The Lafayette Journal & Courier has a brief article reporting that the Lafayette School Corporation will be borrowing $17.7 million to meet its obligations in 2008 until property tax disbursements are made by the state. Apparently this is not at all uncommon around the state.

I wonder how much money is spent servicing the debt on these short term loans. Seems to me there is some potential for savings here by getting the disbursements to the school corporations in time to meet the schools’ obligations.

The AP has an article entitled That would be the wrong wallet to steal. In Richmond, Indiana, Glen Fox apparently broke into a truck and stole the wallet and credit cards belonging to Wayne County Prosecutor Mike Shipman then ran up substantial charges on the credit card.

The Colts’ special teams let them down, allowing the Chargers to score two touchdowns. Then the Colts almost come back but can’t quite pull it off. At the end of the game, they got their first down 10 seconds too late. Had it happened with more than two minutes left, they could have run down the clock, kicked the field goal from close and won the game without giving the ball back to San Diego. The Chargers had used their challenges and couldn’t have challenged the spot. Instead, the officials chose to review the spot; set Indy back a few inches depriving them of the first down. Then, the officiating crew called a phantom false start on the offense. Oh, and let’s not forget the “inadvertent whistle” that deprived the Colts of something like an 80 or 90 yard interception return.

The Colts offense is held together with spit and baling wire at this point, and they still almost won. God I’m pissed right now.

I spent part of this Veterans Day watching Starship Troopers. It seemed vaguely appropriate. “Remember, service guarantees citizenship.”

And, as has become Veteran’s Day tradition here around Masson’s Blog, Dulce Et Decorum Et:

Bent double, like old beggars under sacks,
Knock-kneed, coughing like hags, we cursed through sludge,
Till on the haunting flares we turned our backs
And towards our distant rest began to trudge.
Men marched asleep. Many had lost their boots
But limped on, blood-shod. All went lame; all blind;
Drunk with fatigue; deaf even to the hoots
Of tired, outstripped Five-Nines that dropped behind.

Gas! Gas! Quick, boys! – An ecstasy of fumbling,
Fitting the clumsy helmets just in time;
But someone still was yelling out and stumbling,
And flound’ring like a man in fire or lime . . .
Dim, through the misty panes and thick green light,
As under a green sea, I saw him drowning.
In all my dreams, before my helpless sight,
He plunges at me, guttering, choking, drowning.

If in some smothering dreams you too could pace
Behind the wagon that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil’s sick of sin;
If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues,
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie; Dulce et Decorum est
Pro patria mori.

Indiana is second only to Ohio in foreclosure rates according to this article in the Fort Wayne Journal Gazette. Apparently a study committee is looking at the issue and the State has launched some counseling efforts, including a telephone hotline and a website. Part of the plan appears to be educating people about what, exactly, it means to have an adjustable rate mortgage.

Going forward, there are ideas being floated such as providing prospective borrowers were summaries of maximum potential rates and maximum potential monthly payments.

But committee member Rep. Randy Borror, R-Fort Wayne, questioned whether this change will make any difference, especially since it will be one more piece of paper in a large stack for the borrower to sign at closing.

“I question that as being a solution to the problem,” he said. “You are signing your name so many times to so many documents. You can push back closing to review the documents if you so choose. You are in control of that process.”

Borror apparently doesn’t have a very realistic idea of how the home closing process usually works. I don’t disagree that pushing back the closing to review the documents might be possible — unless to do so would be a breach of your purchase agreement — but the home closing process isn’t generally very conducive to a thorough review of documents. Usually the paperwork isn’t ready until the last minute. A good number of people are waiting at the table to get the job done. There’s a good chance that time frames for moving out of your old place and getting your stuff to your new place along with the home seller’s time frame for getting their stuff out of what will be your new house and into their new house are tight. The logistics of the situation put the pressure on to get the closing done. For Borror to say that the borrower is really in control of the process doesn’t seem very realistic.

Other suggestions include eliminating prepayment penalties which would allow people to refinance; increasing penalties for fraudulent lending practices; and include a contact sheet in closing documents identifying everyone involved in the process. There is also the possibility of limiting the practice of accepting “stated incomes” for initiating loans and requiring some sort of actual proof. Some want to hold lenders accountable for activities of the loan brokers or appraisers involved in fraudulent loan transactions.

Borror said the state needs to tighten its laws for appraisers and mortgage brokers, but he cautioned against overregulating the industry.

“We must also understand that there is an element of personal responsibility any time anyone enters into a home contract for a home or car, whatever,” Borror said. “I am not someone who is going to propose multiple regulations across industry lines where we kill the golden goose.

“It’s a delicate balance.”

All of this might be good for people buying houses in the future, but to get them out of their current situation, it seems to me that there will have to be some combination of lenders accepting less and borrowers paying more. I’m not sure where that comes into these plans.

The Lafayette Journal and Courier is reporting on vandalism to the Tippecanoe Battle Ground monument. Even though I’m not generally inclined to believe in hell, I find myself hoping there is a special place there for the kinds of people who would deface our monuments in this way.

Messages spray-painted on the monument said, “America repent,”

“Justice will be served,” “Coward,” “Give us back our spiritual capital” and “Tecumseh’s not dead.”

Tippecanoe County Parks & Recreation Department superintendent Allen Nail gets it exactly right when he says:

“We see the battlefield as hallowed ground where 196 years ago brave men, red and white, fought and died courageously,” Nail said. “I don’t know how anybody could hope to do honor by doing this sort of thing.”

Hopefully they figure out who did this so they can prosecute and force repayment for the repairs. The Tippecanoe Battle Ground is one of my favorite places to take my kids. This is really appalling to me.

The Hoosier Pundit has a post commenting on whether Indianapolis Democrats should repeal the controversial county option income tax they forced through earlier this year.

The Democrats in Indianapolis adopted a county option income tax to pay for public safety. (Indy was given special dispensation by the legislature to raise this income tax by itself — other counties had to implement two income taxes designed for property tax relief before the public safety tax was an option.) Indianapolis Republicans railed against this tax increase. I believe mayor-elect Ballard was among them. (Correct me if I’m wrong on that.) I believe there is also a lawsuit challenging the validity of the vote on the tax increase because one of the council members wasn’t legitimately a resident of the district to which the member was elected.

Hoosier Pundit says it would be “vindictive” of the Democrats to repeal the tax. Why? Give the voters and the Republicans what they said they wanted. It might be a little passive aggressive, I suppose, but on what grounds can these people complain? I would be shocked, shocked to find out that the Marion County Republicans would want the political issue of the tax increase to use against the Democrats and the tax revenue they need to actually run the city.

Update I was considering this post and previous comments I’ve made on various boards and trying to figure out why the topic of Indy’s county option income tax and its potential repeal was of such interest to me. I was only mildly interested when it was passed, after all. And, of course, the political gamesmanship is interesting as well. But I don’t think that’s it.

Here’s the thing. Nobody likes paying taxes, but taxes are necessary for a functioning government. A functioning government is necessary to make our communities places where we can live happy lives. It’s tough to prosper in a shit hole.

Was the Indy county income tax a necessary one? I have absolutely no idea. I have no knowledge of Indy’s budget, what expenditures are necessary and what expenditures are unnecessary. But, I think it’s important for political operatives to be judicious in the taxes they oppose. By all means, oppose the unnecessary ones. Citizens will also not thrive if they are taxed for government expenditures that are not beneficial. But, raising a huge stink over a necessary tax increase creates a toxic political environment that leads to a dysfunctional and underfunded government which in turn contributes to our communities turning into shit holes.

And, at the end of the day, it doesn’t matter whether or not I think the Indy tax increases were necessary. The only important thing is whether Indy’s new masters — Ballard and the Republican County Council members regarded the tax increase as necessary but railed against it anyway, purely for political gain. That sort of hypocrisy should be condemned in the harshest possible terms. If they regarded the tax increase as unnecessary and railed against it, that is obviously fine. But, at the same time, they would have no reason not to repeal the tax themselves or basis for complaint if the outgoing Democrats repealed the tax prior to departure.

An interesting article on the effects of the bankruptcy bill on banks. The 2005 bankruptcy bill made it harder for debtors to file Chapter 7 Bankruptcy and forced more into Chapter 13 bankruptcy instead. Essentially the difference is this: In a Chapter 7, the bankruptcy court accounts for all of the debtor’s assets, deducts the statutory exemptions to which the debtor is entitled, liquidates the remainder (if any) and distributes it to the creditors. It’s over relatively quickly and, frequently, there are not many assets available for distribution. In a Chapter 13, the debtor is instead required to set up a 3 to 5 year plan wherein a chunk of the debtor’s income goes to the bankruptcy court for distribution. It takes a long time to get that “fresh start” under the bankruptcy laws.

The Bloomberg article suggests that this is backfiring on the banks. They had hoped to force more debtors into paying off more of their credit card debt this way. And, apparently, they are. However, now, partially as a result, they are getting more foreclosures.

The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.

“Be careful what you wish for,” Westbrook said. “They wanted to make sure that people kept paying their credit cards, and what they’re getting is more foreclosures.”
. . .
“The law had an unintended consequence of taking away a relief valve that mortgage borrowers used to have,” said Rod Dubitsky, head of asset-backed research for Credit Suisse Holdings USA Inc. in New York. “It’s bad for the mortgage borrowers and bad for subprime investors because it means more losses.”

I did not warn against this specifically when I was commenting on the bankruptcy bill, but I think I was driving in this general direction.

I also tend to think that the bankruptcy law will make the next recession tougher to shake off. Your typical small business owner has to sign personal guarantees for any credit extended to his business. Recession comes. Business goes under. Business owner is on the hook for the business debts. Now, instead of being able to get a fresh start after a few months through a Chapter 7, he’ll have the anvil of a Chapter 13 hanging around his neck for 5 years. There are probably going to be a lot of entrepreneurial types alongside the genuine deadbeats in Chapter 13 plans.

By getting debtors mired in Chapter 13s instead of quickly discharged in a Chapter 7, I think there is more drag on the economy.