I love the smell of "banker repentance" in the morning. Case in point: One of the multi-billion-dollar settlements that's in the pipeline and simmering on the stovetop is the $25 billion robo-signer deal. And it's about to be served up cheese royale. In fact, if you could bottle that smell you'd have a pandemic legion of ex-homeowner bankrupts overdosing nationwide. Although technically, it's a day late and a dollar short, but leftovers are never a bad thing if you're hungry enough. More specifically, last month a federal judge signed off on the deal that affects the top five mortgage servicers. (As a precaution, let's check the judge's signature and hope it isn't from his law clerk.)
Unfortunately, based upon the current construct of the settlement -- inked by 49 of the 50 attorney generals, there's only scraps to go around for the former homeowners. How many scraps? About $2,000 worth! That's the amount to be given to those who lost their home through the negligent foreclosure practices of the large banks.
Here are the specifics: About $17 billion is earmarked for foreclosure prevention to distressed homeowners, another $3 billion to the underwater financing programs, and about $5 billion to the states and federal governments.
The good news, however, is if correctly constructed this settlement has the potential to be thought of as juste reparations. The point of reparations, either it be from war time, natural disasters or grave acts of economic damage, is to make the victim whole -- as reasonable as possible. Yet, for a battle-scarred homeowner public, they will find little consolation in the proposed "reparations" that only parse out $2,000 for a family that lost their home.
"The bottom line about this settlement, is it's okay, it's a step forward, it's a step in the right direction. But let's not kid ourselves, there's a hell of a lot more that needs to be done," said Ira Rheingold, executive director of the National Association of Consumer Advocates.
Predictably, the Obama administration's top lap dog was genuinely excited by the settlement. That would be Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development. During a May 3, 2012 meeting with state officials in Nevada to discuss the settlement, Donovan stated, "We structured (the settlement) in a way to get immediate help to homeowners, to keep them in their homes and more broadly to help lift housing markets that have been hardest hit." Donovan did add, "This is not something you're going to turn around overnight, it's too deep a hole. There is help available, and it's free help... (People) should not be terrified of picking up the phone."
A true measurement of democracy for any country is the way in which it cares for it's inflicted and damaged. Most can agree that homeowners have been damaged. Rhetorical question here, but aren't we the country with the Statue of Liberty that has inscribed upon its side: "Give me your tired, your poor. Your huddled masses yearning to breathe free"?
Turns out we were "branding" ourselves before we even know what it was! Madison Avenue would have been proud -- or at the very least Mad Men. Neither of which existed before or after France gave us Lady Liberty as a better-late-than-never house-warming gift.
In terms of Lady Liberty, with her inscription tattooed to its side, there was the implicit suggestion that we took care of our own. Nowadays it seems to be a tramp stamp. Yet somewhere along the way, selective amnesia set in and financial imperatives trumped the human imperative. As an example of a moral imperative, U.S. Marines don't leave the battlefield without their dead. There's a reason they do that. That's because it's personal.
Yet, there seems to be an exemption for that personal moral imperative if your Average Joe mortgage homeowner who didn't read the fine print on the mortgage closing documents. We as a country were however able to "turn the other cheek" for America's banking elite. But if you're a citizen, it suddenly becomes an "eye for an eye." Irony loves irony.
That irony is brought to you by America's far Christian right. (Can somebody get these guys a GPS device? Radio Shack is having a sale.) And while you're at it, have someone from the Geek Squad correct the GPS on Mr. Lefty over there? He keeps walking around in circles and needs to be righted in the correct direction.
But before we start to bastardize everyone who lost their home from financial mismanagement and may have filed bankruptcy as a result, keep in mind that bankruptcy relief is written in the U.S. Constitution. (Article 1, Section 8, Clause 40).
And for the authors of that glorious document, who were a bunch of old white guys who had a penchant for wearing wigs, stockings and tight pants, with ownership rights over black slaves -- they had a tremendous amount of economic foresight. Who knew!
For the left side of my brain that has empathy for the right side of the aisle, which primarily consists of strict constitutional constructionists -- and who somehow think they own the Bill of Rights. More particularly, bankruptcy was a part of the U.S. Constitution as a financial management tool to assist those who desired to start anew -- in order to re-contribute to American society. (Don't believe me? Look it up in Wikipedia.) And for the "non-believers" out there, some of America's greatest bankrupts included a guy by the name of Abraham Lincoln, Mark Twain and Milton Hersey -- a chap who could make a mean batch of chocolate.
It's especially interesting to hear the rhetoric these days when you have ideological, illogical people like Congressman Paul Ryan invoke Christianity as a defense for his dogma, whose political religion preaches the "pull yourself up by the boot straps" bullshit. Comically, the Democrats have invoked JC's name as well -- that's short for Jesus Christ -- when jumping on the "What Would Jesus Do" (WWJD) bandwagon.
Although it remains to be seen, the fine print of the settlement from the Attorney Generals (AGs) will likely be an act of double jeopardy on the foreclosed, exposed and disposed in America. But ultimately, it's the preferential treatment of corporations/banks over the financial wherewithal of its own citizenry, which is being spearheaded by a cabal of JD's (that's short for Juris Doctorates), who are the AGs from 49 states in the Union. Although New York and California had been the last hold outs of the $25 billion settlement, Attorney Generals Eric Schneiderman (N.Y.) and Kamala Harris (Calif.) essentially caved in. The lone dove in this settlement was Oklahoma Attorney General Scott Pruitt. Who is OK.
This wouldn't be the first time America has granted citizen-like rights to nonhumans. Exhibit A: In the Citizens United v. Federal Election Commission decision by the Supreme Court in 2010, the court ruled that government may not ban political spending by corporations in candidate elections. Viewed another way, the Supreme Court ruled that corporations are "people" and thus are legally entitled to donate money to political candidates!
If America has now (by way of fiat from the Supremes) given "flesh and blood" status to an inanimate object such as a corporation, why has America been thrifty toward its own flesh and blood? It can be argued that those in need have been truncated out of a deserving financial resurrection. That they have been truncated out of an equitable reparation. One man's reparations are another man's pittance.
To be clear, no one questions the political left or right on the efficacy of reparations. As a concept in the abstract, it's a perfect model of social, economic and moral rectification.
You didn't see Republicans getting too upset over the $2 million-plus settlement per 9/11 victim. And most Americans were comfortable with Ronald Reagan's $20,000 settlement per Japanese internment victim during WWII. In fact, Kenneth Feinberg, who was the Special Master for the 9/11 Compensation Fund, in addition as the Administrator of the Gulf Coast Claims Facility (GCCF), might be a good guy to tap for what I would call the Great Recession settlement -- the mother of all settlements.
Presently though, Mr. Feinberg is holed up in New Orleans taking care of reparations from a little oil spill a couple of years back from a company called BP. Nonetheless, I'm sure he might be able to squeeze in a conference call to the AGs, who can't seem to agree on what color to wear to the prom.
Although the former is a gross simplification of facts for this philosophical argument -- and admittedly a slightly skewed metaphorical portrait; space limitations require this to be a KISS argument (which stands for Keep It Simple, Sidney). But work with me on this: If America has incorrectly righted the way and prioritized corporate citizenry in first position, but then somehow in the fog of stupidity literally short changed its own "flesh in blood" taxpaying actual citizens -- is this someway a convoluted form of economic justice?
In bankruptcy court, debtors are paid in order of priority. Since when are people classified less than chattel? (Don't let me bring up Dred Scott v. Sandford.) The whole concept of righting a wrong requires punitive repercussions to be enforced upon the wrong doer.
What's on the table here in connection with the robo-signer settlement is largely superficial. In fact, in true Monty Python fashion, it might be considered a "mere flesh wound" to the banks. This "mere flesh wound" is the true litmus test that is proof positive that this prospective settlement is not a settlement, but simply an appeasement.
The day they "execute" a corporation in Texas is the day that a corporation can be considered a citizen. And hence, the day a majority of the state attorney generals' act in their legal capacity to protect its citizens from mortgage raiders -- since they themselves enjoy free public housing and don't actually have a mortgage to make payments on, will be a day America's top law enforcement officials will treat its citizens like corporations. (What!) To be certain, this welcomed incongruity might be embraced by poet Emma Lazarus, who wrote in 1893:
"Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door."