Friday, October 3, 2008

Bankruptcy - Lose your primary home, keep your other homes

3 minutes

As anyone who has followed the foreclosure crisis closely knows, there is currently a loophole in federal bankruptcy law that allows John McCain to protect his second through seventh homes and yachts and planes if he were to declare bankruptcy, but doesn't allow you and me to save our primary residence that we live in. Barack Obama has called for closing this loophole, Joe Biden has called for closing this loophole, and John McCain has defended it to benefit his banker buddies.

So, of course, I was thrilled last night (VP DEBATE) to see Joe Biden press the McPalin ticket on this really important policy distinction, when he suggested that the GOP ticket opposed this important protection for homeowners. When Gwen Ifill pressed Palin on this point of whether she was opposed, she denied it, saying, "No, that is not so."

ABC News has this story this bombshell story up on their Political Radar blog, and the McCain campaign is already backtracking and trying to spin away Palin's answer, but it's revealing a deeper truth.

In reality, Palin didn't know what she was talking about and immediately pivoted to energy, even though she was asked about bankruptcy, just like she did all night. I am glad to see that progressive organizations are in rapid response mode and not going to let them get away with it. ACORN, one of the leading organizations fighting against foreclosure, put out this statement last night, perhaps tongue-in-cheek welcoming her endorsement of their prize bill:

"About 20 minutes into tonight's debate, Governor Sarah Palin demonstrated bipartisan appeal in endorsing Senator Biden's call for bankruptcy protections for primary residences. When Senator Biden called for bankruptcy shelter and suggested that Governor Palin likely opposed those protections, Gwen Ifill asked, "Governor Palin, is that so?" The Governor responded, "That is not so."

Both Senators Biden and Obama have supported the "Helping Families Save Their Homes in Bankruptcy Act", which would close the loophole in current federal bankruptcy law that prevents primary residences from have their mortgages restructured by federal bankruptcy judges. Currently, second homes, seventh homes, and yachts are eligible for such restructuring, but not primary residences that are being lost at a record pace in the current foreclosure crisis.

ACORN welcomes Governor Palin's endorsement of this important provision, and hopes that this high-profile endorsement will encourage Senator McCain to change his mind and support this necessary change to assist America's struggling homeowners.

Delicious. The ABC story includes the always-enjoyable line, "The McCain campaign confirms to ABC News that Palin misstated McCain's position."

This set up the real punchline in this story, which perfectly encapsulates not only how ignorant, but how tightly controlled by McCain operatives Palin is and will be as Vice President:

"Sarah was just being Sarah," ACORN's Charles Jackson told ABC News. "It's clear from the transcript that she supported the provision that Senator Biden brought up. We'll see if McCain's handlers will allow her to continue to hold that position tomorrow."

ZING! We have a winner. I hope Obama surrogates will push this message and further drive this wedge between Palin and McCain, as it represents so well the reality of her middling performance last night and her middling intellect.

UPDATE: Happily, more media are picking up on parts of this story.

From the Kansas City Star:

Palin, given a chance to respond to Biden's comments, again skirted the question. She came back to talking about America becoming "energy independent," which had absolutely nothing to do with the original question on bankruptcy laws.

From the Detroit Free Press:

And at another point when the discussion turned to bankruptcy rules and how they might change to help keep homeowners from losing their homes, Palin started discussing her record on energy as Alaska’s governor.

And a new update from ABC News, in which they "fact-check" Palin:

FACT: The Senate has voted only once this year on legislation that would change bankruptcy laws to help distressed homeowners. John McCain was absent for that vote. Contrary to what Palin says, the McCain campaign acknowledges that he does not support those changes to bankruptcy laws.

This story can have legs because it hits on so many levels - John McCain is out of touch with struggling homeowners, Sarah Palin doesn't understand bankruptcy laws, and it reinforces her debating "style" of electing not to answer the questions!


She didn't explain how she did all this magical tax cutting, either. And that would have been fun, because I'm sure the answer is that Alaska's oil revenues are what keep the state from needing a state income tax, or a sales tax, or a gas tax, etc. etc. I'd have loved to hear her step into that territory.

Because, if this had been an interview, the interviewer could then pivot into how the oil industry in Alaska is basically socialized (but not of her doing) -- each resident is given a check from oil revenues, for no reason whatsoever other than being a resident. (Can you say "entitlement?") Now, what if the state (had taken) that money and improved roads, schools, health care, etc.? Investing back into the state. Instead, they give everyone a free check and wonder why the schools decline, the infrastructure and health care decline, etc. Coulda been fun.

"All across America there are quiet storms taking place." -- Barack Obama

VP DEBATE Last Night

She had a chance to talk about the specific hardships of those impacted by bankruptcy laws and the sub-prime crisis. Instead, she talked about energy independence. She reiterated the same points on the following question about climate change. The sequence was so shockingly vapid, I just had to transcribe it.

IFILL: Next question, Governor Palin, still on the economy. Last year, Congress passed a bill that would make it more difficult for debt-strapped mortgage holders to declare bankruptcy, to get out from under that debt. This is something that John McCain supported. Would you have?

PALIN: Yes I would've, but here again, there have, there have been so many changes in the conditions of our economy in just even these past weeks as there has been more and more revelation made aware now to Americans about the corruption and the greed on Wall St.. We need to look back, even two years ago, and we need to be appreciative of John McCain's call for reform with Fannie Mae, with Freddie Mac, with the mortgage lenders too, who were starting to really kinda rear that head of abuse and the colleagues in the Senate weren't going to go there with him, so we have John McCain to thank for at least warning people and we also have John McCain to thank for bringing, in a bipartisan effort, people to the table, so that we can start putting politics aside, even putting the campaign aside, and just to do what's right to fix this economic problem that we're in. It is a crisis. It's a toxic mess, really, on Main St. that's effecting Wall St., and now we have to be ever vigilant also, that credit markets don't seize up. That's where the Main Streeters like me, that's where we would really feel the effects.

IFILL: Senator Biden, you voted for this bankruptcy bill, Senator Obama voted against it. Some people have said that mortgage holders really paid the price.

BIDEN: Well, mortgage holders didn't pay the price. Only 10% of the people who are, have been effected by this whole switch from Chapter 7 to Chapter 13 - It gets complicated - but the point of this, Barack Obama saw the glass as half empty, I saw it as half full. We disagreed on that and 85 Senators voted one way and 15 voted the other way. But here's the deal. Barack Obama pointed out, two years ago, that there is a sub-prime mortgage crisis and wrote to the Secretary Treasury and he said you better get on the stick here. You better look at it. John McCain said as early as last December, quote, I'm paraphrasing, 'I'm surprised about this sub-prime mortgage crisis,' number one. Number two, with regard to bankruptcy now, Gwen, What we should be doing now, Biden: and Barack and I support it, we should be allowing bankruptcy courts to be able to readjust not just the interest rate you're paying on your mortgage to be able to stay in your home, but to be able to adjust the principal that you owe. The principal that you owe. That would keep people in their homes, and actually help banks by keeping them from going under, but I - John McCain, as I understand it, I'm not sure of this, but I believe John McCain and the Governor don't support that. There are ways to help people now, and the ways that we're offering are not being supported by, uh, by the Bush administration, nor, do I believe, by John McCain or Governor Palin.

IFILL: Governor Palin, is that so?

PALIN: Uh, that is not so, but because that's just a quick answer, I want to talk about, again, my record on energy versus your ticket's energy, uh, ticket also. I think that this is important to come back to, with that energy policy plan that was voted for in '05. When we talk about energy, we have to consider the need to do all that we can to allow this nation to become energy independent. It's a nonsensical position that we are in when we have domestic supplies of energy all over this great land and East Coast politicians that don't allow energy poducing states like Alaska to produce these, to tap into em, and instead we're relying on foreign countries to produce for us. We're circulating about 700 billion dollars a year into foreign countries, some who do not like America - They certainly don't have are best interest at heart - instead of those dollars circulating here, creating tens of thousands of jobs, and allowing domestic supplies of energy to be tapped into, and so start flowing into these very hungry markets. Energy Independence is the key to this nation's future, to our economic future and to our national security. So when we talk about energy plans, it's not just about who got a tax break and who didn't and we're not giving oil companies tax breaks. But it's about a heckuva lot more than that. Energy independence is the key to America's future.

I'm still steaming about Palin using the debate to "speak to the American people." She refuses to come out of hiding for over a month except for a few instances, and then turns the debate into a campaign event.

No, Sarah, if you want to give interviews and campaign, then do it. A debate is the time to answer the same questions and speak to the same issues as your opponent. What a weasel.

Palin: Oil drilling is related to everything. Nothing is more important than pumping up Alaskan oil profits. It's about the healthcare that we, we do desperately need to...and it's got to be all about job creation. We can't raise the white flag of surrender to alternative energy proponents. We're a breath of fresh oil.

I'm really not convinced that Palin knows what she really thinks. She proved to the public during her bid for Governor that she could memorize a script and stick to talking points. Now, as she is forced to participate in deeper discussion she can't keep ANYTHING straight. She can't remember what McCain's stance might be, how he has voted, or how she is "supposed" to support the ticket. Then, she repeatedly conflicts in interviews (and now the debate) and has to back-peddle or let the McCain campaign explain it away. She has no moral compass--no views of her own (as her views don't resonate with the general public OR overall GOP platform), and it is clear that she is nothing but a pretty puppet with a really bad memory. I really hope America sees her for what she and her running mate are

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