So sockpuppet-master Glenn Greenwald (that never gets tiresome, does it?) rips into Larry O’Donnell for not being progressive enough – really!!

The core of Greenwald’s electoral argument, though, is one that needs to be examined. He says that:

As for the substance of our discussion, O’Donnell — in standard cable TV form — basically had one simplistic point he repeated over and over: exit polls show that only a small minority of voters (a) self-identify as “liberal” and (b) agree that government should do more. There are so many obvious flaws in that “analysis.” To begin with, exit polls survey only those who vote; it excludes those who chose not to vote, including the massive number of Democrats and liberals who voted in 2006 and 2008 but stayed at home this time. The failure to inspire those citizens to vote is, beyond doubt, a major cause of the Democrats’ loss…

This is the Left’s version of a tune the Right often plays as well…”if only we had candidates as pure as our electorate.”

In which they imagine the hidden voters springing forth, bosoms heaving, in response to the Man On The White Horse (or with the correct ideological spin). My reaction is “whatever”. But it’s a real question.

Lots and lots of people don’t vote. Would they be inspired by a True Believer on either side – and more to the point, since I care about the future of the Democratic Party – if there were a goodlooking, articulate Dennis Kucinich, would these hidden voters return like the Hidden Imam?

I’m dubious, and have been dubious for a while. The candidates who tend to pull new voters in tend to be charismatic populists with huge name recognition like Jesse Ventura and Arnold Schwartzenegger. You know, celebrities.

Then, something interesting pops up on Memeorandum.

According to months of data from leading media-research company Experian Simmons, viewers who vote Republican and identify themselves as conservative are more likely than Democrats to love the biggest hits on TV. Of the top 10 broadcast shows on TV in the spring, nine were ranked more favorably by viewers who identify themselves as Republican.

Liberals appreciate many of the same shows, mind you. But their devotion typically is not quite as strong as right-wingers, and Dems are more likely to prefer modestly rated titles.

Basically, political preference is highly correlated with program choice, according to Experian Simmons.

And the shows that conservatives like are significantly more popular than the shows liberals like.

I’m not going to claim that this is deeply dispositive; it’s suggestive.

But it suggests a country where a lot more missing voters would vote for a Jesse Ventura than for a Dennis Kucinich.

I kind of hope that the Democratic strategists are thinking about that…
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It’s Veteran’s Day again, and it’s harder for me to write this year because for the first time, it’s not an abstract concept to me.

I’ve written over (2003) – and over (2004) and over (2005) and over (2006, 2007, 2008, 2009) again about taking this day to reflect on the debt that all of us owe – our patrimony – to this country and specifically today to those who offered themselves to be sacrificed in its name.

A year ago, those were nice thoughts. Today, for me, they have names and faces.

I was naive then.

None of it has changed my mind about anything; I’ve always known what color ink the bills of politics are paid in – it’s blood red. But I’ll tell you for certain that it feels different when you are sitting across from a soldier’s widow and children and making small talk while buying them coffee and a yogurt than when you’re discussing losses as an abstract number in a study.

From Crispus Attucks to Spc. Christopher Moon, Americans have faced enemies and laid down their lives for this country. Others have died and sacrificed too – died building buildings and bridges, settling the West, mining, even just driving the mail.

But in both a symbolic and practical way, the deaths of our soldiers are different. They didn’t die by accident, or chance, or in the myriad of ways an indifferent world reminds us that it doesn’t care. They died because someone who hated us or who wanted to impose their will on us killed them.

And their comrades – from the clerk in the Pentagon to the ammo carrier standing next to them – put on the same uniform knowing that as unlikely as it may be, they could be asked to step into the breach to replace the fallen and possibly fall themselves.

And we owe them for that. It ought to be obvious, but outside the core of the military, their families, and supporters, it’s sadly usually forgotten. For every beer ad where troops deplane to a terminal full of applause, hundreds of us walk past a single soldier on a hidden pay phone as she stands trying to juggle her change and make a call.

Today is a day when I hope that we can recover a bit of that sense of debt. When we can realize what we owe those old guys in Legion caps and those young ones in ACU BDU’s.

And in a very real sense, that today’s point.

What I’m hoping today is that maybe, just maybe that will open the door in each of us to realize how much we owe to how many.

I’ll suggest that in part we’re a nation in such material debt because we refuse to understand the spiritual and political and social debt that we should have been paying off. Instead we decided that America owes us, and borrowed as much as we could to make sure we got what was coming to us.

That’s pretty much over. And a big part of the Tea Party rebellion is a split between those who have been paying the debts – served, worked productively, paid their taxes, and now see everything they worked to build – not just their retirements, but the literal infrastructure of the country crumbling – and the financial and social engineers who have profited so richly in the last decades.

I’m deeply sympathetic to that.

We need to relearn the habits of debts as things to be repaid, and today – the day we’re reminded so concretely of those who have loaned us their lives, their souls, and their health and who need to be paid back.

Today take that thought – that we owe our soldiers and veterans and should through our actions and lives pay them back. Tomorrow, revisit it and see if it can become a lens you look at all of your life through. To who else do you owe a debt that can never be repaid, and how will you serve others to try and pay it back?

Today soldiers are the primary lienholder. But they are not the only one. Everyone who’s come before us to make this country what it is – and what it could be – is our creditor. And we owe them.

We owe them our respect, and most of all we owe them our effort to make this a better place – in whatever way suits us. And we owe them the admission that what we’ve inherited – not just the physical stuff, but far more valuable, the ideas – they handed us are rare, extraordinary and exceptional.

We are a country of ideas – as Schaar says

Americans, a motley gathering of various races and cultures, were bonded together not by blood or religion, not by tradition or territory, not by the calls and traditions of a city, but by a political idea. We are a nation formed by a covenant, by dedication to a set of principles, and by an exchange of promises to uphold and advance certain commitments among ourselves and throughout the world.

There are times when that covenant must be bought with blood – our blood and others’; that is sadly the nature of covenants.

The blood isn’t always rightly shed; the notion that any human action is pure is as laughable as the idea that Shylock should have a pound of flesh taken from him without spilling blood.

Sartre says purity is for monks, and he’s right. The rest of us live in the world, defended by others if we are lucky, and if we are insightful and honest grateful for all those who chose the honor of service.

So thanks, veterans. Thanks soldiers and sailors and marines and airmen. Thanks for doing your jobs and I hope you all come home hale and whole, every one of you.

And today especially, thank you son for stepping forward and for defending me.

I am, and lots of people I talk to are. Some predict – as Jon Stewart accurately said – “end times” for the nation.

And to be sure, lots of what I see could easily move me to agree with them. Partisan rancor instead of careful administration. A deep political divide over the boundaries and role of government. International conflicts that skirt the edge of war.

Like Stewart, I see “hard times” not end times. Part of the reason is history; I read tons of it, and I keep getting reminded that what we’re going through is nothing special. Kind of like the parent of a teenager, it’s comforting to know that what you’re going through is typical.

Last week, my airplane book was A Magnificent Catastrophe: The Tumultuous Election of 1800, America’s First Presidential Campaign – one that brought this point home to me so clearly – it was a great book about the presidential election of 1800, which was the first truly partisan election. Thomas Jefferson represented the Republicans, who believed in liberty and in diminishing the control of the central government. John Adams represented the Federalists, who believed that only though the leadership of the ‘betters’ could the nation be maintained – much less led to greatness.

The French and English both were capturing or sinking our ships, impressing our sailors, and looting our international trade. The French Revolution made mob rule a real – not theoretical – risk, and an abortive slave uprising in the South challenged the Republican dominance there.

Machine politics in New York City, and Hamilton and Burr, as awful characters as the worst of our own scheming politicians.

They had problems too, back then, and solved them and moved forward. Events tempered ideology – as they always do – and Jefferson presided over the greatest expansion of federal power to date, as he taxed to build a navy and defend our trade.

Go read this terrific book, go to bed, and wake up to feel better about things.
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My friend Kevin Drum examines some of the reasons that mortgage modifications aren’t working worth a damn (as in “the mortgage is too damn high”).

If, in the long run, principal reductions really, truly were the most profitable way to deal with underwater homeowners, I’d expect that not only would banks figure this out pretty quickly, they’d be figuring out ways to create securitized bundles of principal reductions to sell to gullible German investors. That well can’t be completely dry, can it?

So why hasn’t this happened? There are a couple of obvious possibilities here. One is that the complicated nature of mortgage securitization simply makes principal reduction too hard. Once the loans have been securitized, tranched, retranched, and re-retranched, there are so many note holders with a legal stake that it’s all but impossible to get unanimous agreement to do a principal reduction. Another possibility is that banks are afraid of knock-on effects: once they start reducing principal in a few cases, their entire customer base will find out what’s going on and start withholding payment in hopes of getting the same treatment. Reducing principal for 10% of their customers might make sense, but banks might be afraid that there’s no way to hold the line there.

I personally think he’s covered the two main issues. With highly securitized debt, it’s not like there is one person at a bank that owns the loan who will make the decision (…it can literally work like that – early in my career I personally managed about $85 million in commercial ORE and pretty much called the shots on everything up to about $8 million). And yes, if banks suddenly started handing out 15% principal reductions, I might think about hitting the bank up and lowering my mortgage by $70K.

But…at the same time, foreclosing isn’t costless. It’s certainly not costless to the households who are displaced (I’m assuming that most of the people being foreclosed on are decent homebuyers with bad luck or bad underwriting skills, not flippers and pure speculators). It’s not costless to the communities they are pulled out of. And it’s not costless to the lenders; the numbers I see suggest that foreclosure pulls about $30 – $50K out of the price of an average home – and if the mortgage is underwater already, that’s a further haircut. That’s not to count the hit to the lender’s books from depreciation and other holding costs…not all of which count to lower the basis when a sale takes place.

It seems to me like we’re doing the worst possible thing, which is to lean against the collapsing wall and pray that it will somehow miraculously stabilize – that prices will ‘normalize’ – before it all falls over.

That eyes-squeezed-shut hope keeps our banks alive via an accounting fiction – worse, via an accounting lacuna where we simply agree not to look. It keeps homeowners over the edge in a constant state of false hope, and it freezes the spending and hopes of homeowners near the edge.

So what can we do that’s better?

Do we step aside and simply let it collapse and spend our money and energy picking up the pieces??

I toyed with an idea a few months ago – it never gelled, but I felt like I was onto something. It was that homeowners could take a written-down low-interest mortgage, but would lose some of the appreciation and their tax deduction.

Getting rid of – or aggressively clamping down on – the homeowners tax deduction is something we really ought to do. We subsidize overconsumption of housing by the middle and upper-middle class. We simply escalate the prices of all housing stock, and so hurt the working poor who are trying to achieve homeownership – the very people we ought to focusing our assistance on.

But it’s dumb to suggest – as I did – that workout homeowners should lose it – it simply makes the house that much less affordable.

But the idea of having them get rid of (some or all of) their appreciation isn’t dumb. It begins to separate house-as-shelter from house-as-investment, and offer to those who want to keep their house as a home – rather than a piggy bank – some options.

What if we simply agreed that people who are underwater can apply to have their mortgage reset to 100% of the current value of the house, at current low rates, but they accept a participating second from Fannie or Freddie, the terms of which are such that if they sell the house in the next seven or ten years, they get no appreciation, and thereafter they get some measure of the appreciation.

These loans have _some_ value, and can be held or sold – giving a better return to the lenders than simply foreclosing (nominal value of the participating debt plus the new mortgage, plus the ‘foreclosure hit’ that’s avoided). Communities are better off, because the ‘good’ homeowners – the ones who want to stay and keep their roots – can. I’m not jealous of them, because I can sell my house in five years and maybe make a few bucks (or not) which they can’t.

What’s the downside??
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This weekend, the wacky guys at Ranger Up (I’m so going to get pounded for saying that…) are donating 20% of their sales to Soldier’s Angels Project Valour IT.

Here’s the shirt I’m wearing today:

How can you resist?… Or just go support wounded troops directly and donate.

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We’re really close to wrapping up the Soldier’s Angels Valour-IT fundraiser.

Can I just ask a few of you to toss your lunch money over to them today and to skip a meal? Or to be more generous if the mood strikes?

Click here to donate to Valout-IT Team Army.

Click here if you want to know more and see a video that will make you cry like a little emo girl.

This weekend,the folks at Ranger UP – the home of the ‘derka derka derka’ t-shirt – will be donating 20% of their sales to Valout-IT. So get a cool t-shirt and help the cause.

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However you choose to vote, just go do it. Think of it as a ritual – a form of Communion for a democratic republic.

And as long as you’re reading this and thinking about your connection to our Republic, click over to Solder’s Angels and drop a Starbucks-equivalent or better on Project Valour-IT. The soldiers who bear the wounds received in our uniform deserve it.
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From the WSJ:

“A lot of rethinking is needed” after Democrats take their drubbing, Mr. Baird says, especially since he anticipates “a huge number of retirements” from Democrats unwilling to serve in the minority. He proposes that the House elect an independent speaker who would help drain partisanship from the body. Britain’s House of Commons uses such a model.

Democrats, he says, will also have to recognize why they lost touch with voters. “Back in September, we had pollsters and strategists from my party tell members that the mass of people didn’t care about the deficit. The mind-boggling lack of reality coming from some of the people who give us so-called advice is stunning.”