Sampson Resigns, Gonzales Under Pressure
As the details of the process by which eight out of the 93 US attorneys were fired emerge, calls have begun on Capitol Hill for the resignation of Attorney General Alberto Gonzales. Kyle Sampson has now resigned as Gonzales' chief of staff. Sampson had been directly responsible for the program under which the Justice Department determined to fire the eight U.S. attorneys.
The firings were initiated at the request of former White House Counsel Harriet Miers who wanted to follow the same procedure used in the Clinton administration and fire all 93 of the U.S. attorneys, but Sampson objected: it would create too much upheaval and discontinuity and problems with ongoing prosecutions. Ordinarily, all U.S. Attorneys submit letters of resignation after each presidential election and are then either rehired or let go at the discretion of the Attorney General. Instead Sampson rated attorneys on how well they followed administration policy and how effective they were at their jobs, and ultimately identified the eight who were fired. According to latest reports, one of the key issues was how aggressively the attorneys were pursuing allegations of election fraud in cases where close elections had significant irregularities which went uninvestigated. The rating system was independent of normal performance evaluations, and has been criticized for being primarily political in nature.
The White House consulted closely on the firings, and there was some concern raised by Sampson that there might be political repercussions if legislators from the states where the attorneys were working raised objections. Partisan political outcry has been strong from Democrats on Capitol Hill, with Judiciary Committee Chairman Senator John Conyers convening a hearing last week to question those involved, including the fired attorneys. After the hearings Conyers commented, "Today, we received strong evidence that the firing of these U.S. Attorneys was politically motivated, and we clearly need to follow up on these developments with further investigations."
Some Democrats have called for the resignation of Attorney General Gonzales, but he has clearly indicated that he regrets the abrupt character of the firings, but does not believe that anything took place which was outside of the scope of normal Justice Department practices, maintaining that the attorneys fired were fired for cause, in most of the cases because they did not follow specific directives to pursue administration initiatives on gun crime, election fraud, drug enforcement and other issues.
Pace Steps Over the Invisible Line
When the military has a policy of "don't ask, don't tell" for homosexuals, it might be advisable for military leaders to maintain a similar policy of circumspection. Joint Chiefs Chairman General Peter Pace touched off a storm of controversy this week when he condemned homosexuals in an interview with the Chicago Tribune in which he said: "I believe that homosexual acts between individuals are immoral, and that we should not condone immoral acts. I do not believe the United States is well served by a policy that says it is OK to be immoral in any way." He also went on to compare homosexuality to adultery.
Pace immediately came under fire from gay advocacy groups and explained that his intent was merely to express his support for the continuation of the "don't ask, don't tell" policy which originated under the Clinton administration. Clearly he went much further than his original intent – with an expression of personal moral belief which many have found inappropriate. Pace has not been asked to resign over his statements, but may face further problems because of differences with the Bush administration over Iraq policy.
At a time when military manpower is sorely taxed, many regard as extraordinarily short-sighted Pace's enthusiastic endorsement of a policy which excludes a large number of willing soldiers from service unless they choose to conceal their sexual identity. Over 10,000 openly gay soldiers have been forced to leave the service since the policy was initiated in 1994.
Wall Street Staggers In Response to Junk Mortgage News
The price of the recent real estate boom was paid in the stock market on Tuesday, as news about the high level of 'junk' mortgages which are in default raised investor concerns and reversed the recovering trend which had begun after last-week's major adjustment. The Dow Jones had dropped over 240 points by closing.
In the recent real estate boom, developers took advantage of the easy availability of credit to offer low qualifying or non-qualifying loans to many first time home-buyers and buyers who might not normally have been able to get credit. These so-called "junk" "" financing methods which put home buyers at greater risk and increased profits for unscrupulous lenders and developers.
As the real estate market calms down, buyers find themselves saddled with homes which are not holding their value, financed with double mortgages with high payments, increasing adjustable rates, or even very unattractive front-loaded or balloon payment loans. Some can't continue to afford payments which have increased beyond a level they could barely pay in the first place. Others who already have bad credit feel little motivation to stay in a home which is costing them too much and losing value.
The Mortgage Bankers Association has now announced that .54% of all mortgages are in foreclosure and over 6% are in default. The foreclosure rate is the highest it has been in more than 3 decades, including the post boom period of high foreclosures in the 1980s. The default rate is only up slightly and is not as high as it was during the 2002/2003 recession.
Banks are already tightening up on loan requirements, and interest rates are expected to continue to increase. With the increase in availability of foreclosed homes at discounted prices the demand for new homes is also likely to slow, leading to contraction in the construction industry. In combination with a weak day in overseas markets this news led to a 242 point drop in the Dow on Tuesday and somewhat more moderate drops in the other indexes.Powered by Sidelines