Homeowner Bailout

President Obama unveiled his homeowner bailout plan today.  The first provision is aimed at motivating mortgage servicers to offer underwater homeowners improved loan terms:

Servicers can receive an up-front payment of $1,000 for each eligible loan modification that meets certain criteria. The government said it would pay servicers $500 and mortgage investors $1,500 if at-risk loans are modified before borrowers fall behind. The government said it would also help pay down the principal of certain mortgages by up to $1,000 a year for up to five years if the borrower doesn't miss any payments.

Hmmm.  Loan servicers already have an incentive to rework loans that would otherwise go into default, and for the most part they aren't doing it.  Will a couple thousand dollars change their internal calculus?  Offhand, it doesn't sound like enough to really make a difference — though another provision of Obama's plan adds a stick to the carrot, by allowing bankruptcy judges to unilaterally alter mortgage terms.  So it's possible that the carrot and the stick together will have a noticeable impact.

The second major part of the program is aimed at lowering interest rates on underwater loans:

Finance companies cannot currently refinance a loan if the homeowner owes more than 80 percent of the home's value. But under the plan, Fannie and Freddie — which were taken over by the government last year — would be able to refinance a mortgage if it does not exceed 105 percent of the current value of the property. For example, if the value of the borrower's property is $200,000, but the homeowner owes $210,000, he or she could still qualify for the program.

This sounds promising.  If the interest rate reductions are significant, it could provide some serious help to homeowners.  It will also help arrest the slide in home prices, which might be a worthwhile goal at this point.  It's true that house prices are still too high and need to fall further, but Obama's program most likely won't have a serious effect for another six months at least, and by that time we might be at risk of house prices overshooting on their way down.  A program that pushes against that tide could end up being a good countercyclical tool.

Ah, the use of front groups by the Big Business lobby. Always so much fun. Here's the latest example, spotted by the Center for Responsive Politics' Public Integrity's blog, PaperTrail, when it investigated this online advertisement against Labor Secretary-designate Hilda Solis:

 

Clicking on the ad takes you to a petition against Rep. Solis' nomination, which is hosted on the website of "Americans for Job Security." While it’s hard to find anyone these days who would be against job security, the claim that Solis is “anti-worker” doesn't seem to jibe with endorsements from the AFL-CIO, SEIU, and other unions.

 

As it turns out, Americans for Job Security is actually a spin-off of the U.S. Chamber of Commerce, the nation's most robust business affiliation that has traditionally worked to elect conservative, pro-business politicians and judges is one of the strongest anti-union voices in American politics. The group also lobbied heavily against the Employee Free Choice Act legislation that Solis co-sponsored in 2007 as a member of Congress.

The Chamber of Commerce also says it is committed to "address[ing] energy, security, and climate change challenges," but in reality, it orchestrates a campaign of misinformation on the issue of climate change that seeks to kill the most drastic (and likely most necessary) legislation in favor of business-friendly alternatives. I don't doubt that the Chamber does a lot of good work, particularly for small businesses. But on issues like labor and global warming, it is part of the problem.

Report: FDA Ignores Safety Regs, Risks Lives

From last year's outbreak of salmonella-tainted tomatoes, to an internal analysis (PDF) warning the agency can't adequately regulate new medical devices or protect the safety of the nation's food supply, all the bad publicity the Food and Drug Administration has earned in the last two years revealed an agency plagued by lack of funding and incompetence.

A report released Wednesday by Project on Government Oversight, a Washington-based watchdog group, adds another item to the list of bad ink for the FDA, this one a product of downright negligence.

Bailing Out Detroit

The latest from Detroit:

The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.

....The deteriorating finances of the two companies present the Obama administration with two options, neither of them appealing  It can provide the money in the hopes that the companies will stabilize, and no longer have to keep pushing workers into a growing pool of people without jobs....But if the federal government balks at the automakers’ requests, that would mean the two companies probably would have no choice but to file for bankruptcy protection, because they are losing hundreds of millions of dollars each month.

Hell's bells.  What to do?  I mean, does anyone believe this is the end of the bailout requests?  I certainly don't, and I doubt anyone else does either.  On the other hand, the alternative is allowing GM and Chrysler to fail in the middle of a recession.  Nobody wants that.  But on the third hand, even if we bail them out, what are the odds that they can survive in the long term anyway?

In the end, I suppose we'll continue bailing.  But this whole process shows up one of the big pitfalls of government action like this.  My own guess — and this is obviously just a personal hunch — is that while GM is at least arguably salvagable, Chrysler is a hopeless basket case.  So if we're going to do anything, we should probably bail out GM but let Chrysler go under.  That would save the taxpayers some money and reduce overcapacity in the auto industry at the same time. Unfortunately, politics being what it is, the Obama administration probably feels like they can't pick winners and losers and needs to treat them both equally.

This is almost certainly dumb, but it's what's most likely going to happen.  So the American public will end up pumping $10 or $20 billion into Chrysler in order to help it become, basically, the North American subsidiary of Fiat — a partnership that does the U.S. auto industry little good and will itself almost certainly crumble and fail before long in any case.  What a mess.

Film: The Untold Story of Black New Orleans

When people think of New Orleans, they think of the French Quarter, the booze and loud-mouthed shenanigans of Bourbon Street, the balconies and art galleries of Royal Street, the brilliant simplicity of St. Louis cathedral and the statue of Andrew Jackson before it. And, of course, Hurricane Katrina. People don't think about the Tremé.

This month, PBS airs Faubourg Tremé: The Untold Story of Black New Orleans. The film, by Dawn Logsdon and Lolis Eric Elie and produced by Wynton Marsalis and Stanley Nelson, tells the story of the historically black neighborhood, a story that needs telling: In New Orleans, the civil rights movement went down a little different. In Louisiana, slaves could earn money to buy their freedom. They moved into the Tremé and established the oldest black neighborhood in the United States, where they created the first African American daily newspaper, L'Union, and worked for racial equality. A century before Rosa Parks, African Americans in the Tremé sat where they liked and even commandeered streetcars if whites wouldn't allow them a seat. After the Civil War they made enormous gains toward equality—desegregating schools, voting in record numbers, and electing a black governor.

Facebook's Privacy Faceoff

What are you doing right now?

If you're Facebook CEO Mark Zuckerberg, your answer is probably "backtracking." That's because many of Facebook's 175 million users, who are encouraged to answer that same question whenever they log in, have been in an uproar over how Facebook might use their replies, and any other information they post on the site. Two weeks ago, Facebook altered its privacy policy, deleting a provision that said users could remove their content from the site at any time, at which point its license would expire. Facebook's decision to retain the rights to users' posts even after they're deleted fanned fears that any leak, indiscretion, or misstatement on the popular social networking site could be immutable. The protests were so fierce that Zuckerberg reversed himself this morning, reverting to Facebook's old privacy policy until the site resolves how information posted on the site is controlled. 

"This is one more way one can be 'screwed,'" Facebook user Misty Rain wrote Tuesday on the wall of the new group, Facebook Privacy, one of several groups formed on the site to protest the change. She described the ordeal of trying to get Facebook to remove photos that had been taken from her site and used in "slanderous ways" by stalkers. "I wonder how old markie [Mark Zuckerberg] would like it if someone took his picture, altered it very slightly and posted it on extremely questionable groups," she went on. "Perhaps it is only those who can shit money who will be protected."

Performance Bleg

A question for y'all: how's the performance of our site these days?  I use Firefox and Windows XP and my performance is sort of sluggish, but not wildly so.  Maybe 10 seconds to load the first few posts on the blog and another 10 or 15 seconds to finish loading the whole thing.  How about you?  Better?  Worse?  Is load time consistent or does it bounce around a lot?

Kanye West Can't Stop Saying "Gay"

I love you Kanye, but jeez, you're turning into one of those well-meaning types who overdo it and embarrass us all. The rapper/musician/fashion designer gave an extensive interview with Details magazine recently in which he proposed taking back the word "gay" from its negative connotations, as in, "that's so gay." Okay; so far, so good, right? Well, then he kept talking:

In the past two, three years, all the gay people I've encountered have been, like, really, really, extremely dope. Y'know, I haven't, like, gone to a gay bar, nor do I ever plan to. But where I would talk to a gay person--the conversation would be mostly around, like, art or design--it'd be really dope. From a design standpoint, kids'll say, 'Dude, those pants are gay.' But if it's, like, good, good, good fashion-level, design-level stuff, where it's on a higher level than the average commercial design stuff, it's, like, gay people that do that. I think that should be said as a compliment. Like, 'Dude, that's so good it's almost . . . gay.'

So, gay people are dope, but you wouldn't go to a gay bar ever in your life, but talking to them is fun, but as long as it's about color combinations and fabric choices? Sigh. Well, at least he's doing better than 50 Cent, who called Kanye "tri-sexual" in an interview with MTV News, although he seemed reassured about West's sexuality because he knows somebody who "knows a girl who knows Kanye." Glad that's settled.

Is This Site Slow?

As you know, we relaunched our site a few days ago—and like all such endeavors, this one comes with the occasional hiccup. We're trying to closely monitor site performance--how fast pages load, whether anything looks broken, etc. And we need your help. If you see any problems, could you let us know in the comments? The more specific the better; if you can include the browser and operating system you're on, that would be great. As a nonprofit shop, we can't afford a slew of dedicated coders, so your help is greatly appreciated and keeps our resources flowing to the journalism.

Vitamins

Everyone needs vitamins.  Too little Vitamin C and you get scurvy.  Not enough B1 and you come down with beriberi.  But even a halfway balanced diet provides you with enough essential nutrients to avoid vitamin deficiency diseases, so scurvy and beriberi aren't things for most of us to worry about. A more important question for us developed world types is, Can large doses of vitamins help prevent other chronic conditions, like cancer and heart disease?  The New York Times says no:

The latest news came last week after researchers in the Women’s Health Initiative study tracked eight years of multivitamin use among more than 161,000 older women. Despite earlier findings suggesting that multivitamins might lower the risk for heart disease and certain cancers, the study, published in The Archives of Internal Medicine, found no such benefit.

Last year, a study that tracked almost 15,000 male physicians for a decade reported no differences in cancer or heart disease rates among those using vitamins E and C compared with those taking a placebo. And in October, a study of 35,000 men dashed hopes that high doses of vitamin E and selenium could lower the risk of prostate cancer.

....“I’m puzzled why the public in general ignores the results of well-done trials,” said Dr. Eric Klein, national study coordinator for the prostate cancer trial and chairman of the Cleveland Clinic’s Glickman Urological and Kidney Institute. “The public’s belief in the benefits of vitamins and nutrients is not supported by the available scientific data.”

Eating leafy greens is good for you, but apparently getting megadoses of the same vitamins in pill form doesn't do squat.  In fact, they even have some negative side effects.  Bottom line: have a salad tonight and skip the multivitamins.