Last Call For Village Idiocy 101

You guys, Red State Dems are really concerned that Hillary is running as a Democrat and not a Republican, and that's making a lot of people very, very nervous.

Hillary Rodham Clinton appears to be dispensing with the nationwide electoral strategy that won her husband two terms in the White House and brought white working-class voters and great stretches of what is now red-state America back to Democrats.

Instead, she is poised to retrace Barack Obama’s far narrower path to the presidency: a campaign focused more on mobilizing supporters in the Great Lakes states and in parts of the West and South than on persuading undecided voters.

Mrs. Clinton’s aides say it is the only way to win in an era of heightened polarization, when a declining pool of voters is truly up for grabs. Her liberal policy positions, they say, will fire up Democrats, a less difficult task than trying to win over independents in more hostile territory — even though a broader strategy could help lift the party with her.

OK, right off the bat, Bubba won 20 years ago through triangulation because the electorate was different.  His reward was impeachment by "moderate" Republicans  Two, describing Obama's path to victory as "narrow" is also stupid as both times he won by huge electoral vote margins, 192 in 2008 and 126 in 2012.

And as usual, Hillary's biggest detractors are Red State Dems who want her to be the moderate Republican in the race.

So to Democrats in states where Mrs. Clinton is unlikely to compete, her relying on Mr. Obama’s map would be worrisome. It would not only further diminish beleaguered state parties, but also leave Mrs. Clinton with a narrower margin for error.

“Go ask Al Gore,” Senator Joe Manchin III, Democrat of West Virginia, said about the risk of writing off states such as his, where Democratic presidential candidates prospered until 2000. “He’d be president with five electoral votes from West Virginia. So it is big, and it can make a difference.”

Centrist Democrats also worry that focusing on liberal voters could lead to a continuation of the problems Mr. Obama has faced with a Congress elected by a vastly different subset of the nation.

“That’s not good for the country,” Mr. Manchin said, adding that he hoped Mrs. Clinton would “come to the middle” if she became president.

Of her campaign, he said, “If they get her too far over, it’s going to be more difficult to govern, it truly is.”

Other rural-state Democrats are sending not-so-subtle messages.

“I think that we always appreciate when people want to kind of talk to the whole country and listen to concerns, and I think farm country is critically important,” said Senator Heidi Heitkamp, Democrat of North Dakota.

Joe Manchin and Heidi Heitkamp are worried that Hillary's not conservative enough.  That right there should tell you she's doing the right thing.

A Student Of The Debtor Economy

Over the last several years I've detailed the fight with America's mortgage giants and how they wrecked America, and one of the big issues they hit us all with was "robosigning", the practice of using MERS, the federal bank mortgage record system, as a dumping ground for broken securities and mortgages so tied up in lost records and smoke and mirrors that nobody knows who really owns the mortgage on millions of homes. 

It's still a major issue, and now we're finding out that this practice -- securitizing loans and then chopping up the debt for sale as the Next Great Investment Vehicle -- is rampant in the student loan industry as well.

Student loans have eclipsed credit cards to become the second-largest source of outstanding debt in the U.S., after mortgages. Since 2007 the federal student loan balance has more than doubled, to almost $1.2 trillion from $516 billion. The Consumer Financial Protection Bureau estimates that students, former students, and their parents owe an additional $150 billion in loans from banks and other private lenders.

With defaults climbing, lenders have turned to the courts to collect. Many of their suits are marred by missing documents and procedural errors, say consumer advocates and lawyers defending debtors. “Our office is seeing an uptick in abusive loan debt-collection tactics that leave no room for relief,” wrote Massachusetts Attorney General Maura Healey in an e-mail.

The paperwork problems echo the “robosigning” scandals that followed the housing bust. Like mortgages, student loans were bundled into packages and sold to investors. “This is robosigning 2.0 with student loans,” says Robyn Smith, a lawyer with the National Consumer Law Center, a nonprofit advocacy group. “You have securitized loans in these large pools; you have the sloppy record keeping,” as in the mortgage crisis.

The banks learned nothing.  Well, I take that back: they learned they can get away with this because Congress won't punish them.  And just like in 2008-2011, collections agencies are relying on shock and awe tactics to scare people in paying up more than they owe. And when they can't prove they own the mortgage to collect on, judges are siding with the American people.

The National Collegiate Student Loan Trusts are investment vehicles created by a Boston company called First Marblehead that concentrates on education lending. From 1996 through 2007, First Marblehead bought student loans from lenders including Bank of America, JPMorgan, and a bank now owned by Citizens Bank. It transferred batches of loans to trusts it created—more than two dozen in all. The trusts sold bonds backed by the loans. The trusts are responsible for collecting loan payments from borrowers and paying out interest to bondholders. In 2013 bond rater Moody’s Investors Service said it expected losses to reach as high as 50 percent in 15 National Collegiate trusts it examined.

National Collegiate trusts have been among the most active in suing borrowers, consumer advocates say. Since 2011, National Collegiate has filed more than 1,900 civil cases in Missouri, or an average of more than one lawsuit a day. The company has filed a total of more than 2,100 suits in Connecticut, Indiana, Arizona, and Oklahoma, according to state legal databases. Representatives for National Collegiate didn’t respond to repeated requests for comment. “We don’t comment on the trusts,” First Marblehead Chief Financial Officer Alan Breitman says.

Student debtors are challenging National Collegiate in court, and judges in Ohio, Florida, and Kentucky have found that the trusts haven’t proved they own the debt. In California, 13 people are seeking class-action status for a suit against National Collegiate for suing them to collect on student loans without identifying the original lender—which violates California debt-collection law. National Collegiate has denied the allegations in court filings.

This is the next big crisis in the economy, and it's going to be a brutal mess to work through.  Don't expect the economy to get too much better than it is now until this problem goes away.

Sunday Long Read: A New Ferguson Moment

This week's Sunday Long Read is from the relatively new Seattle Met site, covering SeaTac and Washington State, and the story reminds us that it's not always black men and women who are being killed by police, but Hispanic people as well.  One such moment happened February in Pasco, Washington, where Antonio Zambrano-Montes, a Mexican field worker, was gunned down by police.

WHEN THE RUNNING MAN suddenly disappeared from her view, Modesta Carillo’s brain offered a quick explanation: He had simply stepped from the sidewalk into Vinny’s Cafe and Bakery, a panadería where you can buy roasted pork sandwiches and sugar cookies with jelly smiles.

It wasn’t altogether a rational thought. She’d heard the gunshots, she had seen the three police officers chase him across the intersection of 10th and Lewis with their guns drawn, had seen him put his hands up. This wasn’t an errand like the one she was on, buying groceries for the week at Fiesta Foods, one of Pasco’s two large Mexican markets. But everything happened so quickly, and it was too improbable, at first, to think that she’d just watched a man die—here, at a crowded intersection during rush hour on a Tuesday, her hands on a cart in a supermarket parking lot.

The truth lay before her. The running man did not go into the bakery. He crumpled on the sidewalk in front of it, hit, according to an ongoing investigation, by five to seven of the 17 bullets that three officers fired.

In the silence after the shots, a man in a fluorescent work shirt walked into the street in front of the bakery, threading his way around the cars that had stopped for the red light. “Oye,” he said to the police, in Spanish. “He only had a rock!” Another man called out, in heavily accented English, “This is wrong.” He repeated himself, as if processing the realization: “This is wrong.” The running man was still now, a lone dark shape on the sidewalk, and the police huddled in conversation before finally walking over to him, checking his pulse, and then handcuffing him. More people filtered uncertainly into the street, speaking to each other in Spanish about what they’d just seen. A man interrupted himself—“It was just a rock, he didn’t have a gun, hijo de la chingada”—to say, unbelieving, “and now they’re going to cuff him?” In English, another yelled to the police: “He is already dead!”

A crowd streamed into the parking lot, catty-corner across the intersection from the bakery. At first, many who hadn’t seen what happened thought that perhaps there’d been a gang shooting, and they milled about, watching, talking, wondering. But within minutes, a video—recorded by a young auto parts store employee behind the wheel of a car at the stoplight—began to spread across their Facebook feeds, and people crowded around phones to watch it.

They saw a blurry figure throw something at a parked patrol car, then run to the crosswalk, out of the frame. They saw two police officers raise their guns toward the intersection, heard six shots sound. They watched three officers chase the man across the street, to the sidewalk in front of Vinny’s, and watched the man turn toward them, his hands up in front of him. They heard another spurt of gunfire and watched the man fall to the ground and lie still. The video was short and baffling, so they watched it again and again. Many of them came to the same angry conclusion: They didn’t need to shoot him.

In the days and weeks that followed, the cell phone video would be watched over two million times. The running man would be identified as Antonio Zambrano-Montes, an unemployed, unarmed, 35-year-old orchard worker from Michoacán, Mexico, who had lived in the area for 10 years, and Pasco residents trying to make sense of his life and his death would accuse each other of unfairly casting him as either a saint or a villain.

Hundreds of people—many of whom either also worked in “el field,” like Zambrano-Montes, or whose family members had once crossed the border to work there—would fill the streets of Pasco, the seat of Franklin County, which is a magnet for seasonal farmworkers, especially from Mexico, and which in 2006 became the first county in the Northwest to become more than half Latino: a “minority majority,” as people here often say.

The shooting would draw international media coverage, the condemnation of Mexico’s president, and the involvement of a federal mediator from the Department of Justice. Zambrano-Montes’s family would retain the same attorney who represented the families of Michael Brown, Trayvon Martin, and Tamir Rice. The New York Times, pointing out the underrepresentation of Latinos on the city’s police force, school board, and city council, would call what happened a “ ‘Ferguson’ moment for Hispanics.” In Pasco and the surrounding region, people would heatedly debate what they might have in common with a Missouri town they’d never been to and what the shooting and its victim revealed—if anything—about their own city.

But on that night, February, 10, 2015, in the parking lot, Modesta Carillo found she could only think about the running man’s mother, wherever she was, about what it would be like for her when she found out. She stayed where she was, trembling, as the streets filled with flashing lights and crowds of people. She listened to the people around her talking and yelling, but couldn’t think of anything to say. Still, it felt wrong to go home. “You stay,” she explained later, in Spanish, “because you don’t know what to do.”

I admit I hadn't heard of the shooting in Pasco, or of Antonio Zambrano-Montes, but the more I look into this story, the sadder it gets. As always, do read the whole thing.