Looking Ahead

LOOKING AHEAD by Wally Dobelis

Thinking about stimulus and bailout is a stepwise process. A week ago the $75B mortgage protection plan came out. Working people whose houses are “under water” (worth less than the mortgage) and who spend more than a prudent percentage of income on housing can have their interest and sometimes the principal reduced to a bearable amount. Speculators will not benefit , but the regulators must watch out for properties in suburbs that sprung up overnight, involving reckless purchasers, wash sales, cheating realtors, walkaway straw buyers and artificially boosted prices, accepted by bonus-bribed underwriting managers at fast-growth WaMu, Wachovia, Golden West and similar unscrupulous fast-growth firms.

The marketplace did not like the taxpayer-supported bailout for 9M mortgages. Jimmy Diamond of Chase approved of the new mortgages aspect but wanted everyone to understand that basics of business should not change. You are responsible for what you bought, unless cheated. Exuberance does not count. Pay your debts, and suffer. All of us Adam Smith people agreed.

So why should this breach of basic rules of economics happen? Well, risk analysis, a new discipline, comes in. You do it for the greater good. If the government forces banks to accept the unwarranted loss, it is for their own good. Foreclosing and auctioning off the severely underwater buyers’ homes will depress the area real estate values more, and more owners will “short-sell” (below mortgage) and move out, depressing comparable property prices and snowballing to more short sales and foreclosures, and lose more. Imagine, if in your coop an owner is forced to sell way below market value, what that will do to your property? It seems preferable to accept the stabilizing effort on some properties and protect the area, the state and the nation from a truly snowballing price drop. The plan envisions refinancing five million under-water mortgages through Fannie May and Freddie Mac, who back some two-thirds of the nations’ homes. There are incentives for banks to lower mortgage payments for subprime borrowers to 38% of income, or if the bank is willing, to 33%, the government matching the difference, and for actually modifying loans (Treasury guidelines are coming). Loan servicers can earn d incentives for loans remaining current for three years, up to $1,000, likewise borrowers can earn annual principal deductions of $1,000 for being on time, to five years.

As a nation, we have some 75M households owning homes, of which 16 %, or 12M. or 1 in 6, are under water, as compared to 4% in 2006 and 6% in 2007, Of new buyers in past 5 years, 29% are underwater. Some 64M homes have equity, including 24M owned free and clear. New York and Atlanta real estate purchases have lost under 10% of value since peak, Boston slightly more, with 10-20% of those bought in 2004 and later under water. San Diego, Las Vegas, Los Angeles, Phoenix, Miami, S.F. and Washington are in the 20-33% value loss area, and have under 44% of the 5 year and later purchases valued below mortgage (50% plus in San Diego and Las Vegas). In metropolitan areas, neighborhoods with short travel to work are holding up better than commutes.

National statistics show that home prices peaked in mid-2006 after rising 86% since January 2000, according to the First American index. Since peaking, that index has fallen 13%. The declines have made homes more affordable, bringing prices in many areas closer to their long-term relationship to incomes. In the second quarter 2008, the median home price of about $203,000 was 1.9 times average pretax household income, according to Economy.com. That was close to 1.87 times income for 1985 through 2000, prior to the housing boom.

The stock market slump, driven by bank share values radically decreasing, is due to the additional burden imposed by the homeowner stability effort on bank recovery. This brings up the previously unspeakable suggestion of nationalizing the most affected giant banks, by buying up the shares, and reselling them back, after recovery. This was the Swedish model of recovery some time ago. The US banks most affected seem to be Bank of America and Citigroup. It is hard to imagine the latter, the creation of bailout expert Sanford Weill, going under. Weill in 1962 started as a broker in Carter, Berlind, Weill and acquired Shearson Hayden and Loeb Rhodes, which he sold to AmEx. Not succeeding in taking AmEx over, he bought Commercial Credit from Control Data, and added insurers Primerica, the peculiar A. L. Williams Co., huge Travelers Insurance and the property/casualty arm of Aetna Life & Casualty. He also acquired brokers, Smith Barney, Shearson (again), part of Drexel Burnham Lambert, and Salomon Brothers. In 1998 his Travelers Group merged with the huge bank, Citicorp, founded in 1812. The company expanded after overturn of the limiting Glass-Steagall Act, but during the 2002 economic downturn Weill was replaced, cashing in $300M worth of shares. So there.

WD thanks AP, WSJ, Moody’s Economy.com, First American CoreLogic Index and Internet news sources.

LOOKING AHEAD by Wally Dobelis


Looking at the first weeks of President Barak Obama’s reign in Washington, one is overwhelmed with the magnitude of the economic problems, which have been given first priority. Foreign affairs, Secretary of State Hillary Clinton’s province, had faded in the background, until her current trip to the Far East. It may be of value to review the many crises, and try to classify them as low-boil persistent, vs. action-demanding or acute.

To start, we should accept the facts that the growth of international crises is a function of population growth in the underdeveloped continents and the consequent competition for resources, and therefore crises will continue. Meanwhile, the risk of international world-war type conflicts is a function of multinational and interdependent economic activity and therefore is receding. Irregularity is added by religious/ideology driven activities, characterized by the use of suicide terrorists. The best hope for a leveling off of crises is growth of women’s suffrage world-wide. That in a nutshell is my theory for the continued future of the world as we know it.

Meanwhile, to review. Afghanistan is a sinkhole, and the festering crisis is looming larger, with the Sunni Taliban gaining strength. Ambassador Richard Holbrooke and President Barak Obama are working on redefining our mission. The supply routes for the 30,000 American and NATO forces are threatened, with the blowing up of a major bridge in the Pakistan border and the closing of the American military air supply base in Kyrgyzstan, with President Kurmanbek Bakiev declaring the compensation to be inadequate, after talks with the Russian President Dimitri Medvedev, who granted the Kyrgyzs a $2B loan and forgave a $180M debts and other benefits totaling $330. This is a ploy for negotiations aimed to stop the nuclear defense bases US is building in Poland and the Czech Republic. We seem to have offered, smartly, to play along, if Russia helps with removing Iran’s nuke threat.


Pakistan is acute and very significant, as a base for the Talibans, with a nuclear bomb and an unstable government, led by Benazir Bhutto’s widower, Asif Ali Zardari, who favors us but has a complex constituency. In the Northwest the Taliban presence and attacks on federal police provide a constant threat to the national government, and the American drones systematically attacking Taliban houses are transgressions of international law that the government will protest against but may actually secretly favor. To keep internal peace and prove its independence of Americans, Pakistan has released from house arrest their nationally revered physicist Abdul Quader Khan, father of their nuclear bomb, who sold it secrets to Iran, North Korea and Libya, and who promises to work in education. Khan is not a real threat and may actually become available as an information source, but there is worse, Pakistan has also approved a sharia law presence in Taliban-ruled Swat Valley, a major takeover threat. Meanwhile , festering North Korea, Khan’s major client, has once more intimidated the world with a potential attack on its southern neighbor, in hopes of exacting money from its economically hard-pressed benefactors, US, Japan and China, hence Clinton’s mission.

Iran, another Khan client, wants the new US government to fess up to past misdeeds and to the burning of bridges to peace (true, Bush rejected their offers in 2003), before starting new negotiations. There’s some hope, although the Persian Iran’s backing of Hezbollah and support of the Sunni Hamas via client Syria will get in the way. It may be more acute, with the new government in Israel, and the international fear that Iran’s development of nuclear bomb will start a counter-wave in the Sunni Maghreb and Arab League countries.

In festering Israel the aspects for peace and a two-state solution are dim, although ex-President Jimmy Carter holds out hope. The vote was split between Likud’s Bibi Netanyahu and Kadema’s Tzipi Livni, and the their potential coalition partners, the religious right and secular right and left are incompatible to each other. A Netanyahu/Livni coalition is still in the air – near-impossible, when one rejects and the other favors the two-state solution. The Gaza destruction seems to have impressed the badly hurt Palestinians, with Hamas actually holding out hope for a cease fire, if borders are opened for traffic. The Arab League, whose 22 members have not liked Hamas’s declared intent of wiping out Israel, has had some impact. Egypt and Jordan, whose governments have been actually threatened by the Palestinian holdouts, may succeed in containing the violence. George Mitchell will keep trying.

Iraq is in slow-motion, waiting for US withdrawal to break out in civil wars (at least two). President Obama and Gen. Petraeus, both scholars, should find a common ground.

If you want to see more festering areas, there’s Darfur, Congo, Sri Lanka, incapable –of-controlling crime Mexico and the Hugo Chavez dominion. Venezuela has accepted his second bid for permanent presidency. He has narco-Bolivia, Ecuador, Nicaragua and Cuba in his tow (he also loves Hezbollah and Carlos the Jackal). Too bad Gov. William Richardson is out as our Latin intermediary. Where are our old negotiators of talent and prestige, such as Strobe Talbott, Richard Armitage?

Washington to copy.

LOOKING AHEAD by Wally Dobelis

In memoriam Evelyn Strouse

We are sad to relate of the death of Evelyn T. Strouse, , on January 15, 2009, in Oakland CA, at the age of 92. A pioneer in neighborhood preservation, she was the chair of the Union Square Community Coalition,1981-2002, and a member of Community Board 5 during the same period, chairing the Youth and Education committee and participating in the Parks, Land Use and Zoning and Transportaion and Environment committees. She was a poet, and one of Mayor Koch’s answerers of letters from the public, sometimes in rhyme. In 2002 she retired, to join her daughter Dr. Jane Ariel, in California, missing the ceremony of the 2002 Grassroots Preservation Award presentation, an honor awarded to her by the Historic Districts Council. Any condolences to the family may be addressed to Dr. Ariel, 3164 Sheffield Ave, Oakland, CA, 94602. The family suggests that any contributions in Evelyn’s memory be made to Union Square Community Coalition, Inc., P. O. Box 71, New York NY 10276, a 501(c)(3) organization.

Below is a slightly updated tribute to Evelyn by this author, originally published in the Looking Ahead column in March 1996, that may give you an insight to this remarkable lady and her USCC, and the early preservationists of Union Square.

Happy 80th Birthday, Evelyn Strouse!
There is a tiny lady with a strong deep voice who looks after Union Square, keeps nightclubs at bay, watches over the Greenmarket and helps poor kids get scholarships. That dynamic person, Evelyn Strouse, will be 80 years old on Wednesday March 27, 1996, and we all want her to keep going to at least 120, we need her.Evelyn is a Smith grad who studied comparative literature at NYU until her first child was born. A Scarsdale mother of three - a lawyer, a farmer and a psychotherapist - she became involved in the 1972 McGovern campaign and Vietnam protest, lived in Israel for seven years, and, upon return to NYC, in 1981 joined the Union Square Community Coalition. She has been the chair of the USCC since the untimely death of her co-chairman in 1991.The Union Square Community Coalition was organized in 1980 by local residents, (such names as Karl Rosenberg, Phyllis Andrews, Marjorie Berk, Verneta Berks and Barry Benepe are mentioned), initially headed by Rosenberg and subsequently co-chaired by the late graphic designer Oliver Johnston and Evelyn Strouse.The USCC's mission was to reverse the deterioration of the Union Square Park, one of the great open spaces in NYC, by fostering reconstruction, maintaining greeen space, watching over proposed zoning changes and encroachments of tall buildings, and keeping members informed of impending dangers. It is a membership organization, and depends on dues and rare foundation grants. The Park was in terrible shape in 1980. Full of drug dealers and the gutter people that they attract, it was a blight. USCC rallied the neighborhood together, proposed reconstruction (plans developed by Rosenberg, Benepe and Richard Sonder) and policing. After years of effort the city allocated the millions of dollars required to bring this, the only remaining park from the grand plan of 1812, back to life.

The 1987 plan was supervised by Parks Department architect Bronson Binger, the landscape architecture was done by Taiwan-born architect Hui Mei Grove, subsequently briefly a Landmarks Preservation Commissioner.Being a community activist in an effort to preserve a neighborkood is a taxing task, and it is amazing that the initiatives are ever accomplished, in the face of the controversy. There are eight designated landmarks around the Union Square - the Lincoln Building at 1 Union Square West; the Metropolitan Bank (now Blue Water Grill); the Moorish Decker Building; the former Century Publishing (now Barnes and Noble) Building on 17th Street; the Everett (200 PAS) and Guardian Life (201 PAS, now W Hotel); the Century Association clubhouse (East 15th Street, next to the Lee Strassberg Theatre Institute where Marlon Brando learned a natural acting technique, rubbing his back against the door jamb), and the Union Square Savings Bank (now Daryl Roth Theatre).

Then there is the Ladies' Mile Historic District, starting its Southern boundary at 17th Street and Broadway, both NE and NW sides. Union Square is also the crossroads of Community Boards 2,3,5 and 6. While jurisdiction is not in dispute, cross-impact of decisions is far-reaching. And the night clubs - the late unlamented Underground at 860 Broadway (subsequently Herman's Sporting Goods, then Petco), the relatively controlled Paramount (now gone), and the threat of the House of Blues (gone).

Reconciling the various interests sometimes is impossible, but Evelyn tried.Some of the groups that USCC contends and cooperates with are the 14th Street BID/LDC (now Partnership), whose purpose is area business development, and the Greenmarket, whose director and founder is Barry Benepe, an important constituent of the USCC. Evelyn’s personal projects in 1996 were Kids Who Can (art) and Friends House (AIDS), and Jack Taylor can recite even more. Arlene Harrison, another neighborhood dynamo, cosidered Evelyn her role model. Barry Benepe wondered where she gets her energy, "she moves like a youngster of 60."

Sit tibi terra levis.

LOOKING AHEAD by Wally Dobelis




The local preservationists, flush with success, with landmarking of the ConEd building, the former Bauman Brothers Department Store and Guardian Annex are expressing a renewed interest in obtaining the designation for the former Tammany Hall building, at 100 East 17th Street, on the southeast corner of Union Square and Park Avenue South. Busy at the task are the Municipal Arts Society, the Historic Districts Council, Union Square Community Coalition and several NYC Council, and NYS Assembly and Senate members, as reported by Jack Taylor of the USCC>It is an important former institutional building, once the headquarters of New York City's Democratic Party political machine. In the fall of 1927, the Society of Tammany sold its headquarters on East 14th Street and announced the construction of a new Tammany Hall. Plans for the new building were to be made public in January 1928. The building was to be a Colonial Revival structure built of red Harvard brick with granite trim (limestone was later substituted). The Real Estate Record described the design as "a dignified architectural treatment, one of the chief motifs of which are the severe Colonial columns in the centers of the Union Square and the Seventeenth-street facades which recall the days of early American architecture."

The building, as completed in 1929, included commercial space facing Union Square (originally occupied by a branch of the Manufacturers Trust Company), a large public meeting hall on the east side of the first floor, offices for the Democratic County Committee, and a series of committee and meeting rooms. In 1943, the building was sold to the International Ladies Garment Workers Union; the main meeting hall, named Roosevelt Auditorium, became one of the most important centers for union activities in New York City. In 1984, the hall was renovated for use as an Off-Broadway theater (Roundtable, remember?). In 2001 it was sold to Liberty Theater, and is the home of Union Square Theatre. Another important tenant is the New York Academy of Film, whose Film School was founded in 1992.



Tammany Hall, originally Tammany Society, was the Democratic Party political structure that played a major role in controlling New York City's politics and helped the mostly immigrant working class New Yorkers (notably the Irish) rise in American politics, from 1790 on. Starting with the victory of Fernando Wood as Mayor in 1854, it controlled most Democratic nominations and patronage, until the election of Fiorello LaGuardia on a Fusion ticket of Republicans, reform -minded Democrats and Independents in 1934. Tammany Hall was permanently weakened, and, despite resurgence in the 1950s, with County Leader Carmine DeSapio, it ceased to exist in the 1960s, as the Reform Democrats took over. I wrote a catch-as-catch- can personal history of the Reform days, as a member of the late maverick Murray Hill Reform Democratic Club, helped along by the recollections of Charles Kinsolving, Lou Sepersky, Ken Mills, Bea Dolan, Maureen Lynch, Irene Shea, Carol Greitzer, Louise Dankberg and a hundred others whom you may recognize as the story moves along. The six articles, dated 2004 (actually published in 1996) can be found by googling Wally Dobelis & Tammany Hall.


Kinsolving dates the early start of reform to 1946, the beginning of the Mayoralty of William O'Dwyer, or, more likely, to 1949 when Lexington, the first Reform Democratic club, was organized. That was the year when Courtland Nichols ran for the Assembly with the aid of various mainstream Penn and Columbia Law graduates, and when Franklin Roosevelt was elected to Congress from the Upper West Side district of the late Sol Bloom, against the opposition of the regular old line Democratic organization. Reform grew stronger in 1951, when Vincent M.Impellitteri was Mayor and Carmine DeSapio chaired the New York County Democratic organization. The articles progress to the 1970s.



As for history of the various Tammany wigwams, the Tammany Society (named for a Lenape Indian chief) emerged as the center of the Democratic-Republican politics in the early 1800s.The first "wigwam" serving as its headquarters was on Spruce Street, where Pace University now stands, moving to Frankfort and Nassau Streets (now Brooklyn Bridge ramp) in 1812. It shifted uptown as the city grew and in 1868 the Hall (now torn down) was on East 14th Street, west of 3rd Avenue. In 1943, as Tammany lost power, and the party offices were moved to a modest uptown environment, as the NY County Democrat headquarters, the 17th Street Hall was sold to the ILGWU, Local 91, and its Roosevelt Auditorium served as a meeting space for union events. Particularly memorable for us locals were the newspaper deliverers' annual elections, with the entire block filled with union members, as though for a party, the campaigning officials' vehicles serving as bars and election quarters.



So much history revolves around the old Tammany Hall that it richly deserves to be designated as a landmark.