Angelo Mozilo

The Los Angeles Times dug up a story that we at the Wonk Room think is worth highlighting for our readers about Countrywide Financial CEO, Angelo Mozilo. Making the classic email blunder, Mozilo accidentally hit reply instead of forward in response to a message sent by a Countrywide customer seeking adjustment in the terms of his mortgage. Mozilo replied to the customer by saying:

This is unbelievable [...] Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting.

Dan Bailey, the homeowner who sent the email to Mozilo, didn’t take this response sitting down. Bailey posted Mozilo’s reply, which was reportedly intended as a forwarded to a Countrywide colleague rather than an email to Bailey, on the site that provided Bailey with the email template. He then had this to say:

To have received the e-mail that I did, stating by one of your employees, that what I did was ‘disgusting’ and ‘unbelievable’ has been just about the final straw. I am trying to do the right thing, I am trying with every ounce of what I have left in me not to blow my brains out over losing the home I have been in for 16 years. The only hope I had left was that perhaps the countrywide company did want to help the people it is servicing [...] then I receive that response to my letter. Just great. Now I know, that it is all a nice fat laughing matter to those who are supposed to help.

Mozilo, who collected $132 million in earnings last year amidst a tumbling mortgage market, thousands of monthly foreclosures and record low home prices, apparently sees websites like loansafe.org, whose mission is to offer “free foreclosure help that is based on a support community” as a personal annoyance, rather than a tool to help struggling homeowners. It’s not like Mozilo is offering any alternative, however — the Wonk Room’s examination of Countrywide’s site reveals a glaring lack of advice, or even a system, for borrowers looking to adjust the terms of their loans. It’s too bad that President Bush’s belief is that lenders should work voluntarily with homeowners, because with attitudes like Mozilo’s, it’ll be a while before we see relief to this crisis.

If Mozilo has such a visceral reaction to emails like Bailey’s, then we’d love to see how he’d react to something that is actually “unbelievable” or “disgusting” — like hearing his home was being seized by the bank.

Today, the Center for American Progress released a report by Senior Fellow Scott Lilly explaining how the weak US dollar effects the things on the minds of middle class Americans — rising gasoline, food, heating and electricity prices. The US dollar, whose value has dropped by 37 percent against the euro, 31 percent against the Canadian dollar and 17 percent against the British pound since 2000, has plummeted most dramatically in the last 18 months.

CAP’s report shows that, although a variety of factors influence the price of oil, including growing global demand and the so-called “security premium,” over half of the increased price American consumers are paying for oil is attributable to the weak dollar.

– As the dollar falls against the euro and other major currencies, oil-exporting states have been demanding more dollars per barrels of oil to protect their ability to meet expenses paid in euros and other currencies.

– Global institutional investors have tried to protect themselves against further declines in the dollar by moving money into commodity future that are denominated in dollars so that their investments remain stable when the dollar falls. The increased demand for these commodities artificially pushes up prices.

But why is the dollar so devalued? CAP’s report traces the bulk of the dollar’s decline to seven recent cuts in the Federal Funds Rate over the past nine months by the Federal Reserve. The lower the interest paid on a currency, the less likely foreign investors will will be to invest in instruments denominated in that currency, and the more likely U.S. investors will want to search for better returns overseas.

What’s most interesting is that under a devalued currency, oil companies stand to gain significantly in comparison to other businesses. Denominated in dollars, energy companies increase in value proportionately to the dollar’s decline. Exxon Mobil, for example, one of the nation’s largest oil companies, has seen its share price increase in precise parallel to the appreciation in the price of a barrel of crude oil. The government’s monetary policy, along with the weak dollar, not only create winners and losers in terms of consumers and businesses, but also benefit certain businesses far more than others.

Read the full report.

In an appearance on CNN’s Late Edition this weekend, Sen. John McCain’s (R-AZ) top economic adviser Douglas Holtz-Eakin dug into Sen. Barack Obama’s (D-IL) spending plan, claiming it would expand deficits:

Senator Obama’s plan is Washington in action. It’s $2 trillion more spending by the federal government. You have to pay for that somehow or you are George Bush III.

Watch it:

Earth to Holtz-Eakin: McCain’s proposed Bush-style tax cuts for corporations and the super-rich are far more fiscally reckless than anything proposed by either Democratic candidate. McCain’s plan would effectively double Bush’s tax cuts and create the largest deficits in 25 years and the largest debt since World War 2. As the New York Times wrote:

Fiscal monitors…estimate that, even taking into account that there are some differences between the proposals by Senators Hillary Rodham Clinton and Barack Obama, the impact of either on the deficit would be less than one-third that of the McCain plan.

Holtz-Eakin would have a leg to stand on if McCain had given any credible explanation of which programs he’d slash to balance his budget.

But he hasn’t.

The FactChecker at the Washington Post gave McCain’s plan to pay for his doubling of the Bush tax cuts by eliminating $100 billion in earmarks “Four Pinocchios” (the highest rating for deceit), calling it “largely fantasy” and “voodoo economics.”

So, in this case, we agree with Holtz-Eakin. Senator McCain, “you have to pay for that somehow or you are George Bush III.”