“Lots and lots of banks bet lots and lots of money that people who couldn’t afford to buy houses could afford to buy houses, based on the assumption that house prices go up.”

Sort of. Yes, the expectation that home prices would go up was part of it. Buyers were more willing to assume slightly riskier investments; they thought they could assume adjustable rate mortgages (ARMs), ride the initially good rates, and then refinance before the rate reset. That doesn’t work so well when home prices decline. Banks probably assumed that rising home prices would protect them in cases of foreclosure, but banks don’t really want to foreclose on lendees (they’d rather collect all that interest), so I’m not sure that’s what was driving it. The other thing is, some of the lendees were not “people who couldn’t afford to buy houses.” Some people can afford the houses, but see that they have more debt on the mortgage than the house is worth and decide not to pay. (A mortgage that does this is labelled “under water.” In other words, this a VERY complicated problem.

“Accounts of up to $100,000 are federally insured: in case of bank failure the government will pay you back. It just might take a really long time.”

I wouldn’t expect it to take too long, and most times you can still use checks, ATMs, etc. That’s why those lines outside IndyMac are in many ways stupid. The other thing is, you may get back more than $100,000 if you’re lucky. When a bank closes, the FDIC assumes control and basically sells it for parts to pay off the bank’s liabilities. If there’s enough money, depositors with “uninsured money” (more than $100,000) may get a share of the money the FDIC makes during the sale. (That’s called a dividend payment.) In fact, the folks who bank at IndyMac are already getting “advanced dividends” of 50% of whatever they deposited over $100,000.

“Am Law 200 law firms are expected to hire about 10,000 new associates this fall (although query whether that number will go down with the economy). In contrast, the nine justices, plus retired Justice O’Connor, hire just 37 new law clerks each year. Thus, unlike summer associates, Supreme Court clerks DO need to stand out from the crowd to land their jobs.”- ATL blog (http://abovethelaw.com/2008/07/supreme_court_clerk_hiring_wat_13.php#more)

Since this wasn’t just one mistake, and the scope of the mistake seems to be pretty huge (i.e. not one or two missing cites), a judicial appointment is not really the right move.

Another question this leaves unanswered is why would a politically weak, lame duck president even attempt this crap?

A federal judgeship is a highly coveted position, and I don’t think it’s too much to ask that someone nominated for the job not have any “inadvertent” plagiarism on his record. This is especially true given how hard it is to get a judge off the bench for bad behavior; you basically have to murder someone to get impeached.

O’Neill says plagiarism shouldn’t be a career killer, but I doubt he’d hire a clerk with a boo-boo like that.

It seems interesting to me that there is such a strict standard in school that seems to dissipate once we get out into the legal community. One mistake shouldn’t end a career, but the legal profession seems to have let that slide to allow all sorts of almost unethical behavior proliferate. Maybe I believe too much of what I read or see on TV, but it seems like lawyers allow their clients to say known half truths, or perjure themselves and don’t always get disbarred.