he tried to pay off a loan on a home his family had bought in Dallas in 1988. The balance was roughly $100,000, and the property was valued at about $175,000, Mr. Lavalle said. But when he combed through figures provided by his lender, Savings of America, he found substantial discrepancies in the accounting that had inflated his bill by $18,000. The loan servicer had repeatedly charged him late fees for payments he had made on time, as well as for unnecessary appraisals and force-placed hazard insurance, he said.

Mr. Lavalle refused to pay. The bank refused to bend. The balance rose as the bank tacked on lawyers’ fees and the loan was deemed delinquent. The fight continued after his mortgage was allegedly sold to EMC, a Bear Stearns unit.

Unlike most people, Mr. Lavalle had the time and money to fight. He persuaded his family to help him pay for a lawsuit against EMC and Bear Stearns. Seven years and a small fortune later, they lost the house in Dallas. Back then, judges weren’t as interested in mortgage practices as some are now, he said.

The story ties mortgage fraud back to abuses at Fannie Mae or its subcontractors. This report seems to contradict my earlier claims that the shoddy mortgage practices did not originate at the government agencies like Fannie Mae, but started in private industry and were reluctantly adopted at Fannie Mae.  I was specifically talking about mortgage origination fraud of liar loans claimed to be mortgages meeting the standards of due diligence for giving out loans.  The fraud detailed in this article is on a different end of the process, but it certainly damages the credibility of Fannie Mae.

Thus begins my process of looking for evidence that refutes my prior belief in the relative innocence of the federal agencies.  Another example of the need to be wary of confirmation bias.  It is not enough to find evidence that supports your beliefs.  It is also important to look for evidence that refutes your beliefs.  Still the search must be careful.  If my new belief is that my original belief was wrong, then searching only for evidence of how wrong I was is just confirmation bias on the other side.

As Kermit the frog might have said, “It’s not easy finding the truth.”

The Bloomberg/Business Week article, Gingrich Ties to Fannie, Freddie Said to Extend to Speaker Days, has some interesting things to say about the history of Fannie Mae.  For the relation to this blog post, I picked out the following information:

Gingrich expressed support for Fannie Mae, traveling to Atlanta in 1995 to help open a Fannie Mae office promoting home ownership for low- and moderate-income families.

In a press release issued at the time, Gingrich said, “Fannie Mae is an excellent example of a former government institution fulfilling its mandate while functioning in the market economy.”

The reason for my interest in this is that it sets a date before which we know that Fannie Mae was changed from a purely government agency to a government-sponsored enterprise.

OK, this has prompted me to stop being lazy and just look it up in WikiPedia.

The Federal National Mortgage Association, commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.

I was surprised to learn that it has been a publicly traded company from as far back as 1968.

The information in WikiPedia is supported by the article A Brief History of Fannie Mae and Freddie Mac from Time magazine.  It is eye opening to see how far reaching are some of the good and bad decisions of government.  Some of the late 1960s criticisms of the Republicans against Fannie and Freddie may have been timely back then.  It may be that the responses to fix those criticisms turned out to be not so good in the long run.