Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Obama's HAMP Misery Continues

| Wed Feb. 17, 2010 4:51 PM EST

The Treasury Department released the latest figures today for its $75 billion flagship homeowner relief program, and the figures are—you guessed it—still abysmal. Through January the Home Affordable Modification Program has resulted in around 116,000 permanent modifications, 76,000 offers of permanent modifications, and more than 1 million homeowners beginning trial modifications.

Now, an interpretation. First off, the statistic that really matters here is that first number—116,000—the number of permanent mods. It's not much at all. By comparison, 2.8 million households got foreclosure notices in 2009, shattering the previous record and foretelling more pain in the housing sector in 2010. Now while HAMP wasn't created to address all kinds of foreclosures (which is arguably one of its flaws), a program with $75 billion in taxpayer funds behind it should do far more than help a meager 116,000 homeowners almost a year later.

Then there's that "trial modifications" figure. Trial modifications are only a few months in duration, are hardly a guarantee for a permanent modification, and do very little, if anything at all, to lessen the burden on beleagured homeowners. One homeowner, for instance, told me that after wrangling with her servicer, Saxon Mortgage Services, for months to get into HAMP, she finally got a modification; to her dismay, though, her new payments were a measly $40 less than her original, unaffordable mortgage. The reason why? Saxon claimed this homeowner had a sister who was giving her more than $1,000 a month and that skewed her income calculations. The rub: This homeowner was an only child.

It's these kinds of errors and general confusion that continue to plague HAMP, as these latest numbers show. As for the Treasury's take on HAMP's progress—"With nearly one million homeowners paying less each month and the number of permanent modifications steadily rising, HAMP is doing the job it was designed to do," says Phyllis Caldwell, head of the Treasury's Homeownership Preservation Office—that's just complete and utter spin. One million homeowners are not paying less each month—maybe for a short period, but even that's questionable—and HAMP is not doing its job by any stretch of the imagination. Far from it.

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Life in Mortgageland Gets Bleaker

| Wed Feb. 17, 2010 11:47 AM EST

Despite yet more indications the economy is turning up—a slight drop in unemployment, increases in housing starts and manufacturing productivity—the view from Mortgageland remains bleak as ever. The percentage of mortgage delinquencies, or people 60 days or more late on their payments, increased in the 2009 fourth quarter for the 12th straight quarter. In 4Q 2009, almost 7 percent of borrowers were delinquent on their mortgages, an all-time national record. This delinquency statistic, seen as a precursor to foreclosure, was up from 6.25 percent the previous quarter and, more troublingly, up from 4.6 percent a year ago—a 50 percent jump from last year to now.

A few more interesting statistics from TransUnion, who released the data. The average national mortgage debt continued to increase, now at $193,690 up a hair from $193,121 in 3Q 2009 and from a year before $192,789. The place with the highest average mortgage debt: My very own District of Columbia, at a whopping $372,869 per person. This data, especially the ever-rising delinquency totals, further confirm (as if you needed more confirmation) that efforts at recovery in the housing industry—say, the Obama administration's $75 billion bust, the Home Affordable Modification Program—just aren't doing the job, as millions of people across the country are without jobs and stuck with homes for which they owe far more than their house is worth. The foreclosure crisis is an intractable problem, an ongoing headache, and right now there's little light at the end of the tunnel.

Ahmed Chalabi Strikes Again

| Wed Feb. 17, 2010 11:15 AM EST

Ahmed Chalabi, the conniving Shiite Iraqi politician who likely fed US officials bad intelligence before the Iraq war, is up to his old tricks yet again. Chalabi's latest controversy, the New York Times reported today, is one of two politicians blocking candidates in Iraq's upcoming parliamentary election with ties to Iran. The top US commander in Iraq, Gen. Ray Odierno, told the Times that Chalabi and Ali Faisal al-Lami, one of Chalabi's aides, are "clearly influenced by Iran" and that the US has "direct intelligence that tells us that." Odierno said Chalabi and al-Lami have had several meetings in Iran, including one with an Iranian on the US' terrorist watch list. The parliamentary blocking manuevers are an ongoing controversy in Iraq—the blockers say they're trying to purge candidates with former ties to Saddam Hussein, while blacklisted Sunnis say the block is sectarian-fueled and the result of outside pressure from countries like Iran. What's for certain is debacle's potential to undermine Iraq's elections next month.

For Chalabi, these allegations are merely latest twist in the long, strange journey of a brazen, amibitious, crooked man. From influential lobbyist and darling of Congress to arbiter of false intelligence and opportunist in the wake of Saddam's fall, no narrative of the Iraq war is complete without Chalabi, his manipulation of US leaders, and his illusions of grandeur as the new leader of a liberated Iraq—a vision, of course, that never came true. Now, in the latest act of a bad drama that won't end, Chalabi is allegedly doing the bidding of an increasingly dictatorial and militaristic country to undermine Iraq's early slivers of democracy and one of Obama's few foreign policy successes. He is, in short, the headache that just won't go away for American foreign-policy leaders.

Failing Big Banks? Euthanize 'Em!

| Tue Feb. 16, 2010 10:54 AM EST

Paul Volcker, the former Federal Reserve chairman and Obama ally in reforming Wall Street, went on CNN this weekend to explain why tough financial reform should involve a bank "euthanasia" process. By euthanasia, Volcker essentially means a wind-down, liquidation process for when a too-big-to-fail bank—say, Citigroup—teeters on the brink and threatens to topple much of the financial markets. "There ought to be some authority that can step in, take over that organization and liquidate it or merge it—not save it," Volcker told CNN's Fareed Zakaria on Sunday.

Of course, this kind of financial euthanasia offers more than just a resolution process for the next great Wall Street meltdown. It also eliminates what people like Volcker and financial watchdog Elizabeth Warren call the "moral hazard" in the financial markets in which, as Volcker described, "people think they're going to be rescued and, therefore, will take risks that they shouldn't be doing." Dangling a so-called euthanasia process over banks' heads strips away the government guarantee that banks who take too many risks and implode because of those risks will always be backstopped by taxpayer funds. It's a plan Volcker has been pushing since he emerged on the financial-reform scene in the past year or so, and Obama so far seems to be support some kind of bank wind-down process. "You get very aggressive traders, and they're out there," Volcker said. "Millions of dollars are at stake, and personal bonuses, so they have a real incentive to take risks, which is fine, if you're not being protected by the government."

Obama v. FDR

| Thu Feb. 11, 2010 4:43 PM EST

Not long after Scott Brown, a nude model turned U.S. Senator, and his Tea Party cohort rode the public’s growing disquiet and the candidate’s everyman truck into office, you could hear the shift in Barack Obama’s voice. Out went the cool, detached president, and in came a new populism and a leader who had lost his elitist "g”s and now talked about "leakin’" roofs and "buyin’" new curtains, who spent time walkin’ the shop floor and rollin’ up his shirtsleeves. In Elyria, Ohio, he exhorted a town-hall crowd with how hard he’s been fightin’—so hard, in fact, that he repeated the word 14 emphatic times.

Rhetorical fisticuffs aside, Obama the Populist had by now essentially sidelined health care and climate change for a far narrower focus in 2010: jobs. In his State of the Union Address, he held up the nearly $800 billion stimulus bill as evidence of his job-creating bona fides, and laid out a new $30 billion small-business initiative using repaid bailout cash to boost hiring and wages. "Jobs must be our number-one focus in 2010" was his mantra.

The president’s recent jobs "surge," however, does little more than tilt feebly at fixin’ the country’s dismal employment landscape. Sendin’ funds to community banks to provide credit and cuttin’ taxes for businesses, as Obama proposes, are at best indirect and modest routes to creatin’ new jobs or savin’ existing ones. No indirect program of this sort is going to quickly lower an official unemployment rate hovering near 10%, with underemployment at 17%, and record numbers of people jobless for 27 weeks or more.

Looking back on Obama’s first year, there’s little to suggest he’s up to the jobs task. The stimulus, for instance, reportedly paid for around 600,000 jobs in the fourth quarter of 2009, and around 1.2 million jobs since its creation—nothing to scoff at, but scant enough improvement in the face of 2.6 million jobs lost in 2008 and nearly 4 million in 2009. Compared to presidential forebear Franklin Delano Roosevelt, who galvanized the nation during the Great Depression with truly popular direct public-works programs that created millions of jobs, Obama’s record is paltry indeed.

To read a post by Steve Fraser about "The New Deal in Reverse," click here. To catch him in an audio interview discussing why Obama has ignored the jobs model Roosevelt pioneered, click here.

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