Law and Politics

I have assiduously kept this blog and all my writings focused on the effective and efficient practice of law, not personal beliefs or politics.  Those are mine and to be shared only with friends and family. You don’t read my thoughts to be persuaded to vote one way or the other. However, a friend’s post today on his blog has prompted me to speak out, prompted in part by the enormity of the current financial challenges of our time.

One perspective that I’ve heard echoed frequently is a paraphrase of Pres. Franklin D. Roosevelt in the 1930’s:  Even if wrong, it’s important that we do something! Something is better than nothing because of the crisis of confidence. At least with something in the works, people believe we’re moving forward and will fix whatever the problem is.

I generally agree with this … but I also see a massive redistribution of wealth in the current proposals which, frankly, scares me. The rhetoric of the candidates does nothing to build confidence in me despite the fact that I will vote for one of the candidates for one very simple reason: His philosophy concerning judicial appointments, appointments that in my opinion far outlast the impact of a president on other fronts. We’ve lived through many ineffective presidents … but their terms last 4 years or 8 at the most. Their appointments often last decades, a far more significant impact.

Getting back to the economy. The current crisis, I’m told, began with the housing industry and the mortgages created when buying a house. Loans were given to people who couldn’t afford to maintain the payments. But, those loans were kept current until the interest rates were raised. Don’t forget that many of these people could also make the new payments but for the fact that they lost their jobs — their jobs were eliminated by outsourcing, by changes in technology and by other factors. Now comes Wall Street with new products that wrapped these mortgages into new securities instruments. These securities instruments were sold … and there was no one the homeowner could turn to for the purpose of adjusting the term or rate of the mortgage … a blank wall appeared before the homeowner. The bank no longer owned the mortgage.

In the recent IndyMac fiasco, the FDIC came in and worked with the homeowners, changed rates and terms of the loans. Homeowners stayed in their houses and no bail-out money was needed. In effect, the FDIC pulled out an old technique used in the 1930’s.  In the 1930’s, Roosevelt froze bank assets and mortgages. Similarly today, foreclosures could be frozen for 30/90 days, or whatever time needed, until a reasoned solution could be developed.

Why is it that our current leaders have such a short memory of history? Are they so bent on eliminating the "middle class" and transferring more wealth to those who don’t need it?  Some have said we’re enhancing corporate socialism … I was taught in school that socialism was intended for the working folks — even if you objected to this form of government.  Where are the working folks in these new proposals?

Apparently, a lot of people agree with me … Congress has just "junked" the current proposal. I’m sure another will be on the table shortly. But, it was really disheartening the other night to hear Gov. Corzine of New Jersey, a former securities industry chief executive, say that he dislikes the current bill, but it’s better than nothing, that something must be done!

History will be made in this election. Good or bad, depending on your point of view. But, clearly the next generation is being mapped out for us as I write this comment.  Be sure to vote and make your voice heard.

Categorized in: Personal Thoughts