The Barbershop has re-located

The proprietor has moved the shop to ChicagoNow, a Chicago Tribune site that showcases some of the best bloggers in the Chicago area. You can logo on to the Barbershop home page here. The ChicagoNow home page is here.

You'll still be able to post comments with the same ease as in this location. The proprietor also will keep this web site alive if you wish to review old posts.

Monday, July 28, 2008

There's gold for Chicago pols in new housing bill

By Dennis Byrne
Chicago Tribune

It shouldn't be hard for Chicago and Illinois pols to turn the humongous housing bill that passed the U.S. House last week into a pot of gold for their cronies and themselves.

Even a naif like me could figure out how to convert to personal use Chicago and Illinois' share—yet to be determined—of the $4 billion expressed from Washington to buy and rehabilitate foreclosed homes. Someone from the Department of Rising Neighborhoods or whatever local agency administers the plan would call his cousin and say, "Hey, Jake, old buddy, I've got a great deal for you. We just bought a foreclosed home for $200,000. I'll make sure we sell it to you for $150,000. You can then turn around and sell it for $200,000, or whatever you can get, and we'll split the difference."

Rep. Peter Roskam (R-Ill.) outlined this plausible scenario in detailing his opposition to the housing bill that will rescue homeowners, banks, financial institutions, brokers and others troubled by the housing bust.

At first, the bill was an effort to help homeowners in difficulty, but the bill has grown to gargantuan proportions. In addition to the $4 billion, the bill would provide $5.3 billion for more affordable housing, $4.6 billion for first-time home buyers, $729 million for home-loan insurance and $210 million for counseling for homeowners facing foreclosure. It also would provide untold billions to prop up the nation's top mortgage makers, Fannie Mae and Freddie Mac, in what is described as the most concerted effort to stabilize the mortgage and financial markets since the Great Depression.

That's according to the summaries handed out to reporters, who, I'm willing to bet, haven't explored every wrinkle of this monster which, by the way, will increase the national debt limit to $10.6 trillion from $9.8 trillion to help pay for all this largesse.

But Roskam has read it, and what jumped out at him was the total lack of protections against fraud and chicanery of the type that characterizes Chicago and Illinois politics. Roskam, in House floor debate, noted how the bill's proponents expressed confidence that cities—"victims" according to the bill's proponents—would spend the money judiciously and wisely. Roskam said "judicious" and "wise" were not terms he would apply to Chicago and Illinois. "Do you want Rod Blagojevich to be your landlord?" Roskam asked in a news statement. Rep. Maxine Waters (D-Calif.) didn't like what she heard Roskam saying about the—shall we say—opportunities that the bill would open up, and issued a scold. Roskam, she said, obviously hadn't read the bill. Otherwise he would know that all the desired protections are in a plan that housing authorities must submit to the Department of Housing and Urban Development. Roskam quickly replied by citing the plan requirements, "on page 3, section 4 of the bill." And, no, he continued, the plan that Waters mentioned indeed has "no prohibition against self-dealing." It only requires such things as setting goals for sales and accessibility by different groups. It is not about "potentially corrupt practices."

Obviously, a plea to the national conscience to stem Chicago corruption won't do much to slow down this juggernaut. And while Roskam might be playing to his west suburban audience by, tsk, picking on Chicago, he can just as easily be painted by political opponents as favoring the throwing of people out onto the streets and the cataclysmic failure of the nation's housing and financial markets. The cost of this bill is just about anyone's guess; Congressional Budget Office estimates run to $41.7 billion. So, when you're talking about money like that, what's a few hundred thousand, or even a couple of million, skimmed off by Chicago and Illinois fixers?

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