Hey y’all,
It’s Thursday night for me, and I am at the hospital. My grandmother’s friend Shirley – which if you read my piece a couple weeks ago on the need for elder care at 100 Days in Appalachia – you’ll know is my grandmother’s friend. She’s a sweet woman. I pray she is okay. She is stable, so hopefully this will be a short stay indeed.
This week has been stressful, no doubt. But, thinking about stressful jobs I’ve had before – you’ll read a little about that later on – I am reminded that I am truly blessed. I get paid to write, something I love to do and am good at. How cool is that? How rare is that? I think it’s important for those of us who get paid to do something we love to acknowledge that we are breathing rarified air.
If you want to continue helping me get paid to do what I love, you can become a Patron for as little as $3 a month, make a one-time donation using PayPal, or buy me a book to help with my research. All contributions are greatly appreciated, no matter how big or how small. None are expected, though. This newsletter is and will remain free.
With that said, let’s talk about the administrative state and the mortgage industry! I promise this is more interesting than it sounds. Stop looking at me that way. It is, I swear.
On “Democracy of Dollars”…
Recently, I had the privilege of interviewing Richard Jacobs about his latest book, “Democracy of Dollars.” In it, Jacobs – an attorney with more than sixty years’ experiencing practicing law – explains what he sees as our judicial branch’s abdication of its constitutional duty and the dangers of a Congress that continues delegating its constitutional responsibilities to the administrative state. Though technically in the executive branch, Jacobs calls the administrative state our “fourth branch of government” and laments how unaccountable this federal bureaucracy is – as well as how it functions as a means for industry lobbyists to regulate themselves.
This interview is edited for length and clarity.
Skylar Baker-Jordan: The central premise of “Democracy of Dollars” is that money has corrupted our government. In the shortest possible answer, how do we fix that
Richard Jacobs: The problem with a solution is that the members of Congress who benefit not only from campaign contributions, but also lobbying jobs after they leave Congress [50% become lobbyists] is, as I write in “Democracy of Dollars,” like telling Farmer Brown’s hens threatened by the fox to go to the fox for protection. Money is the fox in Congress’s henhouse, and Congress won’t fix it.
The Court has made the blunder of deciding that money is free speech. I am sure that was never contemplated by the Founders, who didn’t even contemplate political parties. Thus, there is no quick fix. The people have to have the tenacity to press the issue over a long period of time until change is made. This will not be easy, but never has a significant change ever been easy.
SBJ: Another major point you make is that all three branches of government, but perhaps especially the judicial branch, have strayed too far from the Constitution and rely too much on rules made by judges and the administrative state, which you call “the fourth branch of government.” Can you give us an example of where this has happened and why it is bad for the American people?
RJ: What has happened is that the Court has deferred to the executive branch and the fourth branch, the administrative agencies, is run by the executive branch. So instead of Congress making laws that are debated and negotiated, the administrative agencies – run by political appointees of the president – make the rules, interpret the rules and enforce the rules. Lobbyists provide a great deal of pressure on the agencies and frequently write the rules for industries or companies they represent. The people have no practical voice in the matter, which is why I say our democracy goes to the highest bidder.
SBJ: Reading the book, I was struck by your description of the “fourth branch of government,” as it had echoes of Trump’s “deep state” without all the conspiratorial nonsense attached. I think a lot of people (like me) on the left were dismissive of Trump’s claims about a “deep state,” but you make a cogent and compelling case that one does, in fact, exist. Was Donald Trump right, at least about this?
RJ: Trump was correct in identifying that there is a shadow government. Trump aroused support by claiming he’d attack the shadow government, bring our government back into the open. However, as I point out in “Democracy of Dollars,” he did not walk the talk. He hired more lobbyists than Bush and Obama did in total. He gerrymandered the government ethics rules for government executives to give them great freedom to work for the companies they regulated when their government days were over, while claiming falsely he tightened the rules.
Folks who have been headline readers and have not gone into the depth of what was done, think Trump really was pursuing the shadow government – that he was standing up to it. In reality he bought into it, used it, increased it and made it worse. An example in “Democracy of Dollars” is… where a simple phone call from the NRA president to Trump got Trump to drop gun control legislation support. If you look into Biden’s legislation, you will see similar issues of great public infrastructure laws having benefits carved out to serve lobbyists – like not getting drug pricing controls.
SBJ: I think there is an undeniable need for government agencies to be able to respond quickly to our needs whereas Congress moves even slower. Do you agree, and if so, do you think there might be value in adopting a British-style independent, nonpartisan, and crucially institutionalized Civil Service to execute and administer the law?
RJ: I haven’t studied the English system. Technically, our Civil Service Commission had something like that in mind – a non-political government at its essentials. But that isn’t how government works in practice.
George Washington, our Cincinnatus, did what presidents should do. A president must be a moral leader, a role model, a communicator of ideals in addition to action. Trump did not fit that requirement, and most of our recent presidents have come up short. But Trump is the worst since he ran the government like his tv show, creating chaos between his “guests,” which gets listeners but not results. What happens is that everyone then thinks they can do what their leaders does and so chaos in all aspects of our life worsen.
When a president uses the flexibility a chief executive has to further himself, not the public good, the people’s expectations are not met, and for that president, there is no wisdom in allowing presidential administration. Theoretically, by separating the government into three co-equal branches of government, there should be checks and balances. When Congress spends its time raising money to stay in office and push for one-party control, and won’t spend its time preparing and negotiating legislation for the public good, the system breaks down. When the Supreme Court says “it’s not our responsibility to bail the people out,” the system breaks down.
That is where we are. I was on a board of a public company where I and the rest of the board didn’t focus on our responsibility to rein in the CEO. The result was business failure, none years of litigation, and tremendous cost to everyone. And, in addition for me, great lessons learned.
We cannot have the umpire decide not to call the balls and strikes, and we can’t have Farmer Brown not looking after his chickens.
SBJ: You make the point that courts regularly find that citizens don’t have standing to challenge administrative state rules. What remedies do exist for citizens right now, and what remedies should exist but don’t?
RJ: The failure to give standing leaves the people without remedies when it comes to executive branch and legislative branch actions that thwart their rights. The examples I gave [in the book] about voting and the environment weren’t about administrative rules being attacked, but rather about unalienable rights [to voting, to life] being stripped from the people.
Technically, when it comes to administrative rules, the Administrative Procedure Act requires a hearing and publication in the federal register. However, except for industries that have the personnel and capacity to follow these matters, and to go to Washington for the hearings, there is no practical remedy. Furthermore, for the most part the rules were drafted with industry and lobbyist input.
People should become involved with organizations that support issues important to them. Support of good government starts locally. I am 90 and have stage IV cancer. But life is what it is. I am working with my law school to educate young lawyers who will be our future leaders. My wife and I just funded the start of a public interest law clinic for democracy and the environment. Each of us have different talents and abilities. Apply them locally for starters.
SBJ: Let’s talk about lobbyists. One of the biggest problems you highlight is the role of lobbyists in creating the rules which are meant to regulate the industries they represent. Short of deconstructing the administrative state, what can be done to fix this so that industries aren’t essentially regulating themselves at the expense of the American people?
RJ: This requires laws to be changed. Will Congress pass the laws, when lobbyists give them money and jobs?
I get a quarterly magazine, Influence. This magazine tells us who runs the government in Florida. A recent issue was devoted to “the 100 most influential people in Florida politics.” The web page says “every two years, $400 million is spent to elect our legislature and another $428 million is spent to influence them.” If it takes a political contribution of $100,000 to get an audience with an elected legislator or official, you can see how tough it is. In my work with Our Children’s Trust, we couldn’t get an audience with the appropriate state officials – until one decided to run for governor and thought our endorsement would be useful. We refused to endorse the official.
We are not educated in our school system to be citizens. We are educated to be consumers. I pine about what is happening to the underpins of our democracy. I worry about the health of our environment. None of those concerns will, in the short run, adversely affect smart phones, the web, the World Series, the Supper Bowl, consumerism or the car I buy.
The question is: how will we motivate people to be concerned, knowledgeable, and politically active citizens? That is what the Federalist Papers say we must expect from each other. My very personal take is that my generation messed up. We had the Depression, World War II, Korea and more. We also had a great period of recovery in the 1950s, 1960s, and much of the 1970s. But we didn’t see the warning signs coming and we didn’t do what we should have done when it comes to being good, participating citizens. Which is why I have now devoted a lot of money and time to set up systems to facilitate the education of future leaders.
SBJ: Do you think the Founders would be appalled by how rigidly we hold to “original intent” and a strict textual reading of the Constitution? Or is there any world in which strict constructionists are right?
RJ: There is no such thing as a strict constructionist. I think I point that out in the first three chapters, and in chapter eight. Remember, the disagreements about what the Constitution means started when Adams and Jefferson couldn’t agree. If they couldn’t agree, how can we be expected to be so much smarter?
I point that the Constitution was designed to be a statement of principles, not rules. Principles are meant to be applied to circumstances. As circumstances change, results have to change.
Take cruel and unusual punishment. When the Constitution was written, public whippings and public block and tackle were not cruel nor unusual. Would we want that today? Or take the right to bear arms. As I point out, should we really believe the Founders – as smart as they were – when they decided guns are okay would have come to the same conclusion had their weapons been other than front-loaded single shot muskets and pistols?
Or, take voting. Voting for president is not a Constitutional right. No place in the Constitution does it say the people have the right to elect the president. The Supreme Court affirmed that a few years ago in Bush v Gore, but hasn’t that voting – over 232 years – become engrained in the US as a fundamental right? Or what about the right to privacy? As I point out, the Constitution is silent. But is that not an engrained right deserving of Constitutional protections?
SBJ: One thing I admired about your work is that you took both sides to task, particularly in how they use the same rationale in different circumstances to further their own ends. If even the justices can’t see their own biases, how can we as citizens recognize when we are playing politics with the court?
RJ: If we aren’t educated, or don’t educate ourselves to be citizens, we won’t recognize the issues that are overwhelming us. Remember the story of the frog in boiling water? The fundamental problem is the way we make decisions. Will we cat for the common good? We learn to make common good political decisions when we act locally. In other books I have written, and in the work I am doing with my law school, I call it “dirty hands, wet feet” learning.
A democracy of the people is a bottom-up government. We have to interface with people of differing views, have discussions, be willing to listen, make compromises. That only occurs when we learn by doing and the theater for education is local. So, the process of righting our democracy is neither quick nor simple nor without effort and dedication. It would be nice if all of us would comply. But there has never been uniformity. Even during the Revolution, a third of the people – including Ben Franklin’s son – were pro-British. And another third didn’t care who won.
SBJ: Is America still a democracy or are we an oligarchy?
RJ: We are an oligarchy disguised as a democracy. Remember my concluding remarks about Schweitzer and jazz bands: our lives must be out statements. That is our legacy, and we each must pitch in and do what we can. That’s the jazz band whose music we will enjoy.
On mortgage industry layoffs…
“You’re a mean one, Mr. Garg.”
That’s what 900 employees no doubt saying about Vishal Garg, the CEO of mortgage company better.com, after he notified them on a Zoom call that they were being laid off.
To most people, laying off one person – let alone 900 – over a video conferencing app is as heartless as you can imagine. To do it so soon before Christmas is even more unconscionable. Yet I was completely unsurprised. Unfortunately, this kind of thing is all too common in the mortgage industry.
I spent most of the 2010s working in mortgages. It was never supposed to be that way, but fate had other ideas. After moving to Chicago in June 2011, I spent most of those first six weeks looking for a job. Finally, I saw a posting on Craigslist for a receptionist at a mortgage company called Guaranteed Rate, whose corporate headquarters were in a swanky loft in North Center.
It wasn’t much, but it paid $10 an hour – big money to me at that time – and had benefits, so I applied. A few days later, I heard from the HR representative. Having nothing really suitable for a corporate interview, I went to a thrift store on Milwaukee Avenue and bought a beige sport coat, a light pink dress shirt, and a teal tie.
What I thought was a receptionist gig turned out to be so much more. They were hiring assistants, and I was given the choice between sales and underwriting. The word “commissions” scared me – although knowing what I know now I wish it hadn’t – and while I didn’t know what “underwriting” was, it had the word “writing” in it.
So, I became an “underwriting liaison.” Then, a few weeks later, a junior underwriter. Then I moved to processing for more money.
At the time, Guaranteed Rate billed itself as a “America’s fastest growing mortgage company.” I have no reason to disbelieve that claim. They truly were expanding at an incredible rate during my time there, and working at corporate was exhilarating and even thrilling. There truly was a feeling of limitless potential. That first Friday was “operations appreciation day,” and halfway through the afternoon we all quit working and went down to the courtyard to get rip roaring drunk. I met a boy and took him home.
What I remember most about my time at Guaranteed Rate is the friends I made and the fun I had outside of work. It was almost like being in a fraternity or sorority in college; we seemed to do everything together. I saw colleagues on the weekend when we weren’t even working – just hanging out at bars. I dated guys who worked in other departments. I was young and hot and upwardly mobile.
It wasn’t all great, though. In fact, pretty early on I realized that it was going to be a lot more work than I had bargained for. I hadn’t been there a month when I found myself working my first weekend. I had been there less than a week when I got yelled at by my first loan officer – a reading for filth that would have made drag queens blush. I was humiliated.
He was far from the worst. The abuse heaped upon loan processors who could not perform to the incredibly – I would argue unreasonably – high expectations placed on them by sales and the c-suite more than once drove me to tears. At one point a loan officer belittled and demeaned me so badly I began uncontrollably weeping in the middle of our open office space and had to be comforted by my boss. But he was a top salesman in a company we had just acquired, and I was just a processor. Nothing changed.
After just over two years at Guaranteed Rate, I was laid off in the fall of 2013. Unlike the folks at Better.com, this did not come as a surprise to me. I had survived two rounds of layoffs already, but I strongly suspected I would not survive the third round of layoffs, which proved correct. And, it needs to be said, while I was good at my job I was far from a whiz and at that point I had a relatively small pipeline.
I am not here to say I was the best loan processor to ever live. That is definitely not true. Looking back, I think it was always clear to everyone that I was there for a paycheck and not much else – though in a capitalist economy I think that’s a good enough reason to be at a job. But I never had any complaints against me that I am aware of, no negative performance reviews, no write-ups, nothing. As far as I knew, my performance was at worst adequate.
Better.com just got an infusion of $750 million. Many of the employees who were laid off report recently receiving promotions and raises. They’re left grappling for answers as to why they were let go.
I sympathize. In the weeks after I was let go, I began thinking about “America’s fastest growing mortgage company.” If that was true – and again, I have no reason to believe it wasn’t – then why were they laying off staff?
By this point, I was processing exclusively for a couple loan officers in Massachusetts, though I still lived in Chicago. As such, I lost my spot at corporate and was working out of an office in River North. When I saw an HR rep there that day, I told the woman who sat next to me that I would not survive the morning. And I was right. She pulled me into a meeting, put my boss – in Boston – on speaker phone, and they delivered the bad news.
On the walk back to the El, a box of my things in my hands, I passed a building with Princess Peach painted on the side to where it looked like she was looking out of a window, trapped in a tower by Bowser. I tried to tell myself that I was Princess Peach, and the layoff was my liberation.
In some ways it was. Had I not been laid off, I never would have began writing again. But in other ways, it wasn’t. It took me another six years to finally quit the industry for good and focus on writing full-time. I was scared: scared to lose the security of a middle-class job with benefits. Scared to leave an industry I’d put so much blood and sweat and tears into. Scared the expertise I’d gained would be wasted.
But I should have realized that, for me, the industry was toxic. In the days and weeks after my layoff, I felt like I could breathe for the first time in years. I baked. I decorated. I wrote. “I’ve never seen you this happy,” a friend told me.
The mortgage industry is as ruthless as it is relentless. Some people thrive on this. I did not.
As a processor, I worked long hours – sometimes until 1:00 in the morning – for a measly salary of $40,000 a year plus a small per-file bonus. I was not paid overtime, but rather “flex pay” which I never had the opportunity to take advantage of. My understanding of “flex pay” was that I would work longer hours some weeks in exchange for working shorter hours other weeks – but again, I never got to do that. If someone in HR wants to correct me, please do. I may have the whole concept all wrong.
What I am certain of, though, is the immense inequality of incomes inherent in the mortgage industry. Loan officers make hundreds of thousands – into the millions – of dollars every year. Many in operations – processors, closers, post-closers, and those who coordinate these departments and work on the extreme back end in final docs and shipping – are struggling to make ends meet. A lot of these folks are not college graduates (in my experience most loan officers are).
Rather, they are folks who had started in the industry out of high school and found a middle-class lifestyle, was galling. While I have always admired the mortgage industry for being open to anyone, regardless of formal education or degree, the truth is that most of the people working in support positions are working class folks. I was an exception.
I had other options, which I exercised when I left the industry for good in 2019. They don’t. They are burdened with enormous pressure for little reward – so much so that loan processing was ranked by CNN as one of the “most stressful jobs that pay poorly.” Layoffs, too, are common – especially this time of year, when in northern climates like Chicago business can slow. It is precarious employment.
That makes what happened to the Better.com employees all the more egregious. These aren’t high-earning loan officers being let go, but processors and closers and the folks who keep the money wheel greased and turning. What we saw was the worst of American finance and capitalism at play: a moneyed CEO showing contempt for the workers who earn him his profits and treating them as disposable.
As a former mortgage processor, it made me sad for my colleagues. As an American and a decent person, it makes me sick.
What I’ve been up to…
For The Independent, I wrote about Congressman Thomas Massie’s terrifying Christmas photo. The Republican from Kentucky tweeted a photo of him and his family – including his children – holding assault rifles in front of a Christmas tree. “Santa, please bring ammo” he asked in a tweet. This photo didn’t surprise me, but it did disturb me. The truth is, it is indicative of America’s perverse gun culture and the violence inherent in our nation.
For the Daily Yonder, I wrote about my experiences coming back to rural America – namely Appalachia – after seven years of being exiled in Chicago. A lot of my big city friends can’t believe I like it down here, but I do. Rural America ain’t so bad, y’all.
For 100 Days in Appalachia, I wrote about Confederate iconography in Appalachia and how bizarre I find it that a region which largely supported the Union flies the flag of the folks we fought against 160 years ago. These statues are not about our history or heritage, and the fact that they exist here in the mountains proves it. We need to do a better job of accurately remembering our history.
What I’ve been reading…
I read “Six of Crows” by Leigh Bardugo. A dark fantasy novel set in what seems like a version of 19th century Amsterdam, I don’t know if I would classify it as “steampunk” but it’s definitely gothic. Basically these six thieves – some of whom have complicated pasts, including with one another – must break into a foreign fortress to save the world from a terrifying new threat. This is a YA novel, and I’m not generally a fan of YA, but it’s engaging and some of the characters, like mysterious thief Kaz Brekker, are well drawn. (Others fall a little flat.) It has a sequel which I will read next and is apparently part of the same continuity of “Shadow and Bones” which is now a Netflix series. I’ve not read that nor have I seen the show, but I might.
This article about “boomerang employees” was interesting. In the mortgage industry, a lot of people leave companies and come back. Even employees who were laid off. In fact, I know one woman who was escorted out by security after she quit only to, years later, end up back at that same company in a management position. Honestly, that’s pretty badass if you ask me.
This piece from CNN’s Nectar Gan and Steve George on how China (laughingly) claims to be a democracy is worth a read, if only because it illustrates the fact that China is already actively challenging American hegemony and our mantle as the leader of the free world. CNN’s “Meanwhile in China…” newsletter really is worth subscribing to. Knowing what’s happening with and in China is going to be increasingly important as the century progresses, because anyone who is honest with themselves knows that this century looks to be not the American Century, but the Chinese Century.
Speaking of China, I don’t understand why Joe Biden is not sending a diplomatic delegation to the Beijing Olympics. If this was in Pyongyang I might get it, but let’s pretend that the United States is about to do anything meaningful to sever diplomatic ties with China or to punish it for its human rights abuses? This is meaningless posturing on the part of Washington.
These tweets listing terms and subjects Republicans in Wisconsin want to ban as part of their move to prohibit “critical race theory” from our schools was helpful, as it proves this isn’t about “critical race theory” but really about Republicans trying to ban any accurate teaching of history and racism. “Anti-racism?” “Colorism?” “Cultural awareness?” “Equity?” “Multiculturalism?” “Patriarchy?” Really??? Lord give me strength.
The Supreme Court looks to end the separation of church and state. So that’s something to look forward to in 2022, on top of the end of reproductive rights and a projected Republican wave in the midterms. (That’s sarcasm, in case you missed it. We truly live in the worst timeline.)
What I’ve been listening to…
Did you know Sia put out a Christmas album a couple years back? It’s true, she did. And it’s about what you’d expect. But I’m obsessed with this song. (I first heard it when they used it in a trailer for EastEnders Christmas in 2019.)
A picture of the puppy…