I see you!

I wonder whether George W. Bush has the chops to scorn anyone these days?

It was my misfortune to listen to the current President speak to the New York Economic Club a few weeks ago. How curious the silence as he spoke forth the lines that in a partisan crowd would have drawn applause! Indeed the economic world was crashing down around the economists that day – it was a particularly bad day in a bad year at the end of a bad administration. But it’s George Bush’s economy too and his speech still was drafted with pauses for applause. Even the ideologues were silent.

My point though was about scorn. One aspect of this speech was that Bush again traveled the well-trodden road of contempt for the bankruptcy process. Now I gave up my personal livelihood (used to be a consumer bankruptcy attorney) in 2006 in response to this scorn so I know that it is not just an emotion or a sound byte. Perhaps it is unrealistic, these days, to suggest that the President owes a decent respect to his subjects, but the truth is that scorn for bankruptcy judges is not something George Bush is qualified to exhibit.

The issue was the foreclosure crisis aspect of the larger sub-prime lending crisis. There are so many aspects to this crisis that the mind boggles at the task of attaining perspective. In confidence, however, that the Bush administration will exert itself appropriately (or more) in the interests of wealthy investors, let me take a moment to defend the group he won’t recur to in this, the extremis of eight years of his economic policies.

Bankruptcy judges actually know how this economy works. Every day they see the flotsam and jetsam, and the occasional bleeding amputations, that our economy generates. It is not by all means the financial equivalent of Welfare Queens out there. We’ve got the feckless and abusive, but we’ve also got the hard-working and naive out there obtaining their discharges. In the business courts is a higher calibre of intellect on both sides of the Notice of Bankruptcy Filing. Perhaps there it’s harder, since everyone is so well-dressed, to notice that even the creditors have made mistakes or they wouldn’t be in Bankruptcy Court either, but the savage American impulses to deny reality, fake success and mobilize economic power to crush the wounded could hardly be in better display than in Bankruptcy Court.

As Federal judgeships fill up with partisan appointees rather than the best business lawyers, it’s really possible that the only people who know how the U.S. economy functions actually are the bankruptcy judges, or at least those among them who are not yet infected with the meretricious fantasy that the bankrupt of this culture created their own dilemmas with primarily moral failings.

To recur to my original point, George Bush miscarries his own economic salvation when he rejects the aid of the bankruptcy courts in resolving the foreclosure crisis. Since 1979 Chapter 13 of the Bankruptcy Code has been a laboratory of the possibilities of change for the embattled middle class. No one wants to really engage the issue, but the truth is that some of the foreclosure problem is the result of unwise speculation and some of it is the victimization of the middle class by their better-dressed betters. To resolve the crisis requires discretion – separating the people who deserve help from the ones who don’t and then delivering the assistance.

When George Bush scorns his own judiciary as helpers in this struggle he reveals again what many have felt for a very long time: The problems of little people have no value to the government these days. People of the social class of George Bush, and people that aspire to it, have loftier goals. What I used to think of as my life work – helping little people think their way out of big problems – isn’t an arena in which there are global rewards. The problems are solvable and the techniques can be learned but no one in power has cared about them for a very long time. In scorning the assistance of the bankruptcy judges, our President has made this clear once again.

I’m guessing no one else is going to say this, because that’s not how the global game is played, but I’m still a locally-based American, to whom the welfare of my countrymen really does matter, and I have one message for the powerful who believe no one has noticed their shift of allegiances: I see you.

[ I wonder how the Federal housing administration is doing, trying to process the applications of desperate homeowners? When I first opened my practice in 1996, they put one client through a bizarrely-protracted 8-month evaluation process which ultimately bottomed on the reef that this first-time homeowner ran very few expenses through an actual bank account and wasn’t able, therefore, to fully document his monthly grocery expenditures during the year, two years previous, in which his wife spent the mortgage money on drugs. There was a program but help was denied. I still know the man. The help, had it been granted, would have been enough. ]

[ And a book remains to be written about how George H.W. Bush paid his sons’ ways out of the Savings and Loan Crisis and the more personal dilemmas they got themselves into. I object to the rich buying for their children freedom from the natural economic consequences of market failures, especially when justice is bought off in the process. None of these people have standing to object to the poor man doing the same thing for himself in bankruptcy court. ]