Today begins my annual trek to Indianapolis in the search of Continuing Legal Education credits. I’ve found that the Indiana Law Updates are a good program. They are an annual, two day, survey of developments in (mostly) Indiana law in wide variety of areas of practice. The presenters are generally very good. The presentations generally don’t go into too much depth, but they give you a nice idea of what has been going on over the past year and give you a fighting chance of not committing malpractice.

Michelle Blackston, writing at The Thicket at State Legislatures, has an entry entitled Highway Trust Fund runs out of gas. Apparently the National Highway Trust Fund is funded by the federal gas tax which hasn’t been increased since 1993. In the meantime, inflation and international competition for the materials used in transportation infrastructure have severely eroded the purchasing power of this fund which is now approaching zero.

In her press release, Secretary [of Transportation] Mary Peters blames Congress for ignoring the dwindling fund. Peters went as far as to say: “Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap. Americans cannot afford to have Congress play ‘kick the can’ with highway funding for another year, another month, or frankly, another week.”

Up until last week, however, the Administration opposed and threatened to veto the very legislation this Department is “recommending.” The immediate action Secretary Peters is calling for includes: 1- Legislation that will transfer $8 billion from the general fund to the highway account; 2- Pay states a proportional reimbursement until the $8 billion transfer is approved.

The Highway Trust Fund pays for a portion of the nation’s roads, bridges and interstate system. In fact, the money for road repairs has already been spent and the federal government reimburses states for this work. Now, it looks as though states will only receive 75% of their reimbursements, if any at all.

It all flows downhill. You can bet that when the States get shorted, local government will get shorted in return. Then, presumably, Governor Daniels will blame locals for their excessive spending.

The Bush administration seized mortgage giants Fannie Mae and Freddie Mac with potentially a $200 billion price tag. With that kind of cash, we could fight a significant fraction of a war in the Middle East. So, what are we getting for our money?

Officials announced that both giant institutions were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars. Treasury Secretary Henry Paulson said allowing the companies to fail would have extracted a far higher price on consumers by driving up the cost of home loans and all other types of borrowing because the failures would “create great turmoil in our financial markets here at home and around the globe.”

Mark Zandi, chief economist at Moody’s Economy .com, predicted that 30-year mortgage rates, currently averaging 6.35 percent nationwide, could dip to close to 5.5 percent. That’s because investors will be more willing to buy the debt issued by Fannie and Freddie — and at lower rates — since the federal government is now explicitly standing behind that debt.

So, we have (hopefully) added stability to the market and lower mortgage rates. However, being an American with a deep Puritan heritage, my question is “who will be punished for this?” Will it be those who profited from poor decisions? My heathen Magic 8-ball indicates “Outlook not so good.”

The 90s turns out to have been very important to my world view. I grew up in the 70s and 80s which was a time when local government (in my area, at least) was always shorting infrastructure and decay seemed to be the only option.

In the 90s, I finally got to see local government fixing and building things. Conditions on the ground actually *improved.* As a young man, I was shown that civic improvement instead of decay was possible.

When I was a kid, there was always talk about the decay of the bridges going over the Whitewater River in Richmond, Indiana. When I was 13 or so, I asked my Dad — how did they ever *build* those bridges if they can’t even *maintain* them now? (Incidentally, it seems like I had just recently read Isaac Asimov’s Foundation series where the Galactic Empire is in decline and nobody knows how to fix the stuff that’s breaking). Dad just kind of shrugged off the question — I don’t know if he just didn’t know or because he was busy with something else. But, I remembered the question, and in the 90s when it seemed like there was more money for improving infrastructure, I realized that my snapshot of the 80s wasn’t the inevitable state of things.

Teenagers today could be forgiven if they also thought decline was the inevitable state of things. In fact, there seems to be a non-trivial portion of the population who think that the past was always better and the future is always grim — as if Eden were real and not a myth, and humans have been in a constant state of decay since then and will continue to decline until the Rapture. But that’s not the way it is. It’s actually possible to improve things. That’s sort of a banal point, but something we shouldn’t forget.

There is going to be a free music festival in Lafayette today (9/7/08), the Turn Indiana Blue Music Festival. Its purpose is to promote local candidates and encourage citizens to play an active role in their community. It will run from 11 a.m. to 8:30 p.m. and feature bands on two stages at Riehle Plaza in downtown Lafayette and on the pedestrian bridge going over the Wabash to West Lafayette. The promotional site says that it will include local food vendors — which I hope translates into what I term “booth food,” the presence of which turns me from an indifferent eater into a bottomless pit.

The bands playing are:
Kristopher Roe of the Ataris
Green Room Rockers
Old School
Woodstove Flapjacks
No Apparent Reason
Atari Logic
Alaska Westwind
Lush
New York Street
Lincoln Street Band
Ben Ezra
Crash Landing
Blind Boy

Update Amy, the kids, and I went for a few hours and had a nice time. Not listed above, but very enjoyable was Mike Reeb and the Consequences. Most of the music was more upbeat, but I particularly liked “It’s Been a Real Hard Year.”

One of my assistants at work once said, “when you’re talking to Doug, you never know when a history lesson is going to break out.” Absolutely true. Today my attention drifted to the Battle of Guadalcanal. I know some people can quote you chapter and verse of the ins and outs of any WWII military campaign. I’m not one of those people.

But, my understanding is that the Battle of Guadalcanal was one of the nastiest pieces of work of the War; particularly for the marines involved in taking the beaches. It was the first major assault by the U.S. on Japan and marked a turning point in the war. Strategically, taking the area was important to disrupt Japan’s ability to threaten supply routes between the U.S., Australia, and New Zealand. It was also useful as a base of operations for the U.S.

My favorite fictional account of the battle was in Neal Stephenson’s Cryptonomicon where marine, Bobby Shaftoe, ends up half-crazed and raving about a giant lizard and bad-mouthing MacArthur (eventually to Ronald Reagan whose service consisted of making public relations productions.)

In any event, the horrors of Guadalcanal seem grueling well beyond the normal challenges of war.

Nearly 11.5% of Indiana homes with mortgages are either behind or in foreclosure. That strikes me as an enormous number.

A drop in income — whether through a lost job, divorce, death of a spouse or health problems — is the No. 1 reason people fall behind on their mortgages and lose their homes.

The association’s latest national delinquency survey, released Friday, shows damage from the housing crisis worsening as the source of trouble in the market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out loans with ballooning monthly payments.

A buddy of mine in Arizona who works in the real estate industry tells me that the banks he works with tend to be penny-wise, pound foolish in these situations. They refuse to compromise much, if at all, on their loans and so they end up losing out entirely on the notes — at least to the extent of the difference between the value of the home in a foreclosure sale and the value of the note.

My own experience in the collection industry is that the individuals working the account tend to have every incentive, in terms of their own jobs, to refuse to compromise a bill and very little incentive to take a big picture approach and maximize the amount of return on the account by compromising. If an account goes under because of a bankruptcy, the person working the account has a nice, clean reason to close it without having to explain to his or her manager. If, on the other hand, the account manager takes 60% and closes the account, he or she has to defend the judgment call, and probably going to get negative reviews if he or she has a lot of these sorts of compromises in his or her portfolio.

I don’t really know how wide spread these sorts of incentives are and whether it’s the same in the mortgage industry, but I wouldn’t be surprised if it was pervasive.

I know the calendar requires the equinox before it’s officially fall, but in my mind the seasons are more associated with calendar months — September, October, and November for fall. Weather-wise, this feels like the first weekend of fall. Football is gearing up. I love fall — except it leads inexorably to winter and the holiday season which I do not love.

Indiana really has some awful weather when you get right down to it. Winters that bounce around between frigid snow and ice and annoying, sloppy cold rain. Summers that swelter with heat and wet-wool blanket like humidity. But, generally we do fall pretty well. As a Hoosier, it’s hard for me to enjoy any good weather because I feel like we’re just going to get bad weather as “punishment.” But, I’ll try.

There isn’t even an article under the headline for an AP story that showed up in my RSS feed for the Indy Star. But the headline read: “McCain, Obama Hunt Independents”

Eep! They should probably leave that sort of thing to Cheney.

I normally don’t bother with Indianapolis issues since: a) I’m not from Indy; and b) Indy is more than adequately covered by other blogs; but this strikes me as a recipe for sour relations.

The Indy/Marion County City County Council was sold on a county option income tax as a safety measure to add 100 officers.

Instead, city officials said Wednesday, the department this year spent the amount of money it would have cost to hire those officers on immediate needs not covered in the 2008 budget: retirement benefits, overtime, fuel and contractual raises.

Maybe there were no other options, but still when your fiscal body and the public feels like they were the victims of a bait and switch with respect to tax increases; you’re begging for a long-term dysfunctional relationship.