Tag: Politics

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial: The Radical Supreme Court

The Supreme Court’s landmark decision upholding the Affordable Care Act was a deft turn by Chief Justice John Roberts Jr., who voted with the court’s four moderate liberals for the first time in a 5-to-4 ruling. Yet, while they upheld the law’s mandate for individuals to buy insurance under Congress’s taxing power, the chief justice joined the four other conservatives to reject that provision under the Constitution’s commerce clause.

That rejection underscores the aggressiveness of the majority’s conservatism and marks a stunning departure from the long-established legal consensus that Congress has broad power to regulate the economy.

Paul Krugman: Europe’s Great Illusion

Over the past few months I’ve read a number of optimistic assessments of the prospects for Europe. Oddly, however, none of these assessments argue that Europe’s German-dictated formula of redemption through suffering has any chance of working. Instead, the case for optimism is that failure – in particular, a breakup of the euro – would be a disaster for everyone, including the Germans, and that in the end this prospect will induce European leaders to do whatever it takes to save the situation.

I hope this argument is right. But every time I read an article along these lines, I find myself thinking about Norman Angell.

Who? Back in 1910 Angell published a famous book titled “The Great Illusion,” arguing that war had become obsolete. Trade and industry, he pointed out, not the exploitation of subject peoples, were the keys to national wealth, so there was nothing to be gained from the vast costs of military conquest.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

The Sunday Talking Heads:

Up with Chris Hayes: Joining Chris at 8AM ET will be: Gov. Brian Schweitzer (@brianschweitzer), Democrat of Montana; Rep. Peter Welch, Democrat of Vermont and member of the House Oversight and Government Reform Committee; Kansas Secretary of State Kris Kobach, Republican and co-architect of Arizona’s controversial immigration statute, SB 1070; Heather McGhee (@hmcghee), vice president of policy and research at the progressive think tank Demos; Maria Hinojosa (@Maria_Hinojosa), anchor of NPR’s Latino USA and president of Futuro Media Group; and Glenn Greenwald (@ggreenwald), former Constitutional and civil rights litigator, contributor at Salon.com.

The Melissa Harris-Perry Show: The guest list was not announced.

This Week with George Stephanopolis: This Week’s guests are Vicki Kennedy, the widow of the late Sen. Ted Kennedy; White House chief of staff Jack Lew and House Budget Committee chair Paul Ryan, R-Wis.

The roundtable debates the Supreme Court’s key health care and immigration decisions and all the week’s politics, with Keith Olbermann, ABC News’ George Will, Democratic strategist and ABC News contributor Donna Brazile, former Rep. Artur Davis, and “Nightline” co-anchor Terry Moran, who covers the Supreme Court for ABC News.

Face the Nation with Bob Schieffer: Mr. Schieffer’s guests are Sen. Chuck Schumer, D-N.Y., and Sen. Tom Coburn, R-Okla.; , Gov. Martin O’Malley, D-Md., and Gov. Scott Walker, R-Wisc.

The roundtable breaks down the political and legal implications of this week’s Supreme Court decisions: POLITICO‘s John Harris, National Journal‘s Major Garrett, CBS News’ John Dickerson and Jan Crawford.

The Chris Matthews Show: This Week’s Guests Joan Biskupic, Reuters Supreme Court Correspondent; John Heilemann, New York Magazine National Political Correspondent; Katty Kay, BBC Washington Correspondent; and Pete Williams, NBC News Justice Correspondent.

Meet the Press with David Gregory: MTP’s guests are House Minority Leader Rep. Nancy Pelosi (D-CA); Obama supporter former Gov. Howard Dean (D-VT) and Romney Supporter Gov. Bobby Jindal (R-LA).

The roundtable guests are NBC’s Savannah Guthrie and Chuck Todd; Washington Post columnist Eugene Robinson; and the National Review‘s Rich Lowry.

State of the Union with Candy Crowley: The SoU’s guests this Sunday are Jack Lew, President Obama’s Chief of Staff; Jennifer Granholm, the former Michigan Governor; Carly Fiorina, the former Hewlett Packard CEO; CNN”s White House Correspondent Dan Lothian, and USA Today‘s Washington Bureau Chief Susan Page; and Colorado Gov. John Hickenlooper.

While the attention was on the SCOTUS ruling on the affordable Care Act, this is what was going on under the radar at the Federal Reserve:

Federal Reserve, Regulators Arguing for More, Quicker Foreclosures

by David Dayen

The Federal Reserve has decided to put their thumbs on the scales of justice, explicitly attempting to overturn state-based anti-foreclosure laws on the spurious grounds that they hurt the economy.

This story by Tim Reid in Reuters cites the Fed arguing against the kind of laws in states like Nevada – and soon, California – that have saved hundreds of thousands of homes from foreclosure.

   “State and federal laws enacted to protect homeowners from eviction in the wake of the 2008 housing crash may be extending the slump, according to a growing number of economists and industry experts.

   Foreclosures have all but ground to a halt in Nevada, which passed one of the stiffest borrower-protection laws in the country last year. Yet the housing market is further than ever from recovery, local real estate agents say, with a lack of inventory feeding a “mini-bubble” in prices that few believe is sustainable.

   A recent U.S. Federal Reserve study found that in states requiring a judicial review for foreclosure, delays associated with the process had no measurable long-term benefits and often prolonged the problems with the housing market.”

There’s been a concerted effort to overturn due process in these judicial foreclosure states, on the theory that foreclosures must be quickly flushed through the system so the market can “clear.” Incredibly, house organs like the Fed still express this opinion even after years of documented evidence of illegal foreclosures using false and forged documents in court. The explicit recommendation from the Federal Reserve is to react to systematic foreclosure fraud by closing the courthouse doors to troubled borrowers.

The entire premise that judicial foreclosure states are prolonging the housing slump is completely spurious. Nothing furthers the housing slump more than a spate of foreclosures flooding the market, increasing the supply of distressed homes that sell cheaply and bringing down property values in a particular area. That’s what the Fed is arguing for.

Yes, they’re serious. This is basically siding with the banks, giving fraud as pass and screwing the homeowners and housing market with a flood of foreclosures. And Reuters and other trade publications have decided to publish the propaganda that keeping people in their homes is causing the market to slump and the solution is more foreclosures.

Freelance writer and attorney who helped expose the foreclosure fraud, Abigail Field takes on the Reuters “b.S.” sentence by sentence, shredding the propaganda that the housing crisis was caused by homeowners but by the banks themselves who created the shadow market of foreclosed homes and the underwater crisis. She makes these four points:

First, en route to committing mass securities fraud the banks dishonored their contracts and failed to document the mortgage loans as they promised investors they would. As a result, they’ve had to fabricate nonsensical, obviously fraudulent and often sworn statements to try to foreclose. It’s that swamp of fraud that’s causing the delays.

Second, banks are manipulating housing market inventory, letting properties they own rot, not listing them for sale, and when auctioning them, sometimes outbidding third parties.

Third, bankers’ securities fraud broke the secondary market for non-government backed mortgages. As a result, there’s a lot less capital to lend wannabe homeowners.

Fourth, lender-driven appraisal fraud led to such inflated prices that the underwater problem is directly attributable to them.

Rather than deal in the reality that our housing crisis is banker driven and dare push the meme that bankers must be held accountable, Reuters is helping bankers (and their government allies) push the idea that if only we made it easy for bankers to use their fraudulent documents, the housing market would heal quickly.

There’s even more that exposes not just the Federal Reserve’s pass on bank fraud but the how the Obama administration’s so called homeowner bail out is just more hand outs to the banks:

Sentences ten and eleven:

“The increasing doubt about the impact of anti-foreclosure laws on the long-term health of the housing market calls into question a basic principle of the Obama Administration’s approach to the housing crisis.

Many Democrats, including Obama, say struggling homeowners should get more time to make good on their mortgage arrears, or have the breathing room to renegotiate their loans with lenders, especially in the wake of the “robo-signing” scandal in which banks were found to have falsified foreclosure paperwork.”

How I wish the Obama Administration’s approach had really been about helping struggling homeowners. Instead it has been mostly theatrics with gifts to the banks thrown in. Most recent example – the latest refinancing program has become a fee/profit center for the big banks. Moreover, if homeowners did “make good”, that would be better for everyone involved, including the broader market, but in the era of maximally predatory servicing, it’s not easy. Ditto with mortgage mods that work – and when they include principal reduction that’s meaningful, they work.

Hey, look! In sentence 11 we get the first whiff of banker wrongdoing. And wow, he not only uses the misleading “robo-signing“, but he also says “falsified foreclosure paperwork.” Foreclosure “paperwork” doesn’t sound that serious, though, does it? How about “falsified documents affecting property title”? Or, “lied under oath about how much borrowers owed and to whom?”

And as Yves Smith at naked capitalism notes in her article the lies get repeated ad nauseum:

The way Big Lies get sold is by dint of relentless repetition. In the wake of the heinous mortgage settlement, foreclosure fatigue has set in. A lot of policy people want to move on because the topic has no upside for them. Nothing got fixed, the negotiation process took a lot of political capital (meaning, as we pointed out, it forestalls any large national initiatives in the near-to-medium term), and Good Dems don’t want to dwell on a crass Obama sellout (not that that should be a surprise by now). But the fact that this issue, which ought to be front burner given its importance both to individuals and the economy, is being relegated to background status creates the perfect setting for hammering away at bank-friendly memes. When people are less engaged, they read stories in a cursory fashion, or just glance at the headline, and don’t bother to think whether the storyline makes sense or the claims are substantiated.

Just look at the headline: “Evidence suggests anti-foreclosure laws may backfire.” First, it says there are such things as “anti-foreclosure laws.” In fact, the laws under discussion are more accurately called “Foreclose legally, damnit” laws. Servicers and their foreclosure mill arms and legs have so flagrantly violated long-standing real estate laws in how they execute foreclosures that some states have decided to up the ante in terms of penalties to get the miscreants to cut it out. [..]

And that is perhaps the most remarkable bit, the failure to consider that gutting the protections to the parties to a contract undermines commerce. Borrowers in judicial foreclosure states paid higher interest rates due to the greater difficulty of foreclosure. So now they are to be denied what they paid for because the banks recklessly disregarded the procedures they set up and committed to perform? What kind of incentive system is it when we reward massive institutional failure with a bank-favoring settlement and supportive messaging from central bank economists? As Dayen stated:

   “So when these officials argue against laws like those in Nevada, which merely criminalize a criminal practice, or California, which provides due process for people having their homes taken from them, they’re arguing in favor of what amounts to a dissolution of justice.”

I don’t think you’ll read anything like this at Reuters. Shameful

First, this morning House Majority Leader Eric Cantor (R-VA) made the rounds of talk shows spouting how the Affordable Health Care bill can be repealed with a simple majority in the House and Senate since the bill was passed under reconciliation. Without a filibuster proof majority in the Senate, Ryan Lizza at The New Yorker points out the obstacles for that to happen:

Many Republicans, especially in the blog and talk-radio swamps, would cry, “Use reconciliation!” Readers familiar with the congressional debates of 2009-2010 will remember that this procedure allows certain budgetary measures to pass through the Senate with a simple majority. [..]

But reconciliation wouldn’t work here-the process can only be used for policies that have budgetary effects and a C.B.O. score. Much of the A.C.A., such as the insurance exchanges and subsidies, would fall under these categories. But a lot of it, including the hated individual mandate, does not. Repealing the exchanges and subsides without repealing the mandate and the other regulations and cost controls in the law would create a health-care Frankenstein that a President Romney would be rather nuts to support.

That said, the SCOTUS ruling has some rather complex ramifications and Chief Justice Robert’s ruling was rather sly. First was there are the three bit from SCOTUSblog that Lambert Strether pointed out at Corrente:

First, here’s the reasoning:

   Essentially, a majority of the Court has accepted the Administration’s backup argument that, as Roberts put it, “the mandate can be regarded as establishing a condition — not owning health insurance — that triggers a tax — the required payment to IRS.” Actually, this was the Administration’s second backup argument: first argument was Commerce Clause, second was Necessary and Proper Clause, and third was as a tax. The third argument won.

Second, here are the implications for the role of the State as we have understood it from the New Deal onward; what Phillip Bobbitt would call a change a Constitutional Order:

   The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress’s authority to pass social welfare laws.

Third, here is the new Constitutional Order:

   Using the tax code — especially in the current political environment — to promote social welfare is going to be a very chancy proposition.

Chancy or not — and it will be the precariat that suffers mischance, and not the elite, in any case — that’s what they’re going to do.

Next from Scarecrow at FDL News Desk who argues that Chief Justice Robert’s “incoherent decision” will “shackle congress” and “screw millions of uninsured:

In the process, he did violence to constitutional law and logic.  Consider, for example, Robert’s logic on the “mandate.”  In saving the “mandate,” Roberts essentially defined it as not a mandate.  You are not really required to purchase insurance, he noted; instead, you may choose not to purchase insurance and instead pay a minor tax.  As we know, taxing is just a way to collect revenues, a contribution to the common, aggregate costs of public programs.  In this case, the program is paying for many people’s health care through a system of risk/cost sharing.

But if the so-called mandate is not really a mandate but rather an option that can be avoided by paying a tax, and if a legitimate purpose of this tax, as government and amicus briefs argued, is to help cover aggregate costs across a pool of many insured and uninsured people, then what does that do to Robert’s argument about the Commerce Clause?  When arguing about the Commerce Clause, Roberts insists it’s a requirement to purchase a “product,” which forces you to take an action, and thus to engage in commerce when you would not otherwise have done that.  Regulating “inaction” is not permissible, Roberts argues.

But if, as Roberts concludes, the “mandate” is not a mandate, and the tax’s purpose is to help cover pooled costs, and not to buy a “product,” then there is no “mandate” to purchase a “product.”  So no one is forced to engage in commerce as Roberts framed it.  Indeed the “commerce” is already there in the risk sharing system across millions of people, all engaged in commerce by paying premiums into a pooled risk scheme.  Robert’s entire premise for striking down the Commerce Clause rationale is thus contradicted by his argument about how it’s permissible for Congress to enact a tax to support funding of collective health care costs.  That’s what the tax does; but it’s also what paying insurance premiums does.

Roberts’ reasoning on Medicaid is equally illogical. His premise is that Congress cannot expand an existing program administered by states that depends on shared state/federal funding by conditioning funding for the whole program on the states actually implementing the expansion.  As Brad DeLong observes, if Congress were just now creating a fully expanded Medicaid, to be implemented by states but mostly paid for by the feds, there would be no question that Congress could condition federal funding on the states actually carrying out the programs.  But if the program already exists for half the needy population, Congress cannot complete the program for the other half and use the same leverage to achieve the same degree of state cooperation.

As per the CBO, if the states actually implement the expansion and make an effort to get those eligible to sign up, 16 to 17 million more people will have health care coverage. But without that leverage to get the states to accept Medicaid expansion it leaves the poor between around 50% and 133% of the poverty line in a real no man’s land, because they would both be ineligible for Medicaid AND the coverage subsidies in the exchanges.

As for the states voluntarily opting in for the Medicaid expansion, David Dayen doesn’t think that will happen either, even though the cost for the states would only be responsible for less than 10% of the costs.

And being on the hook for even a small amount of funds isn’t going to make any of these governors happy. Heck, here’s a Democrat, former West Virginia Governor and current Senator Joe Manchin, making the argument for them:

   We should all recognize that the health care challenges that many West Virginians and Americans face are not going to go away unless Congress takes additional action to repair this bill. Now that the Court has ruled, we can move forward with fixing what is wrong with this bill and saving what is right. I have always been determined to reduce the burden on states from the Medicaid expansion, and this ruling affirms my position – and makes clear that states must have the flexibility to live within their means by determining Medicaid eligibility as each state sees fit. I have always said one size doesn’t fit all.

That’s going to be a compelling set of logic for a non-trivial number of governors. They’ll also distort how much the expansion would put their states “on the hook.” 26 states sued to eliminate the Affordable Care Act entirely, and they almost got there. Why wouldn’t they jump at the chance to eliminate the portion that creates half of the coverage benefits?

This isn’t going to be universal. New Mexico’s Republican Governor Susanna Martinez, for example, certainly sounds like she’ll take the money. But Southern states in particular, who paradoxically house the citizens most in need of the Medicaid expansion coverage, will be likely resisters at the outset. And it’s not like a lot of success in modern America comes from rallying at the grassroots level for poor and disenfranchised people.

As was noted by Ezra Klein of the Washington Post, opponents of the ACA see this as a win:

“We won,” said Georgetown law professor Randy Barnett, who was perhaps the most influential legal opponent of the Affordable Care Act. “All the arguments that the law professors said were frivolous were affirmed by a majority of the court today. A majority of the court endorsed our constitutional argument about the Commerce Clause and the Necessary and Proper Clause. Yet we end up with the opposite outcome. It’s just weird.”

Yes, it’s weird but so was the whole ACA bill from the very start.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

Paul Krugman: The Real Winners

So the Supreme Court – defying many expectations – upheld the Affordable Care Act, a k a Obamacare. There will, no doubt, be many headlines declaring this a big victory for President Obama, which it is. But the real winners are ordinary Americans – people like you.

How many people are we talking about? You might say 30 million, the number of additional people the Congressional Budget Office says will have health insurance thanks to Obamacare. But that vastly understates the true number of winners because millions of other Americans – including many who oppose the act – would have been at risk of being one of those 30 million.

So add in every American who currently works for a company that offers good health insurance but is at risk of losing that job (and who isn’t in this world of outsourcing and private equity buyouts?); every American who would have found health insurance unaffordable but will now receive crucial financial help; every American with a pre-existing condition who would have been flatly denied coverage in many states.

Richard (RJ) Eskow: Don’t Kid Yourself. It’s Still a Corporate Court. Here Are 10 Lessons From CEO Roberts

Was today’s ruling a victory for justice over corporate power? Did Chief Justice John Roberts rise above partisan differences because that’s where an honest reading of the law took him?

Nah. The majority on this Supreme Court is a wholly-owned subsidiary of Corporate America. Call it SCOTUS™ Inc., and it’s brought to you by the same fine folks that gave you Citizens United and Bush v. Gore. John Roberts is its CEO, not its chief justice.

The point isn’t to reinforce anybody’s cynicism. The point is to act more effectively on behalf of our ideals, by seeing things as they really are.

The heads of state of the EuroZone countries met in Brussels today for a two day summit to  try to come to an agreement on how to bail out two of its biggest members, Italy and Spain:

The 27 government chiefs will discuss buying Spanish and Italian government bonds to bring down borrowing costs that are near euro-era records, Finnish Prime Minister Jyrki Katainen said. He also proposed that bailout funds buy collateralized government debt in primary markets.

“I’ve come for very rapid solutions to support countries in difficulty on the markets,” French President Francois Hollande told reporters as he arrived in Brussels. Without specifying Spain or Italy, he said they “have made considerable efforts to deal with their public accounts.”

Leaders will consider short-term measures to stem the sovereign debt turmoil as EU President Herman Van Rompuy’s road map to strengthen the bloc’s common currency and financial oversight ran into immediate opposition from Germany. German Chancellor Angela Merkel has become increasingly isolated as Hollande, Italian Prime Minister Mario Monti and Spanish Premier Mariano Rajoy unite to push for quicker action to ease the crisis that emerged in Greece in late 2009.

Apparently all did not go German Chancellor Merkel’s way as she canceled her scheduled evening press conference. Or maybe she was watching her country’s football team get trounced by the Italians.

Euro 2012 Live Blogging: Italy 2 Germany 0

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

E. J. Dionne: Scalia Should Resign from the Supreme Court

Justice Antonin Scalia needs to resign from the Supreme Court.

He’d have a lot of things to do. He’s a fine public speaker and teacher. He’d be a heck of a columnist and blogger. But he really seems to aspire to being a politician – and that’s the problem.

So often, Scalia has chosen to ignore the obligation of a Supreme Court justice to be, and appear to be, impartial. He’s turned “judicial restraint” into an oxymoronic phrase. But what he did this week, when the court announced its decision on the Arizona immigration law, should be the end of the line.

Katrina vanden Heuvel: Women Who Don’t Have Anything Close to ‘Having It All’

Anne-Marie Slaughter, the first women to head policy planning in the State Department, has set the punditry buzzing with her Atlantic cover story, ” Why Women Still Can’t Have it All,” on the pressures felt by successful professional women.

Women with high-powered careers competing for leadership roles while raising a family face harsh and conflicting pressures, as Slaughter details. But the stark reality is that most working mothers face far more daunting obstacles simply trying to keep their families afloat. And with advertisers geared to young affluents, celebrating a lifestyle that few can afford, the reality of most working mothers is too seldom discussed in the media.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

Follow us on Twitter @StarsHollowGzt

Kristina vanden Heuvel: The Robin Hood Tax: A Powerful Antidote to Austerity

Last week, nurses rallied, bank staff marched, conservatives coalesced and finance professionals petitioned-all in support of a global tax on Wall Street speculation. You wouldn’t know it from the headlines (Financial Times: “Push for EU-wide ‘Robin Hood Tax’ ends”), but by week’s end, that elusive goal was closer than ever.

“We don’t just advocate for people when they’re ill, and we don’t just advocate for them when they’re in the hospital,” says Jean Ross, a registered nurse and co-president of National Nurses United, the country’s largest nursing union. “We have to have a society where they can get well and stay well.”

As I’ve written before, the financial transaction tax (FTT) is a good idea whose time has come. By assessing a modest fee on transactions, we can raise revenue from those who can afford it while discouraging the unproductive speculation that puts our economy at risk. And frankly, Wall Street owes us. The tax offers an antidote to austerity and a rallying cry that hard-core occupiers, Democratic senators, and reality-based conservatives can all get behind.

Wenonah Hauter: Secrecy + Haste = Farm Bill Status Quo

Late last week, the Senate passed its version of the Farm Bill – the sprawling legislation that dictates what and how we eat. From the perspective of consumer protection and leveling the playing field for small and midsized family farmers, the Senate bill does little to address the problems of consolidation and anti-competitive business practices that plague our food system.

Although the Senate bill made changes to commodity policy that will be touted as reform, the bill reinforced prior farm policies that favor large industrial-scale agriculture and overproduction of commodity crops like corn and soybeans. Only a few companies sell what farmers need (like seeds, fertilizer and tractors) and only a few firms buy what farmers raise, which means they pay more for supplies and get less for their crops and livestock. The four largest companies in each industry slaughter nearly all the beef, process two-thirds of the pork, sell half the groceries and process about half the milk in the United States.

“Irrational exuberance”, “unrealistic expectations” accurately describe some of the reports about the alleged rebound in the housing market, such as this report on the increase in housing prices:

Home prices rose in nearly all major U.S. cities in April from March, further evidence that the housing market is slowly improving even while the job market slumps.

The Standard & Poor’s/Case-Shiller home price index shows increases in 19 of the 20 cities tracked. That’s the second straight month that prices have risen in a majority of U.S. cities.

And a measure of national prices rose 1.3 per cent in April from March, the first increase in seven months.

San Francisco, Washington and Phoenix posted the biggest increases. Prices fell 3.6 per cent in Detroit, the only city to record a drop.

The month-to-month prices aren’t adjusted for seasonal factors. Still, prices in half of the cities are up over the past 12 months.

Then there was this news in Bloomberg about the increase in demand for new homes:

Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool.

Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month, the Commerce Department reported today in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low.

The problem with this rise in housing prices and an increase in new home sales is that its a poor indicator of the real “health” of the housing market. Even Yale Prof. Robert Shiller, co-creator of the quoted Case-Shiller house price index, takes a cautious view of these optimistic predictions of a housing recovery:

MUCH hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy. But will the recovery be sustained? [..]

The most obvious reason for hope is that, unlike stock prices, home prices tend to show a great deal of momentum. Correcting for seasonal effects, home prices as measured by the S.&P./Case-Shiller 10-City Home Price Index increased each month from June 1995 to April 2006, then decreased almost every month to May 2009. Since then, they have risen through January, the latest month for which data is available.

So, because home prices have been climbing of late, isn’t it plausible that they’ll keep doing so?

If only it were that simple.

Home price booms and busts do end, sometimes quite suddenly, as was the case for the boom of 1995 to 2006 and the bust of 2006 to 2009. Today, we need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market.

Michael Olenick explains at naked capitalism:

Yale Prof. Robert Shiller, co-creator of the well-known Case-Shiller house price index, takes a more sober approach. Shiller argues in the New York Times until meaningful principal reductions are put in place that house prices are hosed. Pricing may bump up on artificial scarcity caused by the relatively low number of foreclosures after the robo-signing scandal, but in the long run underwater borrowers are likely to drown. Further, because of sky-high loss severities in foreclosures – my own data shows it is not at all uncommon for investors to lose the entire face value of a mortgage in a foreclosure – principal reductions make good business sense.

Shiller embraces an idea being floated about lately; having municipalities use eminent domain to “take” mortgages at fair market value. Databases like the one I’ve been compiling clearly show the loss severity of similar mortgages in similar ZIP codes, allowing municipalities to ascertain fair market value of the mortgages, as opposed to the houses. In bubble-states, where negative equity issues are most pronounced, fair market value of most mortgage would be no more than 20-percent of the face value of the first mortgages – and oftentimes far less; no more than a few cents on the dollar – while second liens would be worthless.

Assuming this approach is only used with the consent of the homeowner, I’d suspect that one last call the servicer before implementation would magically result in an almost immediate modification: no lost paperwork, no transfers to the offshore call center, no capitalized interest.

That’s too rational for anyone to heed.

In his dissenting opinion on the Arizona v. United States, Supreme Court Justice Antonin Scalia went on a politically motivated rant that was directed at President Obama’s directive that would allow 800,000 undocumented immigrants who are under 30 came here as children to legally remain in the US. Not only was Scalia’s partisan political rant an embarrassment for the Court, it was factually wrong and racist.

First the facts that Scalia misrepresented and skewed. The Justice made this statement (pdf):

After this case was argued and while it was under consideration, the Secretary of Homeland Security announced a program exempting from immigration enforcement some 1.4 million illegal immigrants under the age of 30. If an individual unlawfully present in the United States

   “• came to the United States under the age of sixteen;

   “• has continuously resided in the United States for at least five years . . . ,

   “• is currently in school, has graduated from high school, has obtained a general education develop­ment certificate, or is an honorably discharged veteran . . . ,

   “• has not been convicted of a [serious crime]; and

   “• is not above the age of thirty,” . . . .

   The husbanding of scarce enforcement resources can hardly be the justification for this, since the considerable administrative cost of conduct­ing as many as 1.4 million background checks, and ruling on the biennial requests for dispensation that the nonen­forcement program envisions, will necessarily be deducted from immigration enforcement.

Part of the President’s reasoning for this order is the fact that congress has failed to provide the the $285 billion cost of deporting every illegal immigrant currently in the US and decided to use the limited resources available by focusing on undocumented immigrants who commit serious offenses and shifting resources away from college students and veterans. Scalia’s math is a bit off by some 600,000 more immigrants than is estimated to be affected by the President’s new policy.

Now to the really egregious racist spew that relied on racist Post Civil War laws that prohibited freed slaves from moving into Southern States:

Notwithstanding “[t]he myth of an era of unrestricted immigration” in the first 100 years of the Republic, the States enacted numerous laws restricting the immigration of certain classes of aliens, including convicted crimi­nals, indigents, persons with contagious diseases, and (in Southern States) freed blacks. State laws not only provided for the removal of unwanted immigrants but also imposed penalties on unlawfully present aliens and those who aided their immigration

This is comes on the heels of Scalia’s defense of tortute, his dismissal of the execution of innocent people at the hands of the states and his homophobia and his inability to distinguish legal arguments from political talking points

Scalia doesn’t seem to care that in his dotage he is sounding increasingly unhinged and more and more like a right wing talk radio host. Even Chief Justice Roberts should be embarrassed by this racist bile. If Scalia can’t control himself, he should be removed from the Court, if he doesn’t have the good sense to remove himself into retirement.