Government Efficiency vs. Business Efficiency: Sign Language Edition

 "Mind Your Business!"

Let's ask ourselves again if the private sector is more efficient than government. It's an ongoing debate in politics and finance, and one that fuels the Republican strategy of doing nothing. Government is the problem, they say. We know that is artful nonsense.

One of the reasons unemployment remains stuck at 9.6% despite low interest rates, government spending (stimulus) and targeted tax cuts is because the business world is relentlessly refusing to cooperate in a manner befitting the times. Pundits, economists and politicians put out the line that businesses are confused, frozen even, amidst the uncertainty of life under the Obama Administration. This discounts the very real resistance that is going on that prevents any sort of finality that would create more optimism. In the same way that Republicans weaken or kill new policies by virtue of a solid stone wall, so too businesses do their little bit to slow down progress. And if slowing progress means a meandering economy, so be it. Better to profit now by processing mortgage foreclosures in half baked fashion, or to stop writing new child insurance policies, than do something that benefits middle Americans and America long term.

Today we have the 50 attorney generals across the United States looking into how the banks rushed through foreclosures. This news has led, and will continue to lead, to moratoriums on further action against homeowners.

This might seem good, even humane, but in actuality it further delays the process of forcing assets into the right hands and at the right price. Without a final unwinding of inflated assets, the economy cannot fully normalize.
Our large banks in their desire to speed the process, cut corners. So while raking in bundles of money on the one end, they sacrificed deliberate and careful process on the other, shafting homeowners out of adequate home settlement resolutions.

"The depositions paint a surreal picture of foreclosure experts who didn't understand even the most elementary aspects of the mortgage or foreclosure process -- even though they were entrusted as the records custodians of homeowners' loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn't define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff's assignor or defendant. She testified that she didn't know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. "I don't know the ins and outs of the loan, I just sign documents," she said at one point."

(Huffingtonpost.com)

The argument is not that people should be allowed to keep their homes. In fact we feel the contrary. Those who woefully overpaid will likely default even with an adjustment, and cases like that need to be allowed to find their own natural death. Equally, we are not suggesting that businesses are evil, or that the banking sector bares any sort of blanket responsibility for our economic situation.

What remains egregious is that the financial sector can push back at President Obama, even as they now rake in profits and bonuses, while at the same time not taking care of business. They were bailed out, rightfully so, but the minimal least they can do, is to keep their mouths shut, and focus on handling the mess they helped create.

That would mean looking at the foreclosure documents and making wise and careful decisions on who should be allowed to keep their homes, and who remains a lost cost. You can't do this if you are shedding workers, or better, devoting profits to massive bonuses. That money could be put to use hiring better staff, and thus lowering the unemployment rate.

With that hiring you get a double economic bang. More people working, and used to unclog the mortgage mess that lingers across the system like a fat lady on a chaise.

But nope. Instead it's all push back and political funding and outrage. And this:

For a housing recovery to occur, all the foreclosed properties -- which could account for 40 percent of all residential sales by 2012 -- need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.

"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."

(Huffingtonpost.com)

Now whose fault is that, and who is being inefficient?