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Web Letters | The Nation

Web Letter

The trouble with W. Greider and other naïve liberals is that they still believe the Dems are part of the left and a force for change.

cristobal senior

New York, NY

Jun 9 2009 - 11:03pm

Web Letter

I don't see how any bankruptcy judge could simply modify the terms of an existing mortgage without violating essential contract law. Mortgage modification should require both parties to legally agree and sign off to the terms.

Before we accept the charge of usury against the credit card industry, we need to look at the full balance sheet of the issuers. Factors such as loan-processing costs should be included, in addition to the duration that customers typical carry outstanding balances. You can have many borrowers paying off their loans in full after a few pay periods. If you pay off a 26 percent interest loan after six weeks, that only amounts to 3 percent total interest.

If these so-called lenders ceased making loans, the borrowers might have no choice but to seek out loan sharks, who would impose more stringent terms for its late-paying customers.

I think we need banking reform that mandates full disclosure of loan terms in large print.

Steven Kalka

East Rockaway, NY

Jun 9 2009 - 2:51pm

Web Letter

Any honest accounting would have to put interest rates in terms of "inflation plus." If inflation is running at 20 percent, compounded, then any loan at only 40 percent is actually losing money very badly.

That's simple arithmetic. If those who hold our bonds start to calculate real-term losses, they will dump them. New bonds would have to have much higher rates.

This is one huge flaw in Obama's overspending. He can't spend much more than the bond buyers, foreign and domestic, are willing to buy. Rather, spending must be cut sharply.

Second, this issuance of bonds shifts money from "the people" to those people and institutions that receive the interest cash.

Under Bush, the US was criticized as being "out of step" with the rest of the world. Obama needs to learn from that before things get worse, because that appears to be his process.

John D. Froelich

Upper Darby, PA

Jun 9 2009 - 12:04pm

Web Letter

Nation readers are exactly the audience that needs to read and contemplate Mr. Greider's words.

In fact, one might even say that liberal democrats have had way too much patience (or too little backbone) to critique and act on the issues boiling over at this very moment: single-payer healthcare, the wars, the plunder of the nation's financial resources by Wall Street, the slash-burn-extinction direction of the planet (showing up on earth day is not enough).

The Green Parties of Europe are surging by way of the European Parliament elections. I'm be anxiously waiting for the Nation article on this. And who knows, maybe liberals and progressives in the US will reconsider their unflinching obedience to the Dems... start building the Greens (yes, in your own town or neighborhood).

Ed Bortz

Pittsburgh, PA

Jun 9 2009 - 8:50am

Web Letter

I found the article to be spot on. In 1980 I was a legislative clerk of an assembly committee in Wisconsin and the committee dealt with removing the interest rate cap on consumer loans. I remember the position from the consumer advocates that such action would result in the banks running wild with excessive charges and fees. That was the time of Reagan, and Wisconsin had just elected a Republican governor, Lee Dreyfus.

The caps came off consumer loans and the political heat is too much to place them back on the financial institutions. In Wisconsin rent-to-own and payday loans followed. Now that industry flourish in the country. For an organized society to allow this to happen is immoral.

I think your analysis of "when will the opportune time arrive to fix this injustice, given the banking mess, if not now" is indicative of the relationship between power and politics.

Obama and the Democrats will see their fortunes diminish quickly if proper regulations are not enacted in the financial sector to aid the recovery and guide the industry. No recovery will occur without comprehensive reform, banking, mortgages, consumer loans and accountability. The politicans must be held accountable or turned out of office. Democrats or Republicans need to realize this. Voters have to make their representatives represent the people, not special interest.

sylvester Hines

Oakland, CA

Jun 8 2009 - 10:58pm

Web Letter

I got this far: "People were hurting and furious at the government's generous bailouts for banks. But how could the Democrats do something for the folks without upsetting their friends and patrons in the banking industry?"

Then I saw that I still have another four pages of this to read. No thanks.

You sound just like a Republican: "without upsetting their friends and patrons in the banking industry"? (Rush lite?)

"Obama is the Messiah, so everything has to be done yesterday"?

President Obama will get all these things done in his own good time. Get it?

Neil Richard Harvey

Bogotà, Colombia

Jun 8 2009 - 6:44pm

Web Letter

I'm a "bankruptcy" lawyer who has served more debtors than creditors. Just a couple of weeks ago, I fended off a bank from getting a client's apartment buildings out of bankruptcy so that they could be foreclosed. However, I have also served on two national bank boards and made many loans in that capacity. Most of my debtor and bank clients have been modest in size--the GMs of the financial world would not grace my office. I also was the lawyer for one payday loan company. The company had some problems; I got it into compliance with the law as best I could, and its business being legal, I respected its rights. I also had a debtor in my office earlier this year who had one payday loan at 706.3 percent interest. I told the payday loan company it either could have zero percent interest in a bankruptcy or it could come to its senses. That's called negotiating. (I did inquire whether it was that last 0.3 percent of interest that was the "deal maker" in the payday loan company advancing the money. LOL.)

These details are important only in that I know both sides of these arguments and I believe I have an entirely balanced viewpoint on the rights of debtors and creditors.

What troubles me from this article are things such as the Mr. Greider's observation/argument that: "Perhaps the most revealing moment for Democratic timidity was the Senate roll call to authorize bankruptcy judges to intervene on home foreclosures and reduce the burden for failing homeowners. If the bankers refused to make a deal, the debtors could take them into bankruptcy court and hope for better terms. This single reform would shift the balance of power modestly from creditors to debtors and save at least 1.5 million families from foreclosure, reformers estimated. The measure passed easily in the House, but was defeated by the Senate."

A big problem today with American economic reformers such as Mr. Greider is that they advocate reforms without consideration to the Constitution. It may well be that $1.5 million families could get out of foreclosure with the aforementioned "single reform," but it is equally true that the reform is illegal under our form of government. The Fifth Amendment does not just protect one from having to testify against oneself in a criminal proceeding. It also forbids the government from taking property without due process of law, which includes paying for it. (A communist government is legal in the USA if [1] voted into office in a fair election, [2] the government pays full market value for all assets instead of merely expropriating them and [3] the assets are used for a public purpose.)

A "mortgage" is a creditor's interest in someone else's land and is property. The government cannot just say to a bank: "modify the mortgage as we say is wise and fair." Rather, either the creditor holding the mortgage must be paid the full contract value or it gets the property. The government can modify the payment terms, but only so long as the property's value is not lost (which means in a falling market the debtor has to make up the difference between the old value and the depreciated value) and the creditor ultimately winds up with the full benefit of its bargain--and if the creditor cannot be "adequately protected" in this ultimate result, the debtor loses the property.

Unless one believes in French anarchist Pierre-Joseph Proudhon's maxim that "property is theft," Greider's proposed reform is just a modern version of Proudhonism, or--to bring it more up to date--Hugo Chávezism. But whether imposed by Hugo Chávez or by Barack Obama, either colonels and politicians own the property and make the economic decisions, or we, the people, do. It's that simple. I opt for the people and the Constitution.

keevan d. morgan

Chicago, IL

Jun 8 2009 - 6:14pm

Web Letter

Thank you, Mr. Grieder, for getting to the heart of the biggest problem facing USA. Not usually a fan of DEMs, I am still waiting, frustrated, for them to give USA back to "We the People."

The GOP did not disappoint when they shut down a regulatory structure that permitted profit and greed to flourish, while preventing catastrophe for seventy years. Of course they had help from DEMs. The arrogance and entitlement exhibited by Wall Street and banks is aided and abetted buy our "elected" represenrtatives in DC. Its as if "we the people" don't exist.

I have been wondering how we overcome this disenfranchisement. You give some hopeful ideas.

Now the hard part. How do we get 51 percent of the USA to stop buying the line of the established incumbent?

mike flynn

New York, NY

Jun 8 2009 - 11:19am

Web Letter

First, thanks, Mr. Greider, I have been following your writing for years. One question, How do you stay sane in such a cesspool of a city that is DC?

Unfortunately we no longer have any real choices as American citizens. We can vote for the Republicrats or the Demicans with nearly exactly the same result. The very few statesmen (or women) are far outnumbered and marginalized by their own political machines. The plight or fate of the average American is only important to most politicians when they need a sound bite or baby to kiss.

Our system is totally and completely owned by the monied interests of the oligarchy. We now have a system of one-vote-per-dollar, which translates into most of us being powerless. The Democrats have not guts or backbone to even suggest any real , for their corporate handlers and henchmen of K Street will descend upon any heretics with a vengance.

As I speak to others about our plight, they have no real clue as to what is really going on. They are wrapped up in the bedroom issues of abortion, gay marriage or imagined religious tripe. The issues that will and are destroying our nation before our very eyes are far off the radar screens of conciousness of most people. How do we get them to re-engage? I had hoped the Democrats might at least make a try, silly me, but they are owned also. The American Empire continues to expand and the American people continue to allow it. When even harder times hit, we need to look in the mirror, for there is our enemy. I fear for all the children. Demican-Republicrat = Doom for America. I hope I live long enough to see a change.

Dallas Eggers

Prescott, WI

Jun 7 2009 - 5:40pm