Foreclosures in Massachusetts skyrocket

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Tuesday, February 27, 2007
Mass. foreclosure filings smash record
January had the highest number of monthly Massachusetts foreclosure filings in at least two decades as local consumers struggled to hang onto their homes, according to a new report.

Last month, 2,207 foreclosure filings - or 110 every business day - were submitted in Massachusetts, more than double the number of a year ago; filings in January 2007 were up 105 percent from 1,076 filings in January 2006, according to ForeclosuresMass.com, a Framingham firm that provides online Massachusetts foreclosure data to investors, real estate agents, and lenders.

"The flood of foreclosures in Massachusetts is not only continuing; it has reached a new high," company president Jeremy Shapiro said in a statement. "The fact we are starting the year with the highest number of foreclosures we've ever recorded for a single month is more than significant - it's ominous."

Using both its own sources and court data, ForeclosuresMass.com has detailed information on foreclosure filings going back to 1986, a company spokesman said; no month since 1986 has had more filings than January 2007.

Over the past 12 months, 20,618 foreclosures were initiated, up 77 percent from 11,650, for the comparable 12-month period a year ago, the firm said.

A foreclosure filing doesn't necessarily mean that borrowers lose their homes.

Lenders file a notice of intent to foreclose in Land Court when borrowers are at least 30 days behind on a mortgage payment.

In many cases, borrowers can negotiate with the lender to catch up on payments or sell the house to pay off the loan; generally, two-thirds of consumers who receive notices are never actually foreclosed upon.

Earlier this month, ForeclosuresMass.com released year-end statistics for 2006 that showed that more local homeowners were in danger of losing their homes than at any time since the real estate recession of the 1990s.
(By Chris Reidy, Globe staff)

At last, true growth in America: severe poverty

The American Enterprise Institute, The Heritage Foundation, the Hoover Institution, and John Stossel all notwithstanding, it appears that maybe poverty in America just might be a (severe) problem after all. The McClatchey Newspapers report that:

The percentage of poor Americans who are living in severe poverty has reached a 32-year high, millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen.

A McClatchy Newspapers analysis of 2005 census figures, the latest available, found that nearly 16 million Americans are living in deep or severe poverty. A family of four with two children and an annual income of less than $9,903 - half the federal poverty line - was considered severely poor in 2005. So were individuals who made less than $5,080 a year.

The McClatchy analysis found that the number of severely poor Americans grew by 26 percent from 2000 to 2005. That's 56 percent faster than the overall poverty population grew in the same period. McClatchy's review also found statistically significant increases in the percentage of the population in severe poverty in 65 of 215 large U.S. counties, and similar increases in 28 states. The review also suggested that the rise in severely poor residents isn't confined to large urban counties but extends to suburban and rural areas.

The plight of the severely poor is a distressing sidebar to an unusual economic expansion. Worker productivity has increased dramatically since the brief recession of 2001, but wages and job growth have lagged behind. At the same time, the share of national income going to corporate profits has dwarfed the amount going to wages and salaries. That helps explain why the median household income of working-age families, adjusted for inflation, has fallen for five straight years.

These and other factors have helped push 43 percent of the nation's 37 million poor people into deep poverty - the highest rate since at least 1975.

The share of poor Americans in deep poverty has climbed slowly but steadily over the last three decades. But since 2000, the number of severely poor has grown "more than any other segment of the population," according to a recent study in the American Journal of Preventive Medicine.

Okay, time for the right wing thinkers to spend another $100 million trying to spin this report away. I'm beginning to think that the money spend to distort the state of economic decay in the US may be the last thing keeping the whole damn structure from collapsing.

Ignoring our way into third world status

If you were ever tempted to believe the globalization propagandists that globalization (1) creates more jobs than it takes away from the U.S., and/or (2) doesn't really affect that many jobs, check out this, from PAUL CRAIG ROBERTS:

American employees have been abandoned by American corporations and by their representatives in Congress. America remains a land of opportunity ? but for foreigners ? not for the native born. A country whose work force is concentrated in domestic nontradable services has no need for scientists and engineers and no need for universities. Even the projected jobs in nursing and school teaching can be filled by foreigners on H-1B visas.

...
The myth has been firmly established here that the jobs the U.S. is outsourcing offshore are being replaced with better jobs. There is no sign of these jobs in the payroll jobs data or in the occupational employment statistics. When a country loses entry-level jobs, it has no one to promote to senior level jobs. When manufacturing leaves, so does engineering, design, research and development, and innovation itself.

Matthew J. Slaughter, a Dartmouth economics professor rewarded for his service to offshoring with appointment to President Bush's Council of Economic Advisers, suffered no harm to his reputation when he wrote, "For every one job that U.S. multinationals created abroad in their foreign affiliates, they created nearly two U.S. jobs in their parent operations." In other words, Slaughter claims that offshoring is creating more American jobs than foreign ones.

How did Slaughter arrive at this conclusion? Not by consulting the BLS payroll jobs data or the BLS Occupational Employment Statistics. Instead, Slaughter measured the growth of U.S. multinational employment and failed to take into account the two reasons for the increase in multinational employment: (1) Multinationals acquired many existing smaller firms, thus raising multinational employment but not overall employment, and (2) many U.S. firms established foreign operations for the first time and thereby became multinationals, thus adding their existing employment to Slaughter's number for multinational employment.

ABC News' John Stossel, a libertarian hero, recently made a similar error. In debunking Lou Dobbs' concern with U.S. jobs lost to offshore outsourcing, Stossel invoked the California-based company, Collabnet. He quotes the CEO's claim that outsourcing saves his company money and lets him hire more Americans. Turning to Collabnet's webpage, it is very instructive to see the employment opportunities that the company posts for the United States and for India.

In India, Collabnet has openings (at time of writing) for eight engineers, a sales engineer, a technical writer, and a telemarketing representative. In the U.S. Collabnet has openings for one engineer, a receptionist/office assistant, and positions in marketing, sales, services and operations. Collabnet is a perfect example of what Lou Dobbs and I report: the engineering and design jobs move abroad, and Americans are employed to sell and market the foreign-made products.

Other forms of deception are widely practiced. For example, Matthew Spiegleman, a Conference Board economist, claims that manufacturing jobs are only slightly higher paid than domestic service jobs, so there is no meaningful loss in income to Americans from offshoring. He reaches this conclusion by comparing only hourly pay and leaving out the longer manufacturing workweek and the associated benefits, such as health care and pensions.

Occasionally, however, real information escapes the spin machine. In February 2006 the National Association of Manufacturers, one of offshoring's greatest boosters, released a report, "U.S. Manufacturing Innovation at Risk," by economists Joel Popkin and Kathryn Kobe.16 The economists find that U.S. industry's investment in research and development is not languishing after all. It just appears to be languishing, because it is rapidly being shifted overseas: "Funds provided for foreign-performed R&D have grown by almost 73 per cent between 1999 and 2003, with a 36 per cent increase in the number of firms funding foreign R&D."

U.S. industry is still investing in R&D after all; it is just not hiring Americans to do the research and development. U.S. manufacturers still make things, only less and less in America with American labor. U.S. manufacturers still hire engineers, only they are foreign ones, not American ones.

Danger: Evangelical Economist at Work

You may have noticed that there is a connection between evangelical Christian beliefs and the belief that all people should be left to the mercy of the "market" rather than aided by government intervention. This phenomenon goes back at least to the Congressional debate over whether to enact the Social Security Act, when good, god-fearing men who ran the industries and financial centers of the day sat before Congress and warned in deep, somber voices that the program would destroy the moral fiber of the nation (poverty wouldn't affect morals, mind you, but government efforts to reduce poverty would). British evangelicals played a part in creating the horrible workhouses of 19th century England, and, from what I understand, in preventing the British government from alleviating the consequences of the Irish potato famine.

Now why do you suppose that is?

Before getting into that, here's an example of what I'm talking about. James Sherk is an economist with the Heritage Foundation. James Sherk is also the lead economics editor for a group called evangelsociety.org.

Mr. Sherk writes stuff like this for Heritage:

Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents

Union Members, Not Minimum-Wage Earners, Benefit When the Minimum Wage Rises

As I said, Mr. Sherk is also on board at evangelsociety, which describes itself thus:

Evangel Society Mission Statement

Established 2002

In order to love the Lord our God with all of our minds, The Evangel Society of Thought exists for the purpose of examining the world around us. From the foundation of a Christian worldview and a passion for the Good News, the Evangel, we will explore issues ranging from politics and economics to religion and popular culture.

The Evangel Society believes that

We are able to go up and take the country,
To possess the land from Jordan to the Sea.
'Though the giants may be there, our way to hinder,
Our God has given us the victory.
~ Paraphrase of Numbers 14

We will take every thought captive to Christ. Our vision is that the Lord will use us to equip believers with reasoned analysis of the critical issues of the day. There are "giants in the land," ideas and institutions that stand opposed to the Gospel of Christ, but we are confident that the Bible, as the inspired word of God, shall prevail over all of its challengers. We will contend for its primacy in the arena of ideas.

Now it seemed off to me, when I first thought about it, that people dedicated to a Christian life would also be so dedicated to combating government attempts to alleviate poverty and other human misery. But then, so many people who are passionate about their Christianity, who mold every moment of their lives to that belief, are, well, harsh. Really, really harsh. Unforgiving of what they perceive to be the sins of others.

So here's what I came up with on why evangelical Christians are so often aligned with the conservative business community when it comes to employment, wages, and worker rights:

1. They equate economic success with God's love; hence the poor are viewed as less loved by God than are the rich.

2. Their focus is ultimately on the afterlife, rather than the corporeal life on earth, and have a strong belief that human suffering is part of God's plan to reward the worthy after they are dead.

3. They are indoctrinated with the idea that life is a battle between good and evil, and that sloth and sexual sinning are evil, and see the poor as likely to commit the sins of both sloth and sexuality.

4. They are indoctrinated with the idea that obedience to government is itself a dangerous, perhaps sinful thing in itself, since all obedience should be to God and/or Jesus.

So am I right on this? Who knows. I do know that there have been far too many times that I read some analysis of economic issues that struck me as patently askew, to a degree that makes me suspect deliberate fraud, only to discover that the author is a devout Christian of the evangelical stripe.

What we need is a standard warning for these tracts on the evils of government intervention to protect the people. Maybe a nice bright white sign, with graphics of flames licking at the edges, with the following in large, fancy, gold letters:

Danger: Evangelical Economist at Work

You are what you buy?

Check out this summary of a 1-28-07 World Economic Forum discussion panel titled "Brands: Today's Gods?" (emphasis added).

Reno Sami, Manager, School Uniform Project, Plusminus Basel, Switzerland, observed that consumers often spend too much money on branded goods: according to surveys, he said, "70% of consumers said they would become indebted in order to follow fashion". The big brands, he stated, make false promises and behave irresponsibly.

Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom, disagreed, arguing that the choice of a brand is up to consumers and is an expression not only of what they like, but of who they are. "It isn’t just copying fashion," he said, "it is an emotional experience to choose a brand. I have no problem with that." However, Sorrell agreed that corporations should be careful not to seek to indebt consumers in order to increase sales. "The responsible companies should not do that," he said. "And the trend is for companies to take corporate social responsibility increasingly seriously. You can’t find a CEO today who would say that the environment isn’t his concern or that corruption isn’t important."

On a deeper level, Sorrell commented that with the evolution of information technologies, consumers are enjoying rapidly growing power regarding the choices they make. "There are blogs, citizen newspapers and even homemade films," he explained. "They go over the Internet and consumers react to them – immediately." It would be a great mistake to underestimate the critical intelligence of consumers, he observed. Their choices, based on such information, will vastly enhance the efficiency and the effectiveness of the free market – "one of the most powerful mechanisms created". Corporations, he remarked, are taking notice. "This is a really great thing," he concluded.

Sami argued that consumers need to be educated about their credit habits, which the public sector has rarely proven capable of doing. He said that some regulation might be required to protect certain consumers from false-advertising claims. This is particularly true for children and adolescents, who are less informed and more vulnerable to peer pressure.

Sorrell again disagreed, stating that consumers have to exercise their choice, which is their personal and social responsibility. "It should begin in the home," he said. Kathleen Ix, Student at the International School of Geneva, stated that as a student she does not feel compelled to buy brands. "My parents brought me up to think about how I spend money," she said, "so I am very conscious about what I think is a good purchase." Her experience delighted Sorrell, who said that Ix’s family is a great example of informed consumers exercising their power.

The debate concluded with a description by Sami of the experimental programme he ran to get students to accept school uniforms. The students considered uniforms created by four young designers. Once they picked the prototype, they helped to design the final choice. "For the programme to work," Sami explained, "the students have to engage in a real debate on what a brand is, but also on their identity and what it means to them."

Don't know about you, but I don't give a Reebok's damn about brands. Wouldn't let that affect my personal ego-buying decision for all the MP3s in the universe.

John Kenneth Galbraith knew the truth about conservatives

A quote attributed to John Kenneth Galbraith, who passed away last April, on the motivation of modern conservatives:

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for superior moral justification for selfishness.

Really couldn't be truer. They don't want to do away with taxes on the rich because the rich are greedy; perish the thought! They want to do away with those taxes because in some insane, convoluted manner, doing away with those taxes is necessary to help the poor.

Every time you hear a conservative say something that sounds ridiculous on its face--like "the best way to help the poor is to give more money to the rich"--think about Galbraith and that quote.

Blue Shield of California's unique way of "managing" claims

What's a poor insurance company to do when one of it's policyholders has the audacity to file a claim? Well, they certainly don't want to encourage that kind of behavior, so....

A new lawsuit accuses Blue Shield of California of looking for reasons to cancel the policies of people who file claims:

...the lawsuit, filed on Thursday, is "unusual" because "it seeks to force Blue Shield to stop the practice, rather than demand compensation for a policyholder who lost coverage." The lawsuit might "have a wide effect if it succeeds because Blue Shield alone has acknowledged canceling about 300 policies in the last two years," and the "outcome also could influence other insurers that collectively have revoked thousands of policies in recent years," the [Los Angeles] Times reports.

How do the insurers do it? Simple....if they can find a misstatement, or an omission of fact, anywhere in your application for the policy, they claim the right to rescind the contract for fraud in the inception. Now most people applying for a policy, or anything else that has an application as long as the ones for insurance, involving questions about health and lifestyle going back to your damn birth, are likely to make some mistakes. So the insurers can, in effect, cancel your policy any time they want, at least if the law allows cancellation for all omissions and errors. They can just collect your premiums as long as they find that profitable, then spring the old fraud claim anytime you become unprofitable, undesirable, etc.

So the lawsuit is likely to center on whether the law allows these bastions of free marketeerism to cancel for any mistake or omission, even unintentional ones.

California's insurance Commissioner appears to have taken the side of policyholders on this one. According to one report, state Insurance Commissioner Steve Poizner said:

I am very concerned about the practice of post-claims underwriting...The law does not permit a health insurer to agree to provide coverage and then wait until a claim comes in to decide whether to pay for the medical care a policyholder needs. Specifically, I am concerned about insurers rescinding coverage for small, inadvertent and innocent omissions on applications for coverage.

You and all the rest of us "lucky" enough to be insured, Mr. Poizner.

And yes, I am involved in attempting to get coverage of a medical claim as I write. Or at least to get a comprehensible explanation of what the coverage is, or why there is none. The last time I went through this, I spent about 8 hours dealing with Blue Cross (God knows how long Blue Cross spent) getting a $28 reimbursement for two trusses while I waited for hernia surgery.

And just think, this is the kind of "free market solution" the Republicans keep pushing for the health care crisis in America.