Who knew a relatively unknown state senator could have such far-ranging implications for jammed-up consumers scurrying to deal with over-the-levee unemployment rates, health-care costs and home-foreclosure levels–as well as credit-card company shenanigans?

Scott Brown (R-MA)  hasn’t been seated in Teddy’s 50-year-old chair, yet–but already he has an action figure. And some reports–notably, this one in the Christian Science Monitor– say his Republican victory in the Massachusetts race for Kennedy’s vacancy has “sent tremors” not only within the Team Obama reform effort but also “throughout the United States.” Beyond the five states the Monitor cites as candidates to follow the Massachusetts’ example, the spillover has also reached the Illinois primary–yes, a primary–in which Reuters points out “Five things to watch in Illinois” and at least one GOP-leaning blogger quotes the Reuters report then goes on to say: “The White House is paying close attention today. It’s a primary close to Obama’s heart, as it’s his former Senate seat that’s up for grabs.”

One thing for certain–any leader who can even partially help us to hack our way out of this mess deserves an action figure.

The serious, sobering certainty is that one election cost the Democrats their Senate “supermajority” of 60 votes, the implications of which are detailed in this CBSnews.com piece.

Here’s the highlights: “Basically, without 60 votes, under Senate rules, debate could go on forever and ever. This is called the filibuster. So basically, [because Brown won] . . . , the Republicans, with 41 votes, . . . have enough votes as the minority to prevent the Democrats, the majority with 59 votes, from ever bringing a final vote on health care reform or any other legislative priority to the floor. The minority [does] . . . basically control the Senate.”

Senate tactic not mentioned in Constitution

Ok, well, maybe that’s not quite true, but the point about the filibuster is accurate; and if all this self-focused in-fighting is not enough, turns out that cloture, the “procedure” that kills a filibuster, is not even a Constitutional device–in other words, even though its effects are very important to legislation that affects us all, it’s merely a procedural tactic–and limited to the Senate, at that. (For comparison, read about the Electoral College, which is in the Constitution.) This won’t be “the first time that the filibuster has been used to stop major pieces of legislation,” Fisk and Chemerinsky write, “and it’s definitely not a partisan idea–both parties, when in the minority, have used the filibuster to prevent the majority from passing everything they wanted to.

“According to law professors [Fisk and Chemerinsky] in their Stanford Law Review article from 1997, ‘The Filibuster,’ the technique was used not only to prevent civil rights legislation from passing for years in the last century, but more recently during the Clinton administration. Senate Republicans, then as now in the minority, used the filibuster to stop economic stimulus, campaign finance reform, lobbying reform and the [previous] attempt at health care reform. When the Democrats were the minority party in the Senate, they used the filibuster to stop much of the GOP’s Contract with America.

” ‘Filibusters are so ubiquitous in the contemporary Senate that it is now commonly said that sixty votes in the Senate, rather than a simple majority, are necessary to pass legislation and confirm nominations,’ wrote Fisk and Chemerinsky. “In fact, during the presidency of George W. Bush, Democrats, with Biden in their ranks, frequently filibustered some of the president’s judicial nominees for the federal courts.”

It gets worse.

Evolution of the ‘painless’ filibuster

When you think of a real-life filibuster, aren’t you getting an image at least somewhat informed by movie life? Namely, Jimmy Stewart’s “Mr. Smith” in Mr. Smith Goes to Washington. Anyone who’s ever seen the movie remembers the agonizing filibuster reel, watching the hero struggle to learn the tricks of the rulebook, while the other senators take turns dozing, coming and going in shifts.

Well, it turns out things have changed quite a bit since Capra made that 1939 movie.

The filibuster tactic nowadays is known as the “stealth filibuster.”

From the abstract of the Fisk and Chemerinsky paper: “Filibusters are ubiquitous but virtually invisible, for the contemporary Senate practice does not require a senator to hold the floor to filibuster; senators filibuster simply by indication to the Senate leadership that they intend to do so.”

In other words, a senator merely indicates that “I would filibuster, if I had to” and that takes the place of the real thing: no parched lips, no pleading bladder. *Poof* Instant roadblock, and the bill is tabled–Next!

From a May 5 piece at Huffington Post, “The Electoral College is provided for in the United States Constitution. The filibuster is not. In fact, the word doesn’t appear in any of our founding documents. Its derivation is from the Spanish filibustero, meaning ‘pirate’ or ‘freebooter.’ “

History of the tactic’s development traces to 1789, according to the Huffington piece, but for this discussion, the first important change came in 1917, when “the Senate developed a way of shutting down dilatory tactics of an obstreperous minority. It is called the cloture rule. During the closing days of the session that year, a group of isolationist senators who opposed the entry of the United States into World War I filibustered a bill which would have allowed President Wilson to arm U.S. merchant ships. The President denounced them as a ‘little group of willful men’ and called on the Senate to change its rules.”

Which it did, resulting in “a cloture rule which was embodied in Rule XXII of the Standing Rules of the Senate” . . . providing for “a 2/3 vote of all senators” that “could cut off debate.”

Whether Jimmy Stewart’s character had a problem taking a bathroom break is a question for fans of movie trivia, but the longest. actual-factual real-life filibuster on record–Strom Thurmond’s 24-hour, 18-minute ramble-thon against the Civil Rights Act of 1957–“would have gone on longer had Thurmond’s doctors not forced him to quit out of concern for kidney damage.”

More important was a deal brokered by LBJ (big surprise, right?) that resulted in a couple of new wrinkles, which in turn paved the way for a post-Watergate rule change that, among other things changed the majority requirement to a 3/5 vote and resulted in the the 60-vote supermajority requirement of today.

Inadvertent creation

Sadly, there’s more…which brings us back to Fisk and Chemerinsky, as described in the Huffington piece: “The story took a turn for the worse when, in the early 1970s, Senate majority leader Mike Mansfield — intending to dilute the power of the minority –inadvertently made filibustering easier.

“The extended speechifying made famous by Strom Thurmond and Huey Long before him has been replaced by what legal scholars Erwin Chemerinsky and Catherine Fisk have dubbed the ’stealth’ filibuster. Its genesis was the early 1970s, when it became apparent to then majority leader Mike Mansfield (D-MT) that delaying tactics such as objections to unanimous consent motions; forcing the previous day’s journal to be read aloud in its entirety; suggesting the absence of a quorum; and — of course — extended periods of time holding the floor were causing the Senate to fall behind in doing the people’s business.”

An idea emerged to let filibusters occupy morning sessions, but to reserve afternoons for “pressing business.”

Perversely, what actually developed from Mansfield’s dual-track system “has proved to be disastrous.”

——————-Next, in Part 2—————

What we have now is a system in which “the Senate has come to a point in time where it seldom takes up legislation unless the majority leadership has counted sixty votes. In other words, a credible threat that 41 senators won’t vote for cloture is enough to keep a bill off the floor on most occasions. Boston College historian Julian Zeliger puts it this way: ‘Mansfield’s measure, which was intended to promote efficiency, inadvertently encouraged filibusters by making them politically costless and painless.’ ”

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If you are overwhelmed by debt, filing for bankruptcy protection may be your most pragmatic alternative. If you are facing foreclosure of your home (sometimes referred to as your “primary residence,” as opposed to a second home, or “vacation home”),  bankruptcy protection may be your best route to saving the home. If you are struggling with medical bills, you may be in a special category for setting debt aside, and if you have problems with credit-card debt, please know the laws have changed recently. For bankruptcy basics, please see:

Principles of bankruptcy

Basics of bankruptcy

Introduction to Chapter 7

Introduction to Chapter 13

We left the Phat Lady of the Turnaround headed back to her dressing room, not yet ready to sing the praises of the end of the Recession and the start of a shiny future.

In fact, foreign observers may have a better feel for the plight of the U.S. consumer than do many domestic pundits and measures that just don’t seem to get it.

For example, an Oct. 26 report from MarketWatch tells us, “A broad gauge of U.S. economic activity rose above the level that typifies recessions, the Federal Reserve Bank of Chicago reported Monday.”

But here’s an account from Oct. 28…from Ireland, mind you, showing a better grasp of the situation:

“The US recession is expected to be declared over tomorrow but economists insist that it is still too early to start celebrating.

“When gross domestic product (GDP) estimates for the third quarter are released at 8.30am local time (12.30 Irish time), they are likely to report that the economy is growing again, ending one of the deepest slumps since the Great Depression.”

Of course, that report did not materialize, but even if it had,  imagine the bitter taste and hollow comfort “to the millions of people left unemployed or who have lost their homes as a result of prolonged economic downturn–especially as economists suggest that more jobs and houses are to go before real improvement is realised.”

And here’s this…from The Globe and Mail, in Canada: “Fresh figures due out Thursday are widely expected to show that the U.S. economy grew in the third quarter for the first time in more than a year – long-awaited confirmation that the recession is over and recovery has begun.”

But a few grafs down, here’s the kicker: “But temper the enthusiasm: The main driver of the economy – U.S. consumers – are still in a deep funk, relying heavily on temporary government incentives to get them to spend.”

At least the president seems to have a grasp.

As we know, the recession’s end was not announced Thursday, but still the AP reported, “Helped in large part by federal support for spending on cars and homes, the economy grew at an annual rate of 3.5 percent from July through September, the government said Thursday.”

Although Obama called the numbers “welcome news,” he also said, ” ‘The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well.’ “

So, maybe the numbers are simply saying that the recession is over for the Big-Shoe Boys on Wall Street, where business continues as per usual?

Remember the teeth-grinding despair in certain circles when the gummint “turned its back” on Lehman Brothers while bailing out everybody else? Well, have a look at Kevin White, one of Lehman’s “architects” of the so-called “securitized” debt that helped create the Recession. In a Fortune report via CNNMoney.com, we learn that White was “head of the global structured finance syndicate at Lehman Brothers ([before being]  . . . promoted to a different job in 2006), [when he] created the kind of collateralized debt securities that fueled the financial bubble–and still bedevil many bank balance sheets.

“Now White runs a firm that’s doing a nice business in cleaning up the mess: Spring Hill Capital Partners specializes in buying, selling, deconstructing, and investing in structured finance products.”

And get this–he sounds proud of it: ” ‘The securitization process locked a lot of assets into mortgage-backed securities or CDOs,’ says White. ‘As the underlying collateral ran into trouble, the complexity of securitizations has paralyzed investors, lenders, and borrowers.

But we made a lot of these products, and we’re skilled at taking them apart, valuing them, and in some cases restructuring them.’ “

Kinda sounds like Stanford Kurland, who spent nearly 30 years at Countrywide before leaving in 2006, then subsequently starting PennyMac (along with a cadre of other Countrywide alumnae)–and to do what? Why, to specialize in distressed properties…

As might be expected Kurland puts distance between his role at Countrywide and its riskier business practices, as shown in this March 2008 account at MSNBC.com: “Kurland, who left Countrywide in late 2006, said he wasn’t to blame for problems faced by the company as a result of subprime loans made to people with shaky credit histories.

“ ‘My leaving Countrywide has a lot to do with having a different strategic view,’ Kurland said. ‘I have a reputation in the market that, unfortunately, is tainted by things that transpired after I was gone.’ ”

Not everybody bought into that, according to MSNBC:

“The irony was not lost on analysts.

“ ‘He won’t be the first or the last person trying to make money on both sides of a trade,’ said Frederick Cannon, an analyst at Keefe, Bruyette & Woods Inc. who covers Countrywide [since absorbed by Bank of America].

“ ‘On the one hand you could make the case that he was (with) the company that made all these loans. On the other hand, what we need right now is to find some buyers for these assets,’ Cannon said. ‘Is it fair? Hard to say.’ ”

(CNBC has an interesting slide show here, a “where-are-they-are-now?” update on (in)famous figures from the financial crisis, including Countrywide founder Angelo Mozilo, who is fighting the SEC in a civil suit alleging fraud and “misleading investors.”)

By the way, it’s these guys who will “officially announce” the end of the recession; as you can see as of 10-30-09 (on the right-hand side of the page), the current recession has no end date, but merely a question mark. Meanwhile, as end-of-Recession talk buzzes, unemployment, foreclosures and filings for bankruptcy protection continue unabated.

This, from Oct. 28 The New York Times, “Unemployment is Higher Almost Everywhere”:

“Unemployment rates were higher in September than a year earlier in 371 of the 372 United States metropolitan areas, according to the Bureau of Labor Statistics.”

Not too long ago, the concern was that unemployment might blow past 10 per cent. In some areas, the new concern is it may breeze on 20 per cent. “The greatest increase in unemployment over the last year was in  Detroit-Warren-Livonia, Mich., where joblessness grew 8.4 percentage points to a total rate of 17.3 percent in September 2009. The second-greatest year-over-year increase was in  Muskegon-Norton Shores, Mich., where the rate rose 6.8 percentage points to 16 percent.”

And it gets worse: in a couple of areas, 20 per cent is in the rear-view mirror: “In September 2009, the overall highest metropolitan rates of unemployment (again, not seasonally adjusted) were in  El Centro, Calif., and  Yuma, Ariz., where rates touched 30.1 and 24.2 percent, respectively. These two areas, which both border Mexico, are highly agricultural.”

On the foreclosure front, perhaps the worst hardest-hit areas have bottomed out, but the damage seems to be spreading according to RealtyTrac data reported by American Banking News.” ‘Rising unemployment and a new variety of mortgage resets continue to gradually shift the nation’s foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave,’ said James J. Saccacio, RealtyTrac’s CEO in the Metropolitan Foreclosure Market Report. “Per the report, filings for foreclosures rose five percent in the third quarter, and 23 percent over last year. This includes auctions, bank repossessions and defaults. Taking into account the unreported abandonment by homeowners of their houses by banks so they don’t have to include it as an accounting event, and the numbers are even more staggering, to say the least.”

Consumers seeking relief via bankruptcy petitions are filing in waves, unmatched since the rush to beat the “reform” deadline in 2005.

Google “personal bankruptcy news” and the results read like a fill-in-the-blank: numbers rising in _____________  (Massachussetts, Connecticut,  Georgia).

An Oct. 2 Wall Street Journal post sums it up simply as “Personal Bankruptcy Filings Soar”: “Consumer bankruptcies topped one million for the first nine months of this year, the highest point since the system was overhauled in 2005.

“The number of personal bankruptcy filings for the nine months rose to 1,046,449 as of Sept. 30, the American Bankruptcy Institute, an organization made up of attorneys, accountants and other bankruptcy professionals, said Friday, using data from the National Bankruptcy Research Center. There were 773,810 personal bankruptcy filings for the same time period in 2008.

“September’s filings reached 124,790, 41% higher than the same month last year.”

Looks like the Phat Lady of the Turnaround has even left the dressing room and headed home–if she still has one.

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Bankruptcy protection offers a chance for a new start, as well as methods for protecting certain assets–and even improving one’s credit score over time. To asses the value of bankruptcy for your individual situation, you should seek counsel from a trained, experienced bankruptcy attorney.

Here’s some online resources:

U.S. bankruptcy court

Federal Trade Commission, consumer credit

Bankruptcy Corner, overview portal

Bankruptcy Corner, principles of bankruptcy

The entertainment industry in Las Vegas has not been immune to the impact of the recession. Las Vegas bankruptcy case filings in July increased by 54% compared with the previous year.

In a metropolitan area where one industry is the focal point for the local economy, businesses that plan for an economic storm are the ones that survive.

Casino operators like Station Casinos, which filed for bankruptcy protection in July, are committed to keeping their business alive. They turn to bankruptcy as a method to achieve financial stability during a difficult economy, betting that the market and their customer base will eventually return.

You should approach your personal finances like savvy businesses; protect your core assets and plan for the future by partnering with an experienced bankruptcy attorney. You want the assurance that your financial decisions are grounded by lawyers who are experts in bankruptcy protection, including both federal and local regulations.

What rights does a debtor have to assume a contract after the estate rejects it? Under what circumstances would an appeal be dismissed? Selecting the bankruptcy law firm that is familiar with all regulations is a determining factor to the success of your finances.

In this economy, survival requires tough choices and a commitment to do whatever it takes. With the right guidance, bankruptcy can be the tool that protects your assets during the difficult economic road ahead. Partner with a bankruptcy attorney who places your financial recovery above all other goals.