CREW releases Congressional “dirty 96” list — including Ron Paul

These are the Members of Congress who keep family members on some sort of dole, whether a friendly PAC or something else.

Citizens for Responsibility and Ethics in Washington earlier this week released an analysis of the misuse of power by the chairmen and ranking members of all House of Representative committees and subcommittees, as well as top leadership positions, to financially benefit their family members. The new report, Family Affair, names 96 members from 33 states: 41 Democrats and 55 Republicans.

Highlights of the report include:

* 64 paid family members through their campaign committees or PACs (26 Democrats and 38 Republicans);
* 24 have relatives who lobby Congress (10 Democrats and 14 Republicans);
* 19 used their campaign committees or PACs to pay a family business or a business that employs a family member (9 Democrats and 10 Republicans);
* 17 used their campaign funds to make campaign contributions to relatives (11 Democrats and 6 Republicans);
* 15 used their positions to benefit a family member or a family member's client (3 Democrats and 12 Republicans);
* At least 7 paid offspring who ranged from school-age to college-age (all Republicans)

Among the more laughable on the list? “Libertarian” patron saint of limited government Ron Paul; I guess it just shows that past or present third-party officials aren't immune from hypocrisy, either.

None of his relatives worked for the government, 'tis true; just for his campaign committee. It's still a form of benefiting your own family through running for office.

Paul has his daughter on his campaign committee, to the tune of about $49,000 in the 2002 election cycle, and $56,000 in both 2004 and 2006 cycles. A second daughter, and her mother-in-law and father-in-law, got smaller payouts.

The CREW page about the story, including a state-by-state look-up of the “dirty 96,” is here. (PDFs of info on each of the violators.)

Michael Bloomberg update — good news or bad for Democrats?

Via Talking Points Memo, I see that he has left the GOP. Here’s his statement guts:

”As a political independent, I will continue to work with those in all political parties to find common ground, to put partisanship aside and to achieve real solutions to the challenges we face. Any successful elected executive knows that real results are more important than partisan battles and that good ideas should take precedence over rigid adherence to any particular political ideology.”

Well, doesn’t THIS stir up the pot? His claim he’s doing this to be a better mayor for NYC is of course spin and nothing more.

Let’s look ahead to 2008. If he does run, this likely knocks New York State out of any Democratic win column. Probably Connecticut, too. Could even have consequences in The Golden State if Dems have a weak presidential candidate. Bloomberg could run well in Florida, too, I’ll bet.

So, contrary to 1992, I do NOT think this is generally good news for a Democratic presidential candidate. It may not be bad news; it may be a wash. But, I do not think it is good news.

Big Three Democratic candidates all OK with partial pullout from Iraq

Speaking to AFSCME, Clinton, Edwards and Obama all, in various ways, talked about a partial pullout from Iraq, not a complete one.

Hmm, what’s going to happen when a new “timelines” bill comes up in the Senate, for Obama and Clinton? And, how will Edwards challenge them to vote without getting his own stance challenged?

Subprime crisis a reflection of larger debt-investment problems; possibly comparable to Enron derivatives

Jim Jubak explains the incestuous relationship between credit-rating agencies and banks, and how the subprime crisis has left a lot of emperors’ new clothes exposed:

It's important to understand that bond professionals don't want to think badly of the job done by the credit-rating agencies. The bankers pay the rating agencies' fees. (Bet you didn't know that. Yep, the issuers of debt are the ones who pay the bills.) The bankers literally sit across the table from the rating agencies. The banks poach anybody on the other side of the table that they think has the talent to work for them. And the banks rely on the credibility of the rating agencies to sell their debt offerings. It's a pretty cozy club.

But the subprime debacle has been big enough to disrupt the club. Buyers of packages of subprime mortgages and derivatives based on these packages that have been burnt by rising defaults on these mortgages and falling prices for the debt they hold have angrily wondered if banks issuing the debt disclosed all the risk. And the banks have passed the buck, saying, that they relied on the ratings from the three agencies.

As a result, Jubak said, this is part of why not just the ratings agencies in particular, but Wall Street in general, hasn’t reacted faster to the subprime crisis and its possible larger economic effects, specifically the problems with mortgage-based securities.

Several issues here.

First, where is a Democratic Congress, in failing to push for new regs out of either the SEC or FDIC to eliminate this incestuousness?

Probably waiting for “new Democrat” financial donors, which it has often been since the Clinton days.

This would be like Ford or GM paying Consumer Reports for their car ratings. It’s ridiculous.

It’s ridiculous it took the subprime crisis to expose this, if “expose” is the right word for something still generally flying well beneath the Big Media radar.

Beyond that, there’s the fact that these particular securities, known as collateralized debt obligations, are big turkeys in their financial performance. And, to the degree small investors have gotten talked into them, they could take a bit of a bath.

And, these are very complex debt-based securities. Jubak says many people, not small-time buyers, but even bigger pros, can’t analyze them well. He even draws Enron-type comparisons.

It’s ridiculous nothing has yet been done.

Housing market slips again; slowdown should continue

It may not be hurricane-strength, but a perfect storm of some strength continues to brew in the housing market.

• Potential buyers face a new hurdle with the cost of borrowing up sharply in recent weeks. The average interest rate on a 30-year fixed loan hit 6.74 percent last week, up from 6.21 percent a month earlier.

• Although the real-estate market has cooled considerably from the peak sales year of 2005, inventories suggest that supply and demand haven't yet come into balance. In April, the number of homes on the market was 23 percent higher than the previous April.

• The run-up in home prices was built partly on an unprecedented surge in risky lending to borrowers with poor credit histories or no down payments. Those excesses take time to work off. Foreclosure rates have recently reached record levels and may continue to rise over the next year as adjustable-rate mortgages reset for more borrowers.

Add in that the Fed has pretty well indicated interest rates will not be lowered in the foreseeable, and ARMs will certainly reset for more and more borrowers, a fair penny higher, and I’ll give you 50-50 odds the foreclosure rate rises at least 20 percent before leveling off.

Stir into the mix the fact new-housing starts slipped again a bit in May, and high gas prices, combined with higher interest rates and still-slipping prices may have would-be home buyers sitting on the sidelines, and you can see why the slump in the housing market will continue.

Between the housing slump possibly having wider economic effects, and foreclosures almost certain to continue rising, this is indeed a domestic policy issue that bears more watching than it’s getting right now.

Mortgage rates surging upward

As the subprime collapse and other factors weigh in, mortgages are surging:

The average rate on a 30-year, fixed-rate mortgage rose to 6.74 percent last week, up more than half a percentage point in four weeks, from 6.21 percent, according to mortgage financier Freddie Mac. That would boost the monthly payment on a $400,000 mortgage by $139.

Will they reach an equilibrium soon? How much fallout will this have? The Fed is clear that it won’t cut interest rates anytime soon; could they go up a quarter-point?