Tag Archives: housing

Submerged State

submergedstateNew Orleans   A frequent theme in the years leading up to the complicated and star crossed rollout of the Affordable Care Act or Obamacare among the pundits, editorial writers, and commentators tried to nick the President for his weak kneed efforts to “sell” the program to the American public.  Reading Cornell Professor Suzanne Mettler’s Submerged State:  How Invisible Government Policies Undermine American Democracy, you get a better idea of not only the entrenched interests that have to be conquered to achieve any changes but also the codependency of both parties and virtually all politicians in hiding the hands of government on the real levers leading to such critical confusion that democracy itself is endangered.  In short, it’s hard to sell a product that is almost deliberately designed to be obscure.

            Mettler takes her starting point at the Tea Party absurdity of people yelling at politicians that they hate Obamacare but wanted the federal government to keep its “hands off my Medicare,” seemingly not realizing that Medicare is of course a federal program.  She marshals extensive evidence, easily available, that the complexity of government programs is such that the vast majority of Americans are also unclear that Social Security is a government program as well, even though we have now had such a federal program since 1935, a full 46 years after Germany created the first government retirement scheme.  

If Mettler were writing her book now, she as likely would have combined the farcical Medicare point with Obama’s apology for his blanket promise that, “if you liked your current policy, you can keep it,” without spending the time and trouble to explain that he was specifically not talking about the total ripoff, though sometimes cheap, policies that some people had that are vastly inferior to the requirements of Obamacare.  In this case a man had to bite the dog as well, since Obama’s one-year extension allowing these fake policies another year of life given all of the rollout troubles, severely weakened the transition required under the Affordable Care Act to such a degree that a number of state insurance commissioners refused to go with the President’s change.  Mettler would have quickly pointed out that this stumble was due to an unwillingness to confront the “submerged state” represented by the insurance companies and call them out for selling crap in the name of real protection.  Needing their acquiescence and that of their hordes of lobbyists, the President was eating crow when he should have been spitting fire.

It’s hard to argue with Mettler.  If you conceal how things really work and what they really cost and who really benefits, because having the people understand how things really work might mean the deluge, then getting them to fully understand and act under a democracy is more and more daunting.  Her argument is a healthy antidote even to the “nudgers” and “default option” approval advocates among behavioral, libertarian paternalist economists, who mean well, but are also trying to “hide the hand that throws the rock” in their case for “peoples’ own good” perhaps, but for those of us still holding out hope for democracy, it’s another rock to push up the hill.


Is it Possible that Judges are Finally Fed Up with Banks Breaking Bad?

FIGHTING-FORECLOSURE-PHOTOToronto   After years of big banks essentially flipping off their customers and borrowers fighting foreclosures in no small measure because banks were more than willing to take the money and run on the government’s bailout, but were heedless of the damage they were doing to their borrowers’ lives and communities, Gretchen Morgenston in the New York Times reported several cases of judges finally being in on the game and being as sick of it as the rest of have been for years.

I particularly loved the case she cited where a judge has ordered Wells Fargo to produce a corporate resolution signed by its CEO and board saying that they have knowledge and approve of the conduct of their lawyers.   Having dealt with the two-faces of Wells Fargo for years in instance after instance where they seem willing to do anything to keep from settling now matter how egregious the bank’s conduct is, I loved the report that the judge raised the issue in that case of the huge gap between the bank’s advertising and their predatory, corporate culture.

In another case she cited a judge who ordered Bank of  America and its services to stop harassing a borrower who had successfully gone to bankruptcy court to clear the debts on their mortgages, though the harassment of the bank’s agents continued nonstop and unabated.   The judge ordered the bank pay the borrowers $10,000 per week until it stopped.   Eventually that family will be able to buy a new house with cash, because the bank doesn’t seem to know how to stop.

Though she didn’t mention it, the fact that the arrogant JP Morgan Chase and its CEO Jamie Dimon also have to come up with billions because they thought they were a law unto themselves is also gratifying.

Maybe the feds and the judges will finally crawl out of the pockets of the bankers and give us some justice. As for the bankers, they best get the message, because they were lucky in this mess not to have to do time, but with their record of misbehavior continuing, it seems like it’s only a matter of luck and timing that more of them are not behind bars, and that’s the fire next time.