This was the lead story on HuffingtonPost this morning and a similar story appeared on the morning newscast. I am not surprised and anyone who is a) hasn't been following some of the real estate news over the last month and b) haven't thought through the consequences of those stories. A rising number of homeowners are 'strategically' walking away from their underwater mortgages. While I have some sympathy for some of the homeowners in this situation, I also have some sympathy for the mortgage lenders who have to deal with them. One story I read a couple of weeks back focused on a couple who had the choice of paying their considerable mortgage payment or losing their business. If they did not pay the mortgage they had a cash flow that would save the business but they risked losing both home and business by continuing to pay the mortgage. And they were getting no help from the bank holding the mortgage. However, I don't think that even sympathetic homeowners should be able to walk away from one mortgage and then get another, especially a government guaranteed one, with ease (or at all). I also think that the bankruptcy laws should be adjusted so that banks cannot hit homeowners up for more than the value of the property securing the mortgage.
The Wall Street Journal has this article that provides some food for thought on the topic of deep-water oil drilling and the long term inadequacy of both government regulation and oil companies' responses to potential oil spills. The Minerals Management Service has known since 2000 that their models for how a major oil spill would move in the gulf and how it would disperse through evaporation and the action of wind and waves was inaccurate. They informed the oil companies of this and claimed they would promulgate new models and requirements but never followed through. MMS did update their models in 2004 but the experience of the Deepwater Horizon spill shows that the new models were also woefully inaccurate and inadequate. Oil companies are required to use the MMS models in formulating their disaster response plans. "BP has come under heavy fire from Congress and environmental groups for its lack of readiness to handle a worst-case spill. But that criticism has overlooked a key fact: BP was required by federal regulators to base its preparations on Interior Department models that were last updated in 2004." So one might ask, given that the oil companies knew that the models were inadequate, why didn't they use the models as a basis for their responses and then go beyond the models to strengthen their plans? Well, the answer might be in an interesting comment made on the Casey Daily Dispatch recently (sorry, I didn't keep the link). The legal liability cap, which has infrequently been mentioned in any story about the spill, is suppose to be about $75M unless 'gross negligence' is proven. Casey's author noted that that is an invitation for oil companies to cut corners to save money and time because the potential fine was so much lower than the projected profits. If the executives knew they would be held liable for the total costs of any spill, even if it were an 'accident,' they would have strong incentives to make sure that 'accidents' didn't happen. They don't have any such incentives at present.
I don't have much to say about the change in the command structure in the Afghanistan war (aka, the McCrystal resignation). I cannot believe how incredibly stupid the General was in 1) giving that interview, 2) allowing his aids to make the remarks they made without reprimand (and I cannot believe that that was the ONLY time such remarks were made), and 3) thinking the President would let him get away with insubordination. Maybe he, like certain financial CEOs, thought he was too big to fail or fall. My problems with our military operations goes far deeper than simply one General. There is a line in the movie "Elizabeth" in which Elizabeth I says "I do not like wars. They have uncertain outcomes." We have gone into our various military adventures over the last 60 years thinking that the outcome is certain. Unfortunately, that has hardly the case. Korea--stalemate; the ceasefire set the boundaries to what they had been before the conflict flared up. Vietnam--declared victory and got out; but the North won and rules to this day. Somalia, Lebanon--hardly victories and they cost both reputation, lives, and treasure for no gain. We now have Iraq and Afghanistan, neither of which are shining successes. Since the outcomes of wars are uncertain we should be very careful where and when we fight. We should be willing to use whatever force is required to win and, if we aren't, we shouldn't. There hasn't been a war since WWII where the stakes were so overwhelming we were willing to use any and all weapons (including saturation bombing and nuclear bombs) to win. And, as a consequence, we haven't won. The other problem is that the military is not the proper tool for the jobs they have been assigned in these conflicts. "Winning the hearts and minds" is not the proper job of the military. That requires other tools.
Evidently, I have found some interesting items on the topic I had not intended to talk about. Rain at Rainy Day Thoughts has started another blog for political topics, Rainy Day Things. She had some suspicions that McCrystal's actions were anything but accidental (I love how that word keeps popping up lately) nor spontaneous. Rather, they served some deeper, hidden motive. Rain isn't the only one with a suspicious mind nor am I the only one whose mind runs parallel to hers on the suspicion meter. Jim Sleeper at TPMCafe has similar thoughts today. And both express thoughts similar to mine. Sleeper says that McCrystal used the interview as a way out of his assignment and as an expression of dissatisfaction over a strategy that does not fully fund the anti-insurgency policy as a part of a 'total war.' To my mind, the term 'total war' is redundant. And the term 'limited war' is an oxymoron. Unfortunately, the oxymoron has ruled our war making for the last two-thirds of a century.