Jobless: 10 percent is tougher than it used to be

This is not our grandfather's depression ...

AP - It hurts more to be unemployed now than the last time the jobless rate hit 10 percent.

(link) [Yahoo! News]

20:36 /Politics | 0 comments | permanent link

Fear, shame keep homeowners from defaulting

How much blather have we heard recently about "moral hazard" and the sanctity of contracts? I guess this rhetoric is meant to help reinforce consumer's holding on to their debt, as the good professor points out. It only applies to companies like AiG and others when it benefits them - but consumers and homeowners are out in the cold.

A bankruptcy court can modify any contract other than a home mortgage - why is that? When a business goes into bankruptcy it can shed (or should I say "shred") all of it's labor and supplier agreements, or the judge can simply modify them so the business can "reorganize". This is not the case with a home mortgage in consumer bankruptcy law - why the difference?

It's because we have the best Congress money can buy, and it has.

University of Arizona law professor Brent White has just published a working paper making the case that homeowners who are underwater in their mortgage should just walk away from their homes. He says shame and guilt are keeping more homeowners from walking away from their mortgages, even if it might be a smart decision.

(link) [EurekAlert!]

14:10 /Politics | 0 comments | permanent link