Unemployment Rate Drops, In This Case Sucks, As Economy Staggers

The nation's unemployment rate dropped to 9.5%, the government reported Friday, the lowest level since June 2009.

That is terrible, depressing news when you consider 652,000 left the labor force after failing to find jobs. About 1.3 million of the 6 million unemployed have exhausted their unemployment benefits.

The data released by the Labor Department Thursday and Friday in many sectors indicates to me that what gains we made as an indirect result of Congress's $787 billion stimulus package in March 2009 has evaporated as money and programs run out.

Employers cut 125,000 jobs in May and the federal government 225,000 temporary Census takers. Private businesses hired 83,000 new workers, up from 41,000 in April.

"It could have been worse, but it wasn't good," said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. "It's adding to the evidence that growth has slowed." 

Factory orders which had been nudging upward for five months dipped 1.4%. 

Here are word bites I culled from the financial reports:

-- The nation still has 7.9 million fewer private payroll jobs than it did when the recession began. It takes about 125,000 new jobs a month to keep up with population growth.

-- Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May. 

--The number of pending home sales plunged 30% in May from April, to the lowest level since at least 2001, an industry group reported Thursday, reflecting a larger-than-expected fallout from the expiration of the federal tax credit for home buyers.

"The general tone has darkened over the past month," said Sophia Koropeckyj, an analyst at Moody's Economy.com, which this week estimated the odds of a return to recession at 1 in 3, up from the previous estimate of 1 in 4.

A happier forecast:


-- After a series of strong economic data early this year, recent reports have been more mixed, but that hasn't altered the fundamental outlook for the economy, said Ken Matheny, a senior economist at Macroeconomic Advisers, a forecasting firm based in St. Louis.


"It hasn't shaken our belief for a solid, sustainable recovery," he said, noting that business investment remained solid and consumer spending was holding up fairly well.

Back to the gloomier side:


-- By all accounts, the broader economy has been recovering since last summer, powered by government stimulus funds and an upturn in manufacturing. But the rate of growth has fallen from 5.6% in the fourth quarter of last year to half that pace in the first three months of this year.

-- The reports renewed fears among economists that the housing market could be headed for more trouble now that the home-buyer tax credit is no longer fueling the real estate market.


The National Assn. of Realtors' pending home sales index, based on the number of contracts signed to buy previously owned homes in the U.S., dropped to 77.6 in May from 110.9 in April. It was the lowest point since the index was created in 2001.


Lawrence Yun, the trade group's chief economist, said June and July's numbers were also likely to be sluggish. But if pending sales don't begin rising by August, the housing market could be headed for a more prolonged decline, he said.


"We need to see a steady rise in that figure," Yun said.


To a large extent, the housing market depends on the job market – because to buy a home, people need to have money coming in and the confidence that they won't lose that income.


 "The housing market just can't stay on stimulus medicine forever," Yun said. "What is really needed is jobs."


-- Investors' willingness to lock up their money in bonds at such low rates  -- 2.92% for 10-year Treasury notes -- typically is a sign that they expect the economy to slow sharply.

A beleaguered President Obama did his best Friday to brighten a gloomy forecast by announcing a nationwide project to expand broadband Internet access in rural areas. He said it would create 5,000 private sector construction jobs in the short term and ultimately benefit "tens of millions" of people. 

And where does that money come from? The remaining portions of the $787 billion stimulus package.

Criminal Cartels Shootout Leaves 21 Dead

 Shortly after President Obama in a highly political speech Thursday said the U.S.-Mexican border is the safest in 20 years, 21 persons were killed in a gun battle between rival drug and immigrant trafficking gangs.

Although the shootout occurred 12 miles south of the Arizona border, residents north of the border fear the motive for this kind of violence spills into the United States in other forms.

One aspect of such collateral damage is Phoenix being turned into the kidnapping capital of the U.S., second only to Mexico City, according to Arizona Sen. John Kyl.

Politics notwithstanding, border security can only be measured to the extent of what happens just south of the border is contained from spreading north.

Compared to Mexico, the sporadic murder of one Arizona rancher, the increased violence in kidnapping and shakedowns for ransom, the uptick in drug smuggling arrests are a clear and present danger to those that live in the Southwest.

The degree the Mexican criminal cartels go to protect their trade is blood curdling. Since 2006, the Mexican drug cartels have murdered 23,000 people, including 4,300 in Ciudad Juarez, which borders El Paso, Texas.

The 21 killed near Hermosillo Thursday illustrates the more recent confluence of drug and human trafficking gangs because the area is a prime corridor for crossing the border into the United States.

Sonora state prosecutors confirmed the number killed. They said nine were arrested, including six who suffered gunshot wounds. Seven rifles were confiscated, they said.

Mexico's El Dario newspaper said police seized 19 high-powered weapons and 11 late-model vehicles.

Not to be outdone and typical of the daily violence along the 1.993-mile border was the drive-by shooting death of Chihuahua state assistant attorney general Sandra Salas Garcia and one of her bodyguards.

Salas was responsible for evaluating the work of prosecutors and special investigations units in Chihuahua working out of her office in Ciudad Juarez.

Elections in 12 Mexican states will be held Sunday. On Thursday, the decapitated head of Hector Murgia, a candidate for Ciudad Juarez mayor representing the opposition PRI party, was found on the doorstep of his home.

Yes, this is Mexico's problem. But the winners of these turf battles use the power and profits to supply the United States with drugs and cheap labor, their most lucrative market.

Real or imagined, that's how American border residents perceive it. And that's why they snicker when the president says the border is the safest in 20 years.


As a result, the knee-jerk countermeasures the border state governments take is not surprising.

Obama Pitches Immigration Reform, Mucha Suerte El Presidente

One thing President Obama is not is accused of being incapable of walking and chewing gum at the same time. The president has so many major platters on his agenda it dwarfs the size of a picnic table jammed with plates of enchiladas and tamales at a Mexican fiesta.

For the first time in 18 months as president, Obama Thursday delivered a major speech calling for immigration reform legislation.

It fulfills a campaign promise to his Hispanic supporters. He called for a path to citizenry for an estimated 11 million illegal immigrants, a road his opponents describe derisively as amnesty.

Obama also signaled to Hispanics not to get their hopes up if the legislative package -- he did not spell out with specifics or set a timetable -- won support from enough Republicans.

Translation: Democrats in his own party don't want to touch this hot-button issue with a fork. They have enough problems in the November midterms without being saddled with immigration.

The Los Angeles Times:


“We can create a pathway for legal status that is fair and reflective of our values and works,” Obama said in his speech at American University. “The question now is do we have the courage and political will to pass a bill through Congress and finally get it done.
“I’m ready to move forward. But the fact is without bipartisan support we cannot solve this problem. We cannot pass comprehensive reform without Republican votes. That is a political and mathematical reality.”

Obama politically was mugged into itching the scab known as immigration reform. The 50 million Hispanic population in the U.S. represents a large percentage of his base of support.

In May, national attention was heaped on Arizona when its Republican Legislature passed a law rubber stamped by Gov. Jan Brewer that made it illegal to step foot in the state without proper documentation of national origin.

That law and more passed in Arizona and other states were embarrassing for it meant they were taking matters in their own hands in areas usually reserved for the feds.

“The border is more secure today than at any time in the last 20 years,” the president said in his speech.

Assertions such as that drive his opponents nuts, especially those who live near the Mexican border and have to live daily with what they consider a heinous problem.

Not to mention residents in interior states from the Rockies to New England who view the predominately Hispanic work force as a drain on their health and safety public services.

As late as Monday, Hispanic lawmakers who have criticized Obama for being lethargic on the issue, met with Obama and his people in the White House. The Times article said they left pleased.

In the past, Obama said the illegal immigrants who have permanently settled in the United States need to go to the "back of the line," pay a fine, learn English and then submit to the citizenship process.

Whatever path immigration reform takes, it must include border and interior enforcement, employer sanctions and a streamlined resolution what to do with families who want to live here permanently.

For a president who prides himself in mastering details of complex issues, he was not exactly forthright saying the border today is more secure than in the past 20 years.

He was spot on in that arrests along the 1,933-mile border from California to Texas are down 54%, from 1,171,396 to 540,865, between 2005-2009.

At the same time, U.S. Border Patrol agents increased from 9,891 to 17,408. Last week, Homeland Security chief Janet Napolitano, a former Arizona governor, increased assignment to the Tucson sector to 3,318 agents, the most of any sector along the border.

The decrease is not in itself increased Border Patrol officers, says T.J. Bonner, president of the union representing 17,000 agents. It reflects a downturn in the U.S. economy beginning as early as 2007.


Bonner in an article in the Free Republic Wednesday is quoted that the sharp increase in drug seizures has coincided with a steady decline in apprehensions, indicating to him that the agency cannot handle both problems at once.

He said once the economy recovers, the illegal entry tide will rise again. His agents apprehend about one out of three persons illegally crossing the border.

Speaking as a cop true to his profession:

 “Are we anywhere close to border security? No, we’re not. True border security means that no thing and no person crosses that border without our permission.”
What few people realize is that the Obama administration has kept a low profile in targeting employers who hire illegal immigrants, a weapon that strikes at the heart of the problem.

Two immigration attorneys co-authored this report on the California Employment Attorney website:

In the past nine months, 65 employers have been arrested and 109 companies have been fined a total of about $3 million. The government has also notified more than 1,600 companies nationwide of plans to audit their records, and has already begun hundreds of inspections. 

The Obama policy is a stark contrast to the Bush administration which they said:

(C)onducted work-site raids that targeted employees rather than employers. Although thousands of illegal workers were prosecuted, few employers were held accountable for their hiring practices and new illegal immigrants replaced those who were deported. 

What the attorneys are advocating to their clients is joining E-Verify, a voluntary electronic program that checks whether new hires are authorized to work in the United States. They said about 1,400 new businesses each week join, with enrollment in June of about 17,000 employers in California and 204,000 nationwide.

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EPILOGUE

I wish Obama luck. I don't think he has his heart in it, politically. Under current laws, enforcement of employer sanctions will work if it is applied with the same mindset as Bonner, the union boss. Think of the outcry when homeowners are fined and tossed in the pokey when arrested for hiring illegal workers hanging around the Home Depots and other drive-by places of "employment." If you drain the pool, the horses will not come to drink.

(Cartoon from Insights on Law & Society)

Nancy Pelosi, The Straw Lady Republicans Love To Hate

Even before she became Speaker of the House, Nancy Pelosi was a lightening rod for the Republican attack machine, the epitome of a liberal, free-spending Democrat from -- gasp -- San Francisco.

In my family and circle of friends in California, Pelosi is the face of all what is wrong with Democratic liberals for she is seen as an elitist, environmental tree hugger, bleeding heart, anti-war activist, big government advocate and, worst of all, from a city that harbors illegal immigrants and honors homosexuals.

When I ask for specific examples of legislation Pelosi favors, they can name none. My friends and family are not dumb. Those on the right of the political spectrum are following the Republican propaganda machine. Ditto heads.

When I point out to them that as Speaker, Pelosi never lost a vote on any piece of major legislation, they are not in awe.

"With that majority behind her," one family member suggested, "Tweedle Dee and Tweedle Dumb could pass any cocklemanie thing they so desired."

In today's politics, vilifying one's opponent is staple as if displaying cartoons of Pelosi, Sen. Majority Leader Harry Reid and President Barack Hussein Obama will turn their cause to triumph at the polling booths.

What turned me on to this discussion is a story in Thursday's Washington Post, a new attack ad by the Republican National Committee and a months-old YouTube clip in TV ads used by Republican candidates in a few "red" states.

It features what the Post described as "a colossal tax-dollar-engorged monster who ravages small towns and must be brought down by Republican ray guns." The cartoon version is called "Attack of the 50-Foot Pelosi."

There's a variety of versions of the message the ad offers.

In North Carolina, House candidate Harold Johnson, according to the Post:

"If you're a small-business owner," Johnson says, "you get up every morning and you put your helmet on, because you think that Nancy Pelosi is going to come into your bedroom and hit you over the head with a baseball bat." 

My reaction: At least she was honest enough to wait until he awakened.

Pelosi has what is known in advertising markets as a high "Q" rating and the mere mention of her name in Republican circles triggers a Pavlovian response.

 "If you go to almost any grass-roots event and you mention the speaker's name," said Bill Flores, a Republican who is challenging Rep. Chet Edwards (D-Tex.), "you will get a huge response from the audience." Which is why, by Flores's estimate, he manages to drop Pelosi's name into his speeches about as often as he does President Obama's. 

I suspect the hidden motive of Republicans is, in male chauvinistic terms, penis envy or subliminal jealousy.


Her success in pushing health, energy, financial and stimulus bills through the House is a crowning achievement, described by political analyst Charles Cook and most congressional observers as "the most powerful speaker we've seen in modern history."

The question becomes if these ads the ilk of a 50-foot Pelosi translate to success on election day, the answer is no.

Before former House Speaker Newt Gingrich self destructed, the Democrats cast him in the same vilified cartoonish freak as Republicans are doing today with Pelosi. Reid, et. al.

Steve Elmendorf, a strategist for the Democrats during Gingrich's rein said "It's very hard in any of these races to make it about the congressional leadership."

For the Post interview, I was amused that Gingrich turned his bag of intellectual expertise to that of neutral political observer.

Gingrich warned that campaigning against the Democrats — even one as unpopular with Republicans as Pelosi — is no substitute for offering voters some idea of how the GOP would govern if Republicans won back the House. "People who think that all the Republicans should do is just yell 'no' are just plain wrong," he said.

Reaching Economic Recovery Blindfolded

The $787 billion stimulus package passed by Congress in 2009 did better than Republicans would have you believe and worse than the progressive Democrats maintain.

The U.S. economy needs another transfusion of gigantic proportions but without the pratfalls of the last one to avoid
what Kensyian economist Paul Krugman predicts a third prolonged depression since 1873.

Actually, I have one foot on Krugman's boat and one on the dock. Which poison would you prefer:

Risking inflation and a massive debt.

Holding fast to prolonged unemployment potentially longer than in the 1930s during the last Great Depression when it took a world war to scrape ourselves out.

The error of Krugman's ways is printing money (inflation) and selling U.S. Treasury notes at loan shark interest rates.

Krugman argues the panic-generated 1873 Long Depression and 1933 Great Depression

(B)oth included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense. 

And,

(Y)ou might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy. 

So,

The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels. 

Thus,

It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating. 

Let's leave Krugman, Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to their own little world and pontificate what a new stimulus would do where the last one left off.

In the broadest terms, the 2009 stimulus with a year to go got us where we are today: Saving public sector jobs with bailouts; tax breaks for the private sector where jobs failed to materialize as hoped.

A report by the nonpartisan Congressional Budget Office shows the Recovery Act has increased the number of workers by between 1.2 million and 2.8 million. The CBO also projects that 3.7 million jobs could be attributed to the stimulus by the end of September. 

When the Senate killed a mini-version of a stimulus bill last week most of the attention was placed on the failure to extend $47 billion in unemployment benefits.

But it also would have expanded the COBRA subsidy by $7.8 billion; increased Medicaid payments to states by $24.1 billion; extend the welfare emergency fund by $2.5 billion and provide $1 billion for summer jobs.

The Bureau of Labor Statistics for May was bloated with a once-every-decade hiring of federal census workers which accounted for 411,000 new jobs, excluding farming.  Only 41,000 new jobs in the private sector were added. Unemployment dipped to 9.7% meaning 15 million Americans out of work. The civilian labor participation force for jobs was 65% and the employment population rate was 58.7%. About 2.2 million were marginally attached to the labor force showing no improvement for the past year. Factory employment gained 29,000, bringing that total to 126,000+ in the past five months.

On the downside, construction jobs decreased 35,000 and that signals an even deeper problem.

Part of the $787 billion stimulus was a program offering an $8,000 tax credit to new home buyers. The program ended April 30 and new home sales dropped abruptly to the lowest levels in 40 years.

"The tax credit expired as the peak home-buying season kicked off," said Mark Vitner, senior economist at Wells Fargo Securities. "Imagine what would happen to retail sales if they canceled Christmas."
 
 Dumb.

The backlog of unsold new homes is 210,000 which is a drain on market values and only perpetuates the drop in new construction jobs.

Another failed Obama program was helping drowning homeowners with mortgages in the Home Affordable Modification Program. Out of 3 million eligible, only 170,000 borrowers were approved and more than half of those defaulted for missing payments more than three consecutive months.

Banks bailed out by the government took the equity to regain profits but a renewed vigor by tougher banking regulators curbed their ability to loan in a much tighter credit market.

The ultimate result was between the stimulus and bank bailouts the public sector for the most part held on to their jobs, the banks rebounded and the private sector business community gained additional tax breaks and credits.

The only guy left out was the poor soul living on Main Street.

And To Think John Boehner Could Be The Next House Speaker

To hear Democratic media cheerleaders tell it, Republican House Minority Leader John Boehner had a tough day at the office Tuesday. The office of the editorial board of the Pittsburgh Tribune-Review, that is.

His interview did not go well and the film clips I saw made him look like he swallowed a month's prescription of a sedative moments before the sit down.

I disagree with Rachael Maddow his comments spoken in a monotone laced with no doze may cost the Republicans the November midterm elections.

Judge for yourself with the commentary and clips she provided on her nightly MSNBC broadcast and some pro and con slings and arrows in this blog roundup.

In the interview, Boehner said the financial reform legislation is as "killing an ant with a nuclear weapon." What's most needed is more transparency and better enforcement by regulators, he said.

Said one blogger:

Perhaps his dismissal of what happened to millions of jobs and the collapse of the real estate market is based on the fact that it was a Republican who was in charge when it happened and that the loose financial regulations that allowed it to happen were written by Republicans.

Now that has a familiar ring to it.

Boehner believes the Democrats are "snuffing out the America I grew up in." 

 

That drew this snort:

 

As Keith Olbermann observed, growing up the 1950's as Mr. Boehner did meant segregated schools, Jim Crow laws, anti-miscegenation laws, political assassinations, jail time for being gay, and polio. And the Edsel. Does Mr. Boehner really want to bring those things back?

 

Boehner raised the political mantra of the Tea Party to new levels by saying a political rebellion is brewing and "I don't think we've seen anything like it since 1776."

Maddow and her fellow progressives, better schooled in history than the minority leader, pointed out that little event called the Civil War.

 

Boehner said he wants to raise the age of Social Security retirement to 70, explained accordingly:

 

 “We’re all living a lot longer than anyone ever expected,” Boehner said... “And I think that raising the retirement age — going out 20 years, so you’re not affecting anyone close to retirement — and eventually getting the retirement age to 70 is a step that needs to be taken.”…

Boehner also floated several other reforms to Social Security, paired with raising the retirement age, to make it more solvent. Boehner said benefits should be tied to increases in the Consumer Price Index (CPI) instead of wage inflation, and he suggested reducing or eliminating benefits to Americans with a “substantial non-Social Security income” while retired.
“We just need to be honest with people,” he said. “I’m not suggesting it’s going to be easy, but I think if we did those three things, you’d pretty well solve the problem.”

Correct me if I'm wrong, Mr. Minority Leader, but Social Security benefit increases in deed are tied to the cost of living index.

 

Here's a gotcha which embarrassed  the minority leader:

Pandering John Boehner appeared on Hugh Hewitt's show on May 27th to complain President Obama was doing too little:

It’s becoming increasingly clear that the Administration is not fulfilling their responsibility to the people of the Gulf Coast area or the people of the United States.

But Friend of Big Oil John Boehner told the Pittsburgh Tribune-Review today that President Obama is doing too much:

Boehner said Obama overreacted to the BP oil spill in the Gulf of Mexico. The spill might warrant a "pause" in deepwater drilling, but Obama's blanket ban on drilling in the gulf -- which a judge overturned last week -- could devastate the region's economy, he said. Louisiana State University scientists estimate the ban could have affected more than 10,000 jobs.

Hey, Dude, what about the 16,000 jobs lost as a result of the blowout, the economic impact on the entire Gulf Coast and the ruination for years of an ecological system depended upon by thousands of species of fish and wildlife.

 

Summed up one critic:

I also find it disturbing that Mr. Boehner, along with a number of other Republicans, are cavalierly tossing around death and killing metaphors to describe the Democrats; they're "snuffing out America," or candidates talking freely about "taking out" their opposition through Second Amendment remedies or "gathering your armies," not to mention the ubiquitous Hitler and Holocaust imagery that pops into the campaign ads from Alabama to Alaska. I realize all campaigns go overboard, but where the Democrats were mean to George W. Bush and called him names, these folks are skating a little to close to dangerous. There's a difference between snark and death threats.

 

We've heard that tit for tat before. 

 

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EPILOGUE

Here's what I think. John Boehner is a lousy mouthpiece for the Republican Party. The GOP is leaderless but not rudderless. Their best spokespersons are Sarah Palin who coins catchy phrases that stick -- "death panels" -- and frequent other misrepresentations of fact -- Ronald Reagan attended Eureka College in California (Illinois, actually) -- and conservative radio mega ego Rush Limbaugh. They will gain seats in both Houses not because of their lack of oratorical eloquence and opposition of no but because of history and voter anger over jobs, unemployment and frustration of a cursed Democratic administration. Yes, the party of no plays a small part of that equation. Good political strategy but bad for governance. The party out of power is always 100% accurate in hindsight. Wouldas and shouldas don't mean much.

Kagan Hearings Are A Farce, She Said, Until She Was Nominated

 In a 1995 book review, Elena Kagan wrote that the Supreme Court confirmation hearings were an "air of vacuity and farce."

Now that Kagan is the nominee, she changed her mind and now agrees the lifetime appointees should remain mum if questions from senators “have some bearing on a case that might some day come before the Court.”

Her epiphany came, she testified Tuesday, when Republican Sen. Orrin Hatch of Utah took her aside and urged caution in her testimony.

Furthermore, she testified she would not discuss past Supreme Court decisions. 

This proves the obvious. Why hold the hearings? It's a dog and pony show.

Instead, we are spoonfed garbage from Republican senators that Kagan's mentor Justice Thurgood Marshall was some liberal freak activist who supposedly once said make a decision and let the law catch up with it. The man has been dead 17 years.

And Democratic members on the Judiciary Committee lambaste the current Chief Justice John Roberts court as conservative activists. In case you haven't heard, activist is a dirty word in political parlance addressing the courts.

These decisions, Kagan responded, are what they are. Brilliant. And a rose is a rose is a rose.

The fact is less than 20% of Americans have ever heard of Kagan, the Obama administration's Solicitor General, and my guess is that less than 1% can name all nine current justices of the high court and that same 20% could not name the justice she is replacing.

Yet, we must endure more days of hearings and unless an illegal housekeeper or an Anita Hill incident is surprisingly sprung, the chances of the full Senate confirming Kagan are
a slam dunk.

I rarely rue for the old days but it wasn't until the middle of the last century that the Senate hold hearings because it infringed on the integrity of the Judicial branch of government. Newsweek:

“For most of American history, the Senate considered Supreme Court nominees without soliciting [the nominees’] input,” wrote Benjamin Wittes, of the Brookings Institution, in his 2006 book, "Confirmation Wars."  Politicians considered it an intolerable affront to judicial independence to ask a nominee how he would vote on a matter; to answer any such question was unthinkable.
It was not until the high court’s epochal decision desegregating public schools, in 1954, that senators began to be emboldened to press nominees by asking directly or indirectly about what they would do if confirmed. It was an effort to exert some influence on a judiciary that--since Brown v. Board of Education--has assumed a far more commanding role in setting national policies via interpretation of the Constitution. 

The 1987 Reagan nomination of Robert Bork killed by the Democrats is my time line for the extreme partisanship. Ever since Bork, both parties and their special interest backers have one upped each other and turned the nomination process into a Roman gladiator spectacle.

I could care less Kagan is charming when she handles questions such as this as reported in the New York Times.


But the hearing placed an early emphasis on more abstract issues like Kagan’s judicial philosophy about constitutional change. (Sen.Patrick) Leahy (D-Vermont) asked her to expound on how the Constitution had been amended, and she plunged into a kind of Civics 101 discourse on the framers, drawing a contrast between clear-cut provisions like the one that requires senators to be at least 30 years old, and other more general provisions, like the Fourth Amendment’s prohibition of unreasonable searches and seizures.
“Those provisions,” she said, “are meant to be interpreted over time.” 

Wow. 

I loved Newsweek's description:

Within a couple of hours after Supreme Court nominee Kagan began her long-awaited question-and-answer session with the Senate Judiciary Committee on Tuesday morning, most of the 19 committee members had left the chamber for much of the time. The spectator gallery was far from full—especially after Sen. Herb Kohl, a Wisconsin Democrat, dispatched people to the exits by announcing: “Let’s talk about antitrust.”

Republican Sen. Tom Coburn of Oklahoma is fast becoming a favorite of mine for telling it as it is.

"Why should we have this dance if we're not going to find out real answers about real issues about what you really believe?"

Coburn is the guy in the MSNBC promos for its morning show with former congressman Joe Scarborough. Standing  on the Senate building steps being told of Congress's disapproval rating, Coburn said Congress stinks and questions the sanity of those 23% who think they are doing a good job.

I place the court confirmation process as it now exists in the same category of the president pardoning some stupid turkey on Thanksgiving Eve.

Why I Am Not In Awe Of The Rich And Famous

A friend from the 1960s tracked me down after all these years and in our email exchanges asked what I thought about Joe McCain.

Joe is Arizona Sen. John McCain's younger brother. He worked briefly for the two San Diego dailies in the late 1960s where my friend and I toiled.

Joe immediately established himself as a legend. Not as a reporter. As a prankster of which survivors of those days still fondly recall.

Joe is the literal definition of a Navy "brat." It was beneath his dignity as the son of a famous admiral and brother of the more famous prisoner of war in Vietnam that a lowly editor assign him the mundane task of providing the papers' readers with the vital statistics of birth, marriage and death notices.

Joe was fired for showing his disdain by sneaking into the day's list of divorces:

"Mouse, Mickey vs. Minnie."

Joe was quickly rehired and assigned as a general assignment reporter unfortunately under my domain as assistant city editor.

I honestly cannot recall whether he was any good as a reporter and writer. I do recall him returning about 30 minutes before deadline on a story I assigned.

Instead of briefing me what he had and starting writing, Joe walked over to another part of the newsroom and began regaling them with his nocturnal adventures of the past evening.

"Get your ass over here, McCain," I shouted. "We're on deadline." In those days, we could talk that way in newsrooms.

"You can't talk to me that way," Joe shot back.

"I just did," I said. "Do your damn job."

My friend Janet recalls another occasion. The two engaged in an argument and Joe pushed her into a trash can. She had to be restrained by others in the newsroom. 

"Had I caught his skinny ass, I would have dismembered him," she recalled.


I haven't followed Joe McCain's career since he left the San Diego newspapers. Here's one report I found on a quick Internet search:

In late October 2008, it was reported that Joe McCain called 911 emergency services in Virginia to complain about traffic. He was campaigning in the state for his brother at the time.

That is typical of Joe as I remember him.

Joe also defended his brother who claimed during the campaign he couldn't remember all of the homes he and his wife owned.

Joe immediately jumped to his brother's defense that he wasn't elitist and came from a "middle class" Navy family. True, but elitists also includes "privileged."

The reason I yelled at Joe in those bygone days was that I had no fear nor awe of what may be described by a once popular program as the "Rich and Famous."

I was one of them during those critical years growing up between the ages of 13 and 18.

My father somehow found the $2,000 tuition fee ($35,000 by 2006, the 50th anniversary of my class reunion) to send me to Webb, a boarding school, considered an elite school in California and an equal to those such as Choate on the East Coast attended by the Kennedys and other mucky mucks.


My classmates in the 1950s were from the day's rich and famous. From movie families such as Koster, Kahn and Astaire, to Firestone and Guggenheim, to San Francisco's most powerful with names that included Fleischakker, Sutro and Roos.

I assure you they put their pants on one leg at a time, just like me and the rest of us. At Webb, we were treated equally by the teachers we called masters.

Wealth meant nothing when it came to discipline and violating the honor code. Fred Astaire Jr. was kicked out of school for some infraction and although a few raised eyebrows, it was par for the course.

The Roos scion I learned was far from immortal. One morning he was found dead, naked and hanging from the ceiling with one of his belts. That was a learning experience from the mind of 15 year olds.

Snobbery based on family fortune was almost non-existent.  I was judged not as a son of a dirt farmer but how I performed in the classroom and athletic field.

The strange thing was that the bonds created in boarding school rarely extended beyond graduation except for a very few. When the class reunions of 25 and 50 years were held, I am told those attending were quite small in numbers.

After graduation, I returned to visit the campus once, weeks after I married, to show my bride.

I sought out one classmate of my fellow 1956 graduates. That was Dan Guggenheim who was a stock broker in Newport Beach where I was living at the time. Dave Firth, another classmate, visited me when I was a junior in college.

This is embarrassing for me. Erik Larsen, another classmate of mine for four years, contacted me and visited twice after our 50th school reunion was held. He was a day student, living at home in Claremont, and to this day cannot place him anywhere in my memory bank. Even a review of five school "El Espejo" annuals didn't help. Sorry, Erik. My mind works in mysterious fashion I can't always explain.

As a newspaper reporter, one meets the "rich and famous" routinely. And, with the foundation and background formulated in my high school days, I was never in awe or intimated by the powerful.

I interviewed Ronald Reagan once when he was California governor. Nice guy. He offered me those damn jujube candies on his desk where he preferred to talk about other actors he knew rather than the subject I came to interview.



And the number of officious bastards I tried to interview were endless. During the Vietnam War, a downed Navy pilot Dieter Dengler was captured by the enemy, escaped and air lifted to Naval Hospital in San Diego. I was sent to confirm his presence and interview the officer.

The Navy's PIO, a captain whose name I cannot recall, yelled at me for entering his office without permission.

"Get our of here before I throw your sorry ass in the brig," he shouted at me. "Don't you know who I am?"

I told him his name and rank didn't mean squat to me personally but could he confirm Lt. Dengler was in the hospital ward.

My photographer, a retired Navy combat photog, quickly grabbed me and nudged me out of the office.

The paper won that battle. Nolan Davis, the only black reporter on the staff, went to the hospital, donned the clothes of an orderly, grabbed a bucket and mop, and strolled the hallways until he found the pilot and asked him a few questions before someone on the ward got wise.

Ah, those were the good old days. But for me, the rich and famous are all the same. Some are good guys. Others are jerks.

And we all put our pants on one leg at a time.







Politico: Brother: Wives handle McCain finances (August 22, 2008)

The King Of Pork Is Dead, Long Live The Process

The loss of Sen. Robert Byrd who died Monday is not any particular game changer of politics played out in Washington for it is peanuts compared to other people's pork he fed the folks in his home state of West Virginia.

Byrd was dubbed the "King of Pork" and damned proud wearing that mantel no matter how hard the watchdog group Citizens Against Government Waste tried to embarrass him. Byrd even flipped the bird at his detractors.

I come before you today not to bury or malign the longest serving senator in United States history but to reflect on the impact he bestowed on his fellow West Virginians, recipients of more federal money than any of the other 49 states.

Robert Byrd was old school politician. Until stepping down two years ago as chairman of the Senate Appropriations Committee, of which he served as a member for 49 years, he doled out at least $5.5 billion in projects for West Virginia.

And that was only since 1991 which the watchdog group tracked. It does not include $1.2 billion from 1995 to 2008 in projects the group claims most likely attributed to Byrd.

Whether West Virginia voters endorsed their senator's political stands on other issues, it didn't matter for he was their rainmaker and why he was elected a record nine terms.

Even as age was wearing down the old warhorse, the last two budget sessions of 2008 and 2006 indicates he was still on his game.

In 2008, Byrd sent $326 million to West Virginia which was $179.80 per person. It ranked 4th nationally. The national average was $33.77 per person.

In 2006, it was $239 million in pork projects that amounted to $131.58 per person when the national average for all other states was $30.55.

Let's put aside all the statues, monuments, roads, highways, bridges and buildings named after Sen. Robert Carlyle Byrd in West Virginia. In stead, let's peek at the year 2005 for specific allocations he and his constituents deemed necessary to be paid by other people's money:

Agriculture -- $11,452,000

   -$4,418,000 for the GIS Center of Excellence at WVU

   -$3,638,000 for the Appalachian Fruit Laboratory in Kearneysville

   -$860,000 for Appalachian small farmer outreach

   -$711,000 for aquaculture product and marketing development

   -$654,000 for agriculture waste utilization research

   -$569,000 for water pollutants research

   -$300,000 for the Potomac and Ohio River Basin Soil Nutrient Project

   -$150,000 for turfgrass research in Beaver

Energy and Water -- $75,372,000

   -$25,000,000 for the Marmet Lock on the Kanawha River

   -$9,000,000 for the Nuclear Engineering Teaching Laboratory Training Facility at Camp Dawson

   -$6,600,000 for Bluestone Lake dam safety

   -$59,000 for Island Creek at Logan

Interior -- $18,066,000

   -$4,275,000 for the New River Gorge National River

   -$3,400,000 for Harpers Ferry National Historic Park

   -$1,086,000 for molecular biology and a water resource study at Leetown Science Center

   -$1,000,000 for freshwater mussel recovery and the Wild Fish Propagation Center at White Sulphur Springs National Fish Hatchery

Labor/HHS -- $56,528,000

   -$20 million for WVU to construct a Biomedical Science Research Center

   -$4 million for Mountain State University to construct the Allied Health Technology Tower

   -$2 million for Marshall University for a mobile medical unit that will provide pediatric care to children in rural areas of Wayne, Lincoln, and Cabell counties

   -$1,050,000 for the West Virginia High Technology Consortium Foundation

   -$135,000 for the Kanawha County Board of Education for the Herbert Hoover High School Technology Project

Military Construction -- $23,150,000

   -$13 million for a C-5 airport parking apron/hydrant system at Eastern West Virginia Regional Airport in Martinsburg

   -$6 million for a fire crash rescue station at Yeager Air National Guard Base

   -$4,150,000 for a C-5 flight simulator at Eastern West Virginia Regional Airport in Martinsburg

Transportation/Treasury -- $95,350,000

   -$15 million for the King Cole Highway in Mingo County

   -$15 million for Corridor H

   -$3 million for improvements to U.S. Route 35 in Mason County

   -$1.4 million  for WVU’s Exhaust Emissions Testing Initiative

   -$750,000 for the I-95/West Virginia Drive Interchange

   -$200,000 for street scape improvements in Berkeley Springs, which offers visitors “state-of-the-art spas, unique shops and local arts, all surrounded by West Virginia’s splendid outdoors.”

Veterans Affairs/HUD -- $61,429,250

   -$4,296,000 for the Vandalia Heritage Foundation

   -$2,037,000 for Glenville State College for the construction of a new campus community center and the planning and design of a new science center

   -$1,250,000 for the McDowell County Commission for infrastructure and site development at Indian Ridge Industrial Park

   -$750,000 for Beckley for downtown revitalization

   -$657,000 for the Greenbrier Valley Economic Development Corporation in Lewisburg for facilities construction

   -$97,000 for the Strand Theatre Preservation Society in Moundsville for theatre renovations

   -$97,000 for the Tyler County Commission for facilities construction and renovations

   -$72,750 for the Wetzel County 4-H Camp in Martinsville for facilities renovation.

Sen. Byrd was the "conscience" of the U.S. Senate who rewrote Senate rules and carried a copy of the U.S. Constitution in his coat pocket at all times.

But most of all he was the gravy train express for West Virginia and the epitome of when all is said and done the only thing that matters is looking out for the people who got him there. 

-----------------

EPILOGUE

My condolences to the Byrd family and the people of West Virginia. The obituary I have written is not an indictment of the man who died at age 92. It is the portrayal of a political reality in which our system of governance works in the narrow prism of pork and earmarks. For a man who prided himself on the rule of law and the constitution, Sen. Byrd turned his back on a process by abusing power as a senior committee member and condoning the practice of earmarks allowing federal money spent without a hearing. But it is a proven process in Congress where deals are made under the umbrella that if you vote for my project, I'll vote for your lousy bridge to no where in some other state.

Rumors, Heads Fly In Afghan-Pakistan-Taliban Talks

There are conflicting reports out of the Afghanistan capital of Kabul that President Hamid Karzai has held face-to-face talks with Sirajuddin Haqqani, leader of a particularly brutal militant group with ties to al-Qaida.

Al Jazeera, a normally reliable Arab news agency, reported the meeting Sunday. The presidential palace denied such a meeting. The U.S. Embassy in Kabul had nothing to report.

British Foreign Secretary William Hague said earlier in the week that that the Haqqanis were probably irreconcilable with the Afghan government and unlikely to give up their al-Qaida ties.

And CIA Director Leon Panetta told ABC's Sunday news show "This Week" he was skeptical because militants had no reason to negotiate seriously.

All who did speak pointed the finger at Pakistan's army and intelligence service brokering the meetings. Al Jazeera said the Pakistan officials accompanied Haqquani to the talks.

The Haqqani network is a group high on the CIA's hit list that is believed to have been behind some of the most sophisticated attacks across Afghanistan.

Al Jazeera reporter Zeina Khodr said Pakistan is trying to forge a deal that would safeguard its interests in Afghanistan.

Besides the U.S., Pakistan arch enemy India has sent more troops to its part of Kashmir and eastern Afghanistan to fight militant groups it says Pakistan supports.

"We have seen no evidence that they are truly interested in reconciliation, where they would surrender their arms, where they would denounce al-Qaida, where they would really try to become part of that society,” Panetta said.

The top U.S. intelligence official admitted the American-led counterinsurgency effort is facing unexpected difficulties which leads him to believe no Taliban force would contemplate a power-sharing arrangement in Kabul.


Rumors of the Karzai-Taliban talks have circulated since last Wednesday when President Obama fired Gen. Stanley McChrystal and replaced him with Gen. David Petraeus.

Karzai has expressed willingness to talk with Taliban leaders in the past year but those signals, U.S. officials claim, were intended to pacify local constituents.


The Times:

Panetta reiterated the narrow goal Mr. Obama set for the Afghan war: “The fundamental purpose, the mission that the president has laid out, is that we have to go after al-Qaida. We’ve got to disrupt and dismantle  al-Qaida and their militant allies so they never attack this country again.” 

Such comments fly in the face of intelligence estimates of only about 100 al-Qaida terrorists fighting in the Afghan provinces. However, such estimates are about six months old and many foreign fighters may have returned to join the Taliban in the summer battles.

The Times:


But Mr. Karzai and Pakistani leaders believe that with the United States scheduled to begin a withdrawal next year, it makes sense to work aggressively toward a coalition that would involve elements of the Karzai government and the Taliban, both largely from the dominant Pashtun ethnic group. That has led to nervousness on the part of Tajiks and other ethnic minorities, which fear Pashtun domination. 

With casualties rising among NATO forces fighting in the south, Taliban atrocities have too. MSNBC:

In the latest such violence, the headmaster of a high school in eastern Ghazni was beheaded by militants on Saturday, the Education Ministry said. A high school in the same district — Qarabagh — was set on fire the same day.



--------------------

EPILOGUE

If the U.S. is spending about $63 billion to ramp up the Karzai government and he negotiates a settlement with the Taliban which would make Pakistan happy, wouldn't the thought occur to Washington to get the hell out. Finally.

New Research Finds Fat Surgery A Family Success

I have battled obesity most of my adult life and in the past year considered gastric bypass surgery or at least a lap band procedure.

I mention it only because a story Saturday is circulating about a New Jersey researcher who concluded two family members having the surgery are more successful in weight loss and improved health yardsticks than those who try it alone.

That makes sense even though it rules me out since I'm single.

Dr. Gus Slotman, a clinical professor of surgery at the University of Medicine and Dentistry of New Jersey — Robert Wood Johnson Medical School, said the best results were competitive siblings who lost 86% of excess weight compared to 60% of patients doing it solo.

Slotman announced findings of his three-year clinical research at the annual meeting of the American Society for Metabolic & Bariatric Surgery Friday. 

He compared 91 patients undergoing surgery with a family member to a group of bypass surgery patients matched in age, gender and body mass index (BMI), who went through it alone. 

“Families have a built in support system that can turn a good result into a great result, particularly during the first year after surgery when people are having to dramatically change what they eat and adjust to a new lifestyle,” says Slotman...

The benefits went way beyond the weight loss. A year after surgery, diabetes had resolved in 65% of those who had surgery with a family member, as compared to 31% of those who had surgery alone. High blood pressure went down to normal in 60% of those who had surgery with a family member, as compared to 33% of those who had surgery alone.

I have been intrigued with the successes of gastric surgery since watching a "60 Minutes" segment last year and recommendations from my health insurance broker.

My insurer, Health Net, is not so ecstatic even though it could save them a bunch of money.

My primary physician isn't exactly floored with the idea either as she outlined the game plan. 

First, I must have supervised weight-loss diet and weigh-ins for six months. Just finished that cycle. After losing 21 pounds on Nutri-System I hit a wall and lost only one in the past two months.

Second, I would be referred to a gastric surgeon to determine if the operation was mandatory to the degree of being a life-or-death decision. 

Only with both primary and surgeon signing off would I undergo surgery covered by insurance of which I would pay the 15% balance due. Not knowing the cost, I doubt I could afford it.

Even though my weight loss has improved my diabetes now requiring less dosages of insulin and my blood pressure and cholesterol levels normal, my age is a factor which may limit me to the least invasive lap band procedure. Two years ago my cardiologist refused open heart surgery to remove the pericardium, the protective sac around my heart, because he didn't believe I could survive the trauma.

What I don't understand from the research I is how anyone could not benefit, especially from the more invasive bariatric surgery.

In layman's terms, it shrinks the stomach where it tells you in pain it can't take any more rather than a chemical signal sent to your brain with the same message. My brain has the uncanny knack of telling me to hell with it and eat on.

NutriSystem has helped me eat less and more nutritionally. Cheeseburgers with fries and three-egg breakfasts with sausage and hash browns and dinners with a pound or more of red meat topped with a pint of ice cream for dessert are ancient history in my household. Don't miss them and the thought makes me want to vomit.

It all starts and ends in the head. Because of the 22 pounds lost since the first week of February and despite a mountain to go, I for the first time in nearly 50 years like my body.

The David Weigel Saga On Speaking Out of School

Let's see if I got this right. The Washington Post hired an on-line reporter to cover the Tea Party and other conservative causes because his resume was that of a libertarian conservative.

Three months later the Post fires the reporter, Dave Weigel, because a gossip website published snide remarks in emails  he wrote about the very conservatives he was paid to cover.

That's when all hell broke loose. You would have thought Ben Bradlee, managing editor of the Washington Post, had fired Bob Woodward and Carl Bernstein three months into the Watergate burglary story back in 1972.

To give you an idea of the thunder bolts launched by the gods of media heaven, I will take you on a reactionary journey from my colleague Kathy Kattenburg's blog roundup in The Moderate Voice, to Ezra Klein's defense to a satire on the Post's ombudsman.

I hope you were taking notes because I defy anyone to explain and define what exactly is an "objective" reporter.

A good reporter is always accurate in his factual presentation. He is never objective because there is never enough space or air time to list every single fact to an issue that satisfy every reader or listener.
Reporters are biased. Get over it. They're humans as the rest of us. The trick which isn't always achieved is setting those internal mechanisms aside when sitting in front of a keyboard or live mik.

The experienced reporters don't express their deepest prejudices in writing unless they want those opinions thrown back in their face as happened to David Weigel. We live in a nasty society and Washington D.C. is especially cruel. If you live by the sword, you die by the pen, I always say.

I lived by a code of journalistic ethics which I stretched to the hilt. It was part of selling a story called an "angle" or "slant."

I would and still do "slant" the facts to support an "angle" that Jack Abramoff was a crook but by God had facts to support it and reactions from other to say I was full of prunes.

Don't laugh. We lived by the credo "fair and balanced" long before Fox News stole the term and abused its meaning.

The best reporters tell stories that grab readers by the neck. It's the "hook" that the beast lures to catch the reader in the first two paragraphs or the first two seconds of a broadcast.

Much is made of Weigel being hired by the Post to write about the Tea Party and conservatives because he was a libertarian and understood the mindset.

That is a valid reason most of the time. I mean you don't hire someone in sports to cover the Federal Reserve.

My first truly great editor Jim Dean at the old Santa Ana Register was assigning new beats for reporters and one vacancy was covering San Juan Capistrano. I volunteered, boasting I was raised there and knew the town and its rich history.

Jim looked at me with a disgusted look. "That's as bad as asking Bobby Kennedy to cover his brother Jack," Jim mocked. He assigned me to the Newport Beach beat.

As young reporters develop their trade, smart editors will take notice and assign them stories and beats where they have shown some expertise.

I made my mark as a police and government reporter. I recall walking into the news room one day. The night city editor handed me a press release and told me to interview the Coldwell Bank chairman of the board. At the time all I knew was banks were for checking accounts and auto loans.

I filed the story but not after I called the Coldwell PR guy. With total loss of pride, I read the story to him for blatant errors and gross misrepresentations. I then informed the night city editor never to pull that on me again. He informed me I was the only reporter available and the assignment came directly from the publisher's office. Oh.

But I digress. David Weigel got caught in the same trap as Helen Thomas and hundreds before them. You would think in today's age of 24/7 cable, blogs, emails, Facebook, Twitter and gadgets anyone can record and launch immediately to cyberspace, they would learn.

They don't.

William Shakespeare was right as far back as 400 years ago. "Kill the messengers," he wrote in Hamlet.

The most prestigious broadcasters in my time were Edward R. Murrow and Walter Cronkite. They were maligned by the far right, among other things, for working for CBS they called the Communist Broadcasting Company.

The best writer/reporter I ever knew was a despicable chap of flawed character, M. J. Lagies, who most of you probably never heard of.  The targets of his sharp pen hated him but none ever beat him in a court of law.

Financial Reform Comes Cheap Compared To What Fannie And Freddie Lurk

In the polarization of politics, parsing words of politicians has become a fine art form by opponents to score points as if the public has a mental scoreboard in their heads.

I'm drawing from memory here as most voters would on criticism tossed at House Speaker Nancy Pelosi and Senate
Banking chairman Chris Dodd.

After passage of the health reform legislation, Pelosi said we won't know what's in the law until it plays out in real time.

After the joint conference agreement on the pending financial reform package, Dodd said he hoped the new regulations would work.

That's how I understood what they were trying to say.

The Republican attack machine framed it differently. They suggested Pelosi didn't bother to read the health legislation. And Dodd was dabbling in some unproven experiment for heavy-handed governmental interference of the capitalist system.

Both pieces of legislation are 1,500 to more than 2,000 pages thick. Not in a million years am I so altruistic that I believe all 535 House and Senate members read every word of both legislative proposals.

Nor do I believe every subsection of each law will work as intended.

Laws are not set in concrete. They can be amended. They can be improved to meet the test of pragmatism. They can be dropped as failures. Awkwardly, it takes Congressional action to do that.

During the 1992 presidential campaign, the one proposal Ross Perot advocated I subscribed to was that each law passed by Congress have a two to five-year sunset clause to determine if it was working.

Now that's a reasonable concept rather than the Republican battle cry to repeal the health reform law because they don't like the one section, of hundreds, that mandates purchase of insurance coverage. Some opponents, such as former Alaska half-Gov. Sarah Palin, I presume would not settle for less than a repeal of the entire legislative act.

As for the financial reform legislation, no one other than a cheer-leading President Obama, who does not have a vote, is so bold as to predict passage, especially in the Senate.

What Dodd maybe was referring to as a "hope," is based on what a batallion of lawyers will write as specific regulatory rules applying to each subsection of the massive legislation overhauling our financial industry how it conducts business.

How that plays out is anyone's guess. Here are two analyses that may help in determing the prospective winners and losers.

What I object to is that the financial reform package exempted Fannie Mae and Freddie Mac which were instrumental in creating the housing market collapse.

The Congressional Budget Office says Fannie and Freddie will end up costing taxpayers more money than the historic bailout of the financial industry.

Congress voted in 2008 to effectively place the two mortgage giants in a federal receivership  by taking over 80% of its paper holdings.

So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage. The CBO predicts that the final bill could reach $389 billion.

Rather than being in the lending business, Fannie and Freddie are just as active in the foreclosure end of it.

Every 90 seconds in the first quarter of this year the two giants foreclosed on a home they financed and guaranteed to pay back investors.

By the end of March they owned 163,828 foreclosed homes, about the same number of total households in Seattle.

"Our business is the American dream of home ownership," Fannie Mae declared in its mission statement, and in 2001 the company set a target of helping to create six million new homeowners by 2014. The New York Times, reporting from Casa Grande, about an hour's drive from Phoenix:

Fannie and Freddie increased American home ownership over the last half-century by persuading  investors to provide money for mortgage loans. The sales pitch amounted to a money-back guarantee: If borrowers defaulted, the companies promised to repay the investors.
Rather than actually making loans, the two companies — Fannie older and larger, Freddie created to provide competition — bought loans from banks and other originators, providing money for more lending and helping to hold down interest rates.


They paid no heed to predator lenders requiring no money down, balloon payments nor financial statements
from new home buyers' ability to pay.

The result is Fannie and Freddie today are the nation's largest landlords.

The two companies together accounted for 17% of real estate sales in Arizona during the first four months of the year, almost three times their share of the market during the same period last year, according to an analysis by MDA DataQuick. 

It costs the government about $10,000 to sell each foreclosed house and recoup less than 60% of what the homeowner failed to pay after a resale at deflated market values than the original mortgage purchase price.

Some sales are to investors who "flip" the houses for quick profits after the government repaired interior damage and maintained its yards.

Fannie more than Freddie have programs to new homebuyers who pledge to use the houses as their primary residence.

As to the maintenance costs, just the cost of contracting mowing an empty foreclosed property costs $80 per month. The Times:

That's a monthly grass bill of more than $10 million.
All told, the companies spent more than $1 billion on upkeep last year. 

To ensure more new homeowners buy the foreclosures, Fannie and Freddie agreed to sell to nonprofits usuing taxpayer grants from the federal Neighborhood Stabilization Program.

Chicanos por la Causa, which won $137 million under the program in partnership with nonprofits in eight other states, plans to buy more than 200 homes in Phoenix in the next two years. It plans to renovate them to sell to local families.

Another gimmick:

Fannie Mae last summer announced that it would give people seeking homes a "first look" by not accepting offers from investors in the first 15 days that a property is on the market. It also offers to help buyers with closing costs, and prohibits buyers from reselling properties at a profit for 90 days, to discourage speculation. Fannie Mae said that 68.4% of buyers this year had certified that they would use the house as a primary residence.

Fannie Mae and Freddie Mac is our problem because Congress bought them for us without our asking.