Since then, the financial industry got billions, the auto industry was rescued, and the rest of us got the bills and not much else.

The financial industry is now strong enough to run the country for the rich. The auto industry is no longer on its last wheels.

But even the most obvious and urgently needed reforms remain undone.

Take the mortgage industry. Please.

Remember all the mortgage documentation problems that were revealed after the flood of foreclosures started drowning homeowners? Turns out the a lot of banks had screwed-up documentation for the properties they were taking “back.” Their work was so bad and fraudulent that sometimes they wrongly kicked people out of their houses. (Matt Taibbi had a great piece on this in Rolling Stone.)  The mess screamed for a regulatory fix.

But it didn’t happen.

The Government Accountability Office provided testimony before the Senate Subcommittee on Housing, Transportation and Community Development last month that just goes to show that it takes a whole government to ensure that nothing gets done. 

In the beginning, before the crash, regulators ignored the problems that were going to push the economy to the edge of the cliff. From the GAO testimony:

 Regulators plan to assess compliance but have not fully developed plans for the extent of future oversight…they had not determined what changes would be made to guidance or to the extent and frequency of examinations. Moreover, regulators with whom we spoke expressed uncertainty about how their organizations would interact and share responsibility with the newly created CFPB (Consumer Financial Protection Bureau) regarding oversight of mortgage servicing activities.

 CFPB staff members say that mortgage oversight will be a priority, but “as of April 2011, CFPB’s oversight plans had not been finalized.”

Some academics and industry insiders want national servicing standards established to that would require mortgage servicers to 1) sign statements that their mortgages met legal requirements and 2) commit them to try to modify loans before foreclosing, according to the GAO. But, guess what?

“The content of such standards and how they would be implemented is yet to be determined.”

The Conumer Financial Protection Bureau has until 2013 to issue mortgage servicing rules. That’s a long time to wait for something that should already be done.

Maybe next time we should do things in reverse. Don’t reward the crooked banks and financial firms who drove the country to the edge.

Work, instead, on fixing that damned cliff itself.

In other words, thank you George W. Bush for this particular mess.

His proposals to charge ahead with freeway creation and expansion all over the state never did make much economic sense — hey, gov, the economy will not be helped if trucks can get between cities on new freeways, but break their axles on ruined local roads — but they seem less and less reasonable when the federal highway trust fund is considered. Congress just can’t get a deal done on funding, which means that state taxpayers may end up funding more of the road binge than Walker and his gang are letting on.

From the Wall Street Journal:

WASHINGTON—A six-year $556 billion highway and transit construction program proposed by President Barack Obama is the latest casualty of Washington’s spending stalemate.

Sen. Barbara Boxer (D., Calif.), who is leading talks on the issue, said Wednesday she is now considering a two-year measure that would freeze federal spending on road, bridge and transit projects at existing levels.

The White House had called for a six-year infrastructure bill in his fiscal 2012 budget in part as a measure to create jobs and boost the economy. But lawmakers haven’t agreed on how to pay for the bill, amid a broader debate over how to slash federal spending.

Ms. Boxer, the chairwoman of the Senate Environment and Public Works Committee, said “funding challenges” could require a two-year, $109 billion bill setting funding at existing levels plus inflation. The bulk, if not all, of the funding for such a bill would come from the federal gasoline tax. Lawmakers would still need to plug a $12 billion shortfall under that bill, because gas-tax revenue is falling.

The meeting at the Wauwatosa Public Library ended early. This photo is by Steve Brachman.

But, hey, they’re trying to screw you in Washington, too.

The House and Senate this week agreed to a continuing resolution that will keep the government chugging along for a whopping two weeks. The fight ain’t over yet, though.

The House, keen to cut programs that benefit anyone making less than a zillion dollars a year, is pushing for a $61 billion cut in discretionary funding, according to The Economist.

According to The Center on Budget and Policy Priorities:

Some 157,000 at-risk children up to age 5 could lose education, health, nutrition, and other services under Head Start, while funds for Pell Grants that help students go to college would fall by nearly 25 percent, under a bill passed by the House that would cut current-year non-security discretionary funding by an average of 14.3 percent.  The bill (H.R.1), which would fund the government for the rest of fiscal year 2011, now must be considered by the Senate. 

H.R. 1 also would kill a program that helps low-income families weatherize their homes and permanently reduce their home energy bills, cut federal funds for employment and training services for jobless workers and for clean water and safe drinking water by more than half, and raise the risk that the WIC nutrition program may not be able to serve all eligible low-income women, infants, and children under age 5.  In addition, it would cut funds for the Centers for Disease Control and Prevention by 10 percent, for the Food and Drug Administration by 10 percent, and for the Food Safety and Inspection Service by 9 percent.

Wisconsin, according to CBPP, would stand to lose $30 million in education funding — in this fiscal year!

According to CBPP:

At the same time, H.R. 1 would increase overall funding for security programs (those funded by the Defense, Homeland Security, and Military Construction-Veterans Affairs appropriation bills) by a little less than 1 percent.

Also, the 14.3 percent figure is a bit deceiving.  To achieve that level of overall cuts for non-security programs for the entirety of 2011, funding for those programs will have to fall on average by nearly one-fourth over the seven remaining months of the fiscal year.  This could make it even harder for some agencies to maintain important activities than the 14.3 percent figure for all of 2011 suggests.

The House, by the way, would not fully share the sacrifice it would impose on others, as its own budget would decline by a mere 6%.

There is not many surprised on who voted how on this bill:

Yea    WI-1    Ryan, Paul [R]
Nay    WI-2    Baldwin, Tammy [D]
Nay    WI-3    Kind, Ronald [D]
Nay    WI-4    Moore, Gwen [D]
Yea    WI-5    Sensenbrenner, F. [R]
Yea    WI-6    Petri, Thomas [R]
Yea    WI-7    Duffy, Sean [R]
Yea    WI-8    Ribble, Reid [R]

There you have it. Something besides Scott Walker to think about.

Reporter Cecelia King emphasizes the social media / privacy / corporate aspect of the committee’s future work, but given the Obama administration’s not-so-good track record on Internet / constitutional issues, the committee could well end up trodding merrily across the Constitution in civil rights tracking cleats. Law enforcement and domestic spooks will be well-represented on the committee. From the Post posting:

A blog post last Sunday on the National Science and Technology Council Web site said the subcommittee will include members of several federal agencies, such as the Commerce, Justice, Homeland Security and State departments. Cameron Kerry, general counsel at the Commerce Department, and Christopher Schroeder, assistant attorney general at the Justice Department, will head the group.

Representatives of the Federal Trade Commission and Federal Communications Commission were also invited. And the White House will have representatives from its Domestic Policy Council, National Economic Council, U.S. Trade Representative office and National Security Staff Cybersecurity Directorate.

“In this digital age, a thriving and dynamic economy requires Internet policies that promote innovation domestically and globally while ensuring strong and sensible protections of individuals’ private information and the ability of governments to meet their obligations to protect public safety,” Kerry and Schroeder wrote in the NSTC blog post.

Mr. President, sir. If you do the latter, then the former win. You might as well turn over the keys to the country right now.

One of the administration’s latest assaults on civil liberties occurred, last week, when it argued in federal court (again) that people illegally spied upon by the federal government should not be allowed to seek redress in court because oh my gosh, there are state secrets involved! The brief was filed in response to an Electronic Frontier Foundation lawsuit challenging the government’s electronic spying program.

That’s a tune we should be familiar with by now. The government acts in a wholly illegal manner, then invokes national security to protect its spymasters and bureaucrats. From the government’s brief:

As the Director of National Intelligence (DNI) explained in his declaration asserting the state secrets privilege, the privilege extends to key evidence implicated by plaintiffs’ claims, such as whether plaintiffs themselves had been subjected to any surveillance of the type alleged in their complaints. Confirmation or denial of such claims would cause exceptionally grave harm to national security.

That argument is a head-spinner on its own merit, but the government has another layer of craziness that should propel the collective national noggin around a few more times on its axis. The feds argue that citizens should not use the courts to make the federal government obey the law.

Plaintiffs’ claims here fail to satisfy the requirements of prudential standing because they assert a generalized grievance concerning intelligence policy that is better suited to resolution by the political branches, in light of the extremely sensitive national security concerns at stake and the paramount need for secrecy.

So there you have it: the Obama administration believes in the constitution — except for those pesky parts about jury trials in civil cases, judicial authority and unreasonable search and seizure. Oh, yeah, and that separation of powers thing the framers were so careful to construct.

The Obama administration defending bad conduct with bad arguments that will be misused for decades. We will regret it.

Chipping children so they can be tracked electronically seems like a pretty good answer.

The George Miller III Head Start program in Richmond, California, is putting radio frequency identification chips in kids’ jerseys so that accurate Head Start statistics can be reported to the feds. (Head Start is a federal early childhood program.)

Wow, that seems like a pretty weak reason for taking such an invasive action. The Electronic Frontier Foundation and the American Civil Liberties Union, in a letter to federal and local officials, raised some major concerns.

We have seen time and time again that RFID systems can be insecure, such as when the RFID chips in U.S. Passport cards were cracked and copied last year from a distance of 30 feet using just $250 worth of parts.⁴ The Real Time Location Service (RTLS) Active RFID chips embedded in these preschoolers’ jerseys can be read from up to 300 feet away.³ Children wearing these powerful tracking devices in school, on the playground, and off campus during field trips may be more vulnerable to stalking and kidnapping. If this system is insecure, someone could sit in a car the length of a football field away and track the children without anyone ever knowing that any information had been read. Once read, that information could then be copied to a duplicate chip — allowing someone to take a child off campus while RFID readers potentially show the child is still safely in school.

Nor does a child have to face stalking or abduction to be endangered by RFID tracking data. These RFID chips provide constant monitoring, potentially creating a detailed portrait of a child’s movements that could loom large over a youngster’s life, particularly if the chips replace direct adult monitoring and judgment. If RFID records show a child moving around a lot, might she be tagged as hyperactive? How long could this data — and the conclusions rightly or wrongly drawn from it — be stored in school records? Might the records be subpoenaed for use in family court or a custody battle?

The folks in Richmond and in the federal government need to rethink this one. Tracking children to enhance record-keeping is the very top of a very steep and slipper slope that we won’t want to go sliding down.

So be afraid, be very afraid, about what our national security apparatus is up to these days. When you have too many law enforcement types chasing too few bad guys, as the US government does now, you are going to end up with bored or corrupt federal agents going after the wrong people through ineptitude, spite or ideology.

Scarier yet: first the Bush administration, then the Obama administration, knocked down rules and the rule of law to give this overpopulated policing world more power and the policed world far less protection from its protectors.

Fareed Zakaria, writing in Newsweek, laid out some details: