Kevin Drum

Help Coming for Homeowners?

| Thu Aug. 5, 2010 11:19 AM EDT

The Obama administration's program to address home foreclosures, HAMP, has been a pretty dismal failure. Only a small fraction of the money allocated to help homeowners has been spent and only a few hundred thousand loans have been modified. So what's next? James Pethokoukis passes along the latest dirt:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages — one in five — are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

....Keep in mind the political and economic context. The nascent recovery is already running out of steam....The president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.

Maybe this happens, maybe it doesn't. But it would sure be an improvement over spending the money on "foreclosure mills," as Fannie and Freddie do now:

The business model is simple: to tear through cases as quickly as possible. (Stern's company handled 70,382 foreclosures in 2009 alone.) This breakneck pace stems from how the mills get paid. Rather than billing hourly, they receive a predetermined flat fee for the foreclosure — typically around $1,000 — plus add-ons for each of the related services. The more they foreclose, the more they make. As a result, consumer attorneys and legal experts say, even families who have been foreclosed upon illegally—and who can afford to make good on their mortgages—end up getting steamrolled. "It's 'How fast can I turn this file?'" says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, DC. "For these guys, the law is irrelevant, the process is irrelevant, the substance is irrelevant."

That's from Andy Kroll. Read the whole thing.

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Prop 8 and the Courts

| Thu Aug. 5, 2010 10:32 AM EDT

Matt Yglesias on yesterday's court ruling that tossed out California's ban on gay marriage:

Whenever a favorable-to-progressives judicial ruling come down, the concern trolls come out of the woodwork to fret about the backlash. So in the wake of a win for the left on Proposition 8 in California, I wanted to go on record alongside Ryan as thinking such concerns are, when genuine, wildly overblown.

The American political system has a lot of features that differentiate it from most modern liberal democracies. These features include an unusually large number of veto points and also a greatly empowered federal judiciary. I’m not a huge fan of either feature, but the system is what it is and the interplay between the two means that responsible political advocates will always want to use all the levers at their disposal — including litigation — in order to get their way. Once laws are on the books, overturning them is generally an extremely cumbersome process. Merely persuading most people that you’re right doesn’t do the trick. And the system doesn’t really function in a “majoritarian” way at any level so the non-majoritarian aspects of seeking policy objectives through the courts don’t differentiate them from anything else.

I agree. There's no doubt that judicial decisions create backlashes, but the evidence is pretty thin that they create backlashes that are any worse than legislative or executive decisions. For better or worse, everyone involved in the American politics is now well aware that courts are an important part of the political process and they're fair game to be exploited as effectively as possible. That's just the way things are, and both sides play the game equally hard.

In this case, however, there's a different concern: using the judicial system might be perfectly kosher, but was it wise? The answer is: only if you win. And there are pretty substantial doubts that yesterday's victory will hold up all the way to the Supreme Court. Judge Walker's mountainous finding of facts aside, do we really think the Supreme Court is ready to rule that every state in the union is required to allow same-sex marriage? Maybe! But the odds seem long, and if we lose the case it's likely to be a decade or two before the court is willing to reconsider.

In the end, that might not be so bad. There's still a chance of winning, and a loss only means that we go back to state-by-state battles, which is exactly where we are now. But it's still a key question.

Gay Marriage and Justice Kennedy

| Thu Aug. 5, 2010 12:53 AM EDT

Dahlia Lithwick says Judge Vaughn Walker's ruling today in the Proposition 8 case was a triumph of "science, methodology, and hard work." Personally, I would have preferred an opinion that was based a little less on a mountain of science and methodology and a little more on a mountain of compelling legal doctrine, since that's what's going to matter when this case gets to the Supreme Court. Still, Lithwick does point out something else interesting about Walker's decision: he relies a lot on arguments that seem designed to appeal to Justice Anthony Kennedy:

I count — in his opinion today — seven citations to Justice Kennedy's 1996 opinion in Romer v. Evans (striking down an anti-gay Colorado ballot initiative) and eight citations to his 2003 decision in Lawrence v. Texas (striking down Texas' gay-sodomy law). In a stunning decision this afternoon, finding California's Proposition 8 ballot initiative banning gay marriage unconstitutional, Walker trod heavily on the path Kennedy has blazed on gay rights: "[I]t would demean a married couple were it to be said marriage is simply about the right to have sexual intercourse," quotes Walker. "'[M]oral disapproval, without any other asserted state interest,' has never been a rational basis for legislation," cites Walker. "Animus towards gays and lesbians or simply a belief that a relationship between a man and a woman is inherently better than a relationship between two men or two women, this belief is not a proper basis on which to legislate," Walker notes, with a jerk of the thumb at Kennedy.

Kennedy, of course, might possibly be the swing justice when this case gets to the Supreme Court, so this could be a pretty effective tactic. Maybe that mountain of facts has an audience after all.

A Chinese Bump in the Road

| Wed Aug. 4, 2010 8:09 PM EDT

This doesn't sound good:

China’s banking regulator told lenders last month to conduct a new round of stress tests to gauge the impact of residential property prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said....Previous stress tests carried out in the past year assumed home-price declines of as much as 30 percent.

The tougher assumption may underscore concern that last year’s record $1.4 trillion of new loans fueled a property bubble that could lead to a surge in delinquent debts. Regulators have tightened real-estate lending and cracked down on speculation since mid-April, after residential real estate prices soared 68 percent in the first quarter from a year earlier.

This comes via Ryan Avent, who says:

Whatever it means for China, it's unlikely to be good for the rest of the world. China is likely to try and innoculate itself against a housing-driven slowdown by turning up the support for exporters while the financial fall-out settles. If it does, it will siphon demand away from other economies. But if it doesn't, the housing hit to China's economy will be more severe, which will have much the same effect — a reduction in the demand boost from China to the rest of the world.

It may just be a bump in the road to global recovery, but every bump is a big one these days.

Bumps make me very, very nervous these days.

Prop 8 Unconstitutional — For Now

| Wed Aug. 4, 2010 5:18 PM EDT

Judge Vaughn Walker has released his long-awaited opinion on the constitutionality of California's Proposition 8, which bans gay marriage: in a nutshell, it's not. There's no rational basis for prohibiting same-sex marriage, he ruled, and therefore it violates both the due process and equal protection clauses of the 14th amendment of the U.S. constitution. The full opinion is here.

But as we all know, his ruling per se doesn't matter. It will be appealed to the Ninth Circuit Court shortly, and after that it's sure to be appealed to the Supreme Court. What's more, a stay is likely in the meantime. So the question is, how compelling is his opinion? Is it likely to sway members of either the circuit or supreme courts?

I am nothing close to a legal expert, so feel free to ignore what follows even more than usual. But I have a feeling the answer is no. The problem is that Walker's ruling relies very, very heavily on the factual evidence provided by each side's expert witnesses. But he obviously didn't think much of the witnesses called by the defense:

[P]roponents in their trial brief promised to “demonstrate that redefining marriage to encompass same-sex relationships” would effect some twenty-three specific harmful consequences. At trial, however, proponents presented only one witness, David Blankenhorn, to address the government interest in marriage. Blankenhorn’s testimony is addressed at length hereafter; suffice it to say that he provided no credible evidence to support any of the claimed adverse effects proponents promised to demonstrate.

....Blankenhorn offered opinions on the definition of marriage, the ideal family structure and potential consequences of state recognition of marriage for same-sex couples. None of Blankenhorn’s opinions is reliable....[T]he court finds that Miller’s opinions on gay and lesbian political power are entitled to little weight and only to the extent they are amply supported by reliable evidence.

So the proponents' expert witnesses were, to put it bluntly, just a couple of hacks. Conversely, Walker says, he was very impressed with the plaintiff's expert witnesses. Then, following a list of 80 findings of fact, he ruled that prohibition of same-sex marriage was plainly unconstitutional:

To determine whether a right is fundamental under the Due Process Clause, the court inquires into whether the right is rooted “in our Nation’s history, legal traditions, and practices.”....Never has the state inquired into procreative capacity or intent before issuing a marriage license....Race restrictions on marital partners were once common in most states but are now seen as archaic, shameful or even bizarre....The marital bargain in California (along with other states) traditionally required that a woman’s legal and economic identity be subsumed by her husband’s upon marriage under the doctrine of coverture; this once-unquestioned aspect of marriage now is regarded as antithetical to the notion of marriage as a union of equals....The evidence did not show any historical purpose for excluding same-sex couples from marriage, as states have never required spouses to have an ability or willingness to procreate in order to marry. Rather, the exclusion exists as an artifact of a time when the genders were seen as having distinct roles in society and in marriage. That time has passed.

Italics mine. This strikes me as an Achilles heel in his opinion, since it suggests that if you think genders still have any distinct role in society at all, then there's a rational basis for prohibiting same-sex marriage. I'm guessing there are at least five Supreme Court judges who think that. But Walker doesn't: "The court defers to legislative (or in this case, popular) judgment if there is at least a debatable question whether the underlying basis for the classification is rational." He then goes on to rule not only that the plaintiffs made a better case, but that it's hardly even a debatable case:

Proposition 8 cannot withstand any level of scrutiny under the Equal Protection Clause, as excluding same-sex couples from marriage is simply not rationally related to a legitimate state interest. [Italics mine.] One example of a legitimate state interest in not issuing marriage licenses to a particular group might be a scarcity of marriage licenses or county officials to issue them. But marriage licenses in California are not a limited commodity, and the existence of 18,000 same-sex married couples in California shows that the state has the resources to allow both same-sex and opposite-sex couples to wed.

This is....a bit glib, no? Obviously no one is suggesting that California lacks the printing capacity to produce more marriage licenses. And then the final paragraph:

Proposition 8 fails to advance any rational basis in singling out gay men and lesbians for denial of a marriage license. Indeed, the evidence shows Proposition 8 does nothing more than enshrine in the California Constitution the notion that opposite sex couples are superior to same-sex couples. Because California has no interest in discriminating against gay men and lesbians, and because Proposition 8 prevents California from fulfilling its constitutional obligation to provide marriages on an equal basis, the court concludes that Proposition 8 is unconstitutional.

Needless to say, I agree with every word of this. It's an exhilarating and heartening ruling and I hope the Ninth Circuit Court and the Supreme Court uphold it unanimously. But at the appellate level, the expert opinions offered in the case aren't going to be especially relevant, and that's almost entirely what Vaughn based his ruling on. What's more, Vaughn went even further, clearly displaying his contempt both for the defense's witnesses and for its decision not to bother contesting the facts, and that contempt might come back to bite him. In the end, he essentially ruled that bans on same-sex marriage are nothing more than an "artifact" of history, and I have severe doubts that this is going to withstand scrutiny. At the Supreme Court level, the briefing attorneys won't be limited in their presentation of the law, and all they have to do is show some rational reason for existing bans. It doesn't have to be a great reason, and it doesn't have to be a reason that anyone mentioned at the district level, just one that's not plainly looney. I'm not sure that Vaughn was persuasive in ruling that no such reason exists.

I hope I'm all wet about this. Obviously district courts rule on facts and appellate courts rule on the law, so maybe I'm making too much of this. But my guess is that none of the expert testimony in this case is going to make a whit of difference at the Supreme Court, and without that it's not clear the ruling can be sustained. We'll see.

Defunding Healthcare

| Wed Aug. 4, 2010 4:01 PM EDT

Apparently the latest Republican brainstorm on healthcare reform — assuming they win control of the House in November — is to pick out bits and pieces of the legislation and refuse to fund them. Austin Frakt is worried:

Make no mistake, repeal by purse strings could create a mess. The law has many moving parts that act together to create a sensible, complete whole. And implementing a piece of legislation as complex as the ACA requires fully funding the agencies that oversee it. So, this strikes me as the most politically viable, serious attack on health reform.

....The combination of “savings” created by failing to fund implementation and tax cuts is likely to appeal to the Republican base. Keep in mind that the ACA does very little for the broad middle-class of voters who are covered in the large-group market. In these hard economic times, such voters may prefer some money in their pockets than additional spending on a program for which they expect little benefit. (Of course losing one’s job jeopardizes one’s insurance so the ACA really does add a meaningful layer of protection for all Americans.)

So, I worry about this. The legislation may be Democratic sausage, but I prefer it to the Swiss cheese the Republicans intend to dish up.

I wonder how this plays out politically? Even a landslide would only give the GOP a small majority, maybe five or ten seats, which means they'd have to keep party discipline almost 100% waterproof in order to do this. Could they pull that off?

Maybe. But minority parties have a much bigger incentive to stick together than majority parties do: the cost is zero and the PR is good. But what happens when they're running things? If Democrats can find even a dozen Republicans who aren't quite willing to make a hash out of healthcare for real — as opposed to just talking about it — then funding is safe. And they might. Talking smack is one thing, but there are still a few non-bomb-throwers on the GOP side who might flinch at voting for the real-world chaos this would produce.

Alternatively, this will all be moot because America will step back from the brink on November 2nd and have second thoughts about turning the country over to the lunacies of the tea party. For now, this is still my guess. Dems will lose 30-35 seats and maintain very narrow control of the House. I can't say I'm willing to put any money on this prediction, though.

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14th Amendment Crackpottery

| Wed Aug. 4, 2010 1:12 PM EDT

The folks at First Read are gobsmacked:

Out of touch? By now, you've probably heard about the GOP push — embraced by Mitch McConnell, Jon Kyl, and even John McCain and Lindsey Graham — to hold Senate hearings into whether the 14th Amendment should be amended. At issue: the 14th Amendment granting automatic citizenship rights to anyone born in the United States, even the offspring of illegal immigrants. Just askin, but do these Republicans want to be tied to wanting to change this historic, post-Civil War amendment, which made former slaves and their children full citizens in this country? At a time of 10% unemployment and two wars, do politicians really want to debate a Constitutional Amendment from the 19th century? For the GOP, does this help them with their problem at wooing non-white votes? This seems a tad tone deaf; it may be popular with folks who listen to talk radio or watch evening infotainment debate shows but really?

As a friend says, "Yes, Really." But look: there's no mystery here. Republicans know perfectly well this isn't going anywhere, but they also know that symbolic issues like this are great for firing up their base. People like me scratch our chins and wonder why their base falls for this schtick so regularly when Republicans never follow up on this stuff, but that's not the point. The point make a point. They're just signalling to their base that their hearts are in the same place and their values are aligned. And that's good politics.

Democrats, as critics like Drew Westen routinely point out, aren't as good at this. This might have something to do with the liberal temperament, but I sort of doubt it. More likely, it's just that the liberal base is smaller. When Republicans pander to conservative hot buttons, they're pandering to something like two-thirds of the party. When Democrats do it they're pandering to about a third of the party. So the arithmetic is simple: for Republicans this kind of pandering is a winner, probably producing more votes than it loses. Among Democrats it's just the opposite, so they don't do it as much. There's too much risk of offending large numbers of independents, as well as the (still) fairly significant number of conservative Democrats.

As for why the press continues to treat this stuff seriously, I think this is the reason: they know perfectly well that this is just political puffery, but they figure that all's fair in love and politics. Who are they to tell the parties how to pander to their own base? Quite the vicious circle, no?

Facebook Bleg

| Wed Aug. 4, 2010 12:19 PM EDT

This is a small abuse of the blog for purposes of personal mental hygeine, but.....

As part of its campaign to take over the world, Facebook has persuaded more and more sites to install its social networking widget. Unfortunately, beginning on Saturday, it started driving my browser nuts. I finally figured out how to uninstall it on the Washington Post front page, but since then I've noticed half a dozen other sites using it too. Every one of them sends my browser into overdrive, refreshing manically two or three times a second as it tries to figure out what the latest news from all my Facebook buddies is.

Of course, it's only a problem on Opera. Firefox and Explorer work fine. Sigh. Which means no one cares. But maybe someone does! Anyone else having this problem? After a bit of trial and error I've blocked ** and this seems to mostly fix the problem, but I know deep in my heart that it's going to end up causing some kind of unforeseen massive system failure in the future. It always does. Anyone have any advice about how to fix this for real?

Eating Our Seed Corn

| Wed Aug. 4, 2010 11:28 AM EDT

And now, combining yesterday's post about the value of preschool with today's post about federal aid to strapped state budgets, here's the latest news on budget cuts aimed at the worst possible place:

States are slashing nearly $350 million from their pre-K programs by next year and more cuts are likely on the horizon once federal stimulus money dries up, according to the National Institute for Early Education Research at Rutgers University. The reductions mean fewer slots for children, teacher layoffs and even fewer services for needy families who can't afford high-quality private preschool programs.

....Wealthier parents can afford to send their kids to private preschools, but children from poorer families will likely languish in lower-quality childcare that doesn't prepare them for kindergarten, experts said.

....Marci Young, director of the Pew Center on the States' Pre-K Now program, said prekindergarten is the key to helping the Obama administration achieve one of its main goals — improving persistently failing schools. "When you're thinking about turning around low performing schools or making sure you're helping close the achievement gap ... you've got to start in the early years," said Young.

She pointed to studies that show states see a $7 return for every $1 they invest in early education because children who attend prekindergarten are more likely to not need remedial education, to graduate from high school, to go to college and to have higher-paying jobs that produce more taxes.

Sounds like socialism to me! Here in America we prefer nature red in tooth and claw. For poor people, anyway.

Arguing With Conservatives

| Wed Aug. 4, 2010 11:12 AM EDT

Who should liberals be arguing with right now? Option A: the smartest, freshest thinkers on the other side. That's who you should test your ideas against. Option B: actual influential conservatives, since they're the ones who control Congress and determine what happens in the real world.

Smart conservatives think the answer is Option A. And I don't blame them! Hell, I get bored with shooting ducks in a barrel anyway, and it would be great to have more meaningful conversations, stretch our minds a bit, and maybe even raise the profile of the non-Tea Party wing of modern conservatism in the process. The problem is that the non-Tea Party wing is pretty damn small these days, which means that conversations like this pretty quickly take on an air of la-la land. Take this exchange between Ezra Klein, for the left, and Reihan Salam for the NTP right, about a supposed "consensus" among Republicans that they're in favor of federal aid to states as long as states are willing to reform their budgeting processes. Here's Ezra:

When asked to name some legislation, Reihan didn't come up with much. "That is the basic idea behind Sen. Scott Brown’s Fiscally Responsible Relief for Our States Act," Reihan said. But Brown's proposal — a proposal from one of the most moderate Republicans who is representing one of the most liberal states in the union — doesn't have any co-sponsors, so it's hard to see how it represents a consensus....Moreover, making aid conditional on budget reform is not the basic idea behind Brown's bill. Just ask Brown.

....The basic idea behind Brown's bill is that state aid should be funded using preexisting stimulus dollars. That's what he talks about in the video. He doesn't say anything about conditions. And to double-check, I read the bill. Still nothing.

It's possible I'm missing something in the legislative language, but from what I can see, Brown's bill doesn't make aid conditional on state reforms, and it doesn't have Republican co-sponsors. It provides no evidence for the contention that Republicans would happily partner with Democrats on state aid, if only Democrats would embrace more stringent conditions.

My guess is that making aid conditional on states developing fiscally sound long-term budgets is unworkable. It's too hard to define what "sound" means, it would take too long to do it, and it's next to impossible to guarantee that states would stick to their bargains once the crisis has passed. But it would be an interesting discussion. Way more interesting than, say, commenting on Sean Hannity's latest attack on the New Black Panthers.

Unfortunately, you'd have to be happy leading an essentially monk-like existence to do this on a regular basis. In the real world Republicans are mostly yammering about the Ground Zero mosque and other assorted idiocies, not developing creative proposals that address actual problems. Even Paul Ryan's "Roadmap" proposal, which I don't think is nearly as smart as consensus has it, can't get any real support in the Republican caucus. They're too busy pretending that they're going to repeal healthcare reform or get rid of the 14th amendment. Bottom line: I don't demand a huge conservative groundswell before I start blogging about some of these more moderate proposals, but there's got to be some support for them. Otherwise this is just a dorm room bull session.