A Fighting Chance

“This is really amazing,” I said to Bruce. “I can’t wait to meet the Treasury people, to talk about how they plan to use the money. Maybe I should cancel office hours tomorrow and fly to Washington.” I was revved up and ready to go; it felt good to think about helping out.

Bruce was Bruce—happy that I was excited, but a lot calmer than I was. “I haven’t read anything in the paper about a cop.” (Bruce is a traditional guy; he still gets his news from old-fashioned printed newspapers.) “What exactly will you be doing, babe?”

I paused. “Oh. Well. Hmmm. I haven’t seen anything about a cop either, but I guess I’ll get to do cop stuff. You know, check out how things are working, investigate, and tell them if things are wrong. At least I think so.” It occurred to me that Senator Reid hadn’t said exactly what my role would be, so I didn’t have a clue.

It was after midnight when we hung up and I pulled out my laptop. I located the law authorizing the gigantic fund that would go to the Treasury Department to deal with the country’s “troubled assets.” Eventually I found the section dealing with COP. My optimism about how I could help sank a little.

The new law spelled out how a five-member panel would be chosen, how we’d get paid, and how expenses would be reimbursed. But the section describing the duties of COP had essentially one entry: “Submit reports.” COP was supposed to give Congress a report every thirty days. That was pretty much it. Huh: no arrests, no handcuffs, no perp walks.

And what tools would we be given so that we could oversee the distribution of all that money? The statute said we could “take testimony,” but the lawyer in me instantly noticed that COP would have no subpoena powers. We could politely invite people to testify … and they could politely decline. (Or impolitely, if they preferred.) We could also ask agencies for “official data,” and the agencies “shall furnish it.” But if we wanted something the agencies deemed “unofficial,” well, we could be out of luck.

Okay, so our authorities were limited. No ability to subpoena witnesses. No power to blow a whistle to stop the flow of money if we thought something shady was going on. And there was no requirement that the secretary of the Treasury explain his strategy to us.

Nope, none of that. It looked like the law setting up COP envisioned that its role would be to write boring reports that would gather dust while the economy tumbled over a cliff. In other words, this new adventure in Washington might not be nearly as productive as I had hoped.

But when Harry Reid had asked, I’d said yes—so I was going, like it or not.

How a Downturn Becomes a Meltdown

Whenever I think of the meltdown, I still think of Flora. (I’ve changed her name to protect her privacy.) She was probably in her eighties by the time we spoke with her in 2007 while conducting interviews for more bankruptcy research. She explained that she and her husband had retired and moved to a small town in the South a few decades earlier to be near family. They bought a modest house. (“That’s all we needed.”) Flora’s husband had passed on, and she was on her own now. Flora said that until recently she had been doing fine, getting by on her Social Security check each month.

Flora explained that she’d gotten a call a few years ago from “a nice man from the bank.” She said he’d told her that because interest rates were low, he could give her a mortgage with a lower payment. She’d asked him what would happen to the payment if interest rates went back up. According to Flora, he’d assured her that “the banks know about these things in advance” and that he would “call her and put her back in her old mortgage.”

She had taken the deal, and before long, her payments had shot up. She paused, then said quietly, “He never called.” The new monthly payment swallowed nearly every penny of her Social Security check. She had tried delaying her payments, borrowing on credit cards, going to a payday lender, but it had all come crashing down.

The Bankruptcy Project, which my co-researchers and I had developed to find out more about families who filed for bankruptcy after the laws were changed, had promised her $50 in return for participating in an hour-long interview. She knew we planned to send the money to the address she’d given us and understood that it would take a few weeks. She explained that next week she would have to leave her home.

“I’ll be living in my car,” she said, “at least for a while. I don’t know how I’ll get mail, so can you tell me how to get my fifty-dollar check? I really need it.”