Top Leaderboard, Site wide
November 28, 2014
Truthdig: Drilling Beneath the Headlines
Sign up for Truthdig's Email NewsletterLike Truthdig on FacebookFollow Truthdig on TwitterSubscribe to Truthdig's RSS Feed

Get Truthdig's headlines in your inbox!


Weather Extremes Will Be the Norm As World Warms




The Chain
Joan of Arc


Truthdig Bazaar
The Nature and Destiny of Man

The Nature and Destiny of Man

By Reinhold Niebuhr; Robin W. Lovin (Introduction by)

more items

 
Report

Halfway Through the Lost Decade

Email this item Email    Print this item Print    Share this item... Share

Posted on Apr 25, 2012
woodleywonderworks (CC-BY)

By Robert Scheer

Does anyone care that the economy is floundering and that we are not getting out of this crisis anytime soon? Housing values are in the cellar, the Fed foresees unemployment remaining unacceptably high for the next three years, and national economic growth is predicted to be, at best, anemic.

Even the substantial rise of stock averages during recent years has been based in large part on the ability of companies such as Apple to outsource jobs and sales to booming markets led by China—while America’s graduating students face mountainous debt and what is shaping up as a decade without opportunity.

These are the inescapable conclusions to be drawn from a gloomy report released Wednesday by the Federal Reserve. In that document, the Fed revises downward its growth projection for the next two years and predicts, in the words of a New York Times article about the report, that “unemployment will remain a massive and persistent problem for years to come.” The housing failure that is the root cause of this economic emergency continues unabated because there is no political will in either party to aid beleaguered homeowners.

Beneath all the pundit blather about the election lies the fact that most deeply affects the voters’ well-being: Home prices are at a decade low, and in cities like Atlanta and Las Vegas they are as dismal as they have been since the Case-Shiller indices started tracking housing prices in the early 1990s.

Without a resurgence in housing value, consumer confidence will remain moribund and a woefully weak labor market will persist. Every time housing seems to be rebounding, the banks and the feds unload more of their toxic mortgages and prices edge lower.

Advertisement

Square, Site wide
The only thing preventing a complete collapse, one that would plunge us into deep recession or worse, is the Fed’s extremely low interest rate, which Wednesday’s report reiterated will remain at near zero until late 2014. If the Fed rate were to rise, driving up all of the adjustable rate mortgages out there, we would be in a full-blown depression.

All of this terrible news should spell disaster for Barack Obama’s re-election chances, since it is a direct consequence of his continuing the George W. Bush strategy of bailing out the bankers while ignoring the plight of the homeowners they swindled. But Obama will probably survive because his Republican presidential rival, Mitt Romney, is far worse on this subject.

At least Obama has made a stab at pushing the banks to provide mortgage relief, albeit a halfhearted one. When assessed in light of Romney’s splendid indifference to the suffering that he himself and other financial hustlers caused, Obama deserves support; at least the president seems alert to the pain the bankers have inflicted, while Romney blames their victims.

Romney’s is the sink-or-swim, tough-love approach that has come to mark the Republican Party. As he put it last fall in an interview with the Las Vegas Review-Journal: “... [D]on’t try and stop the foreclosure process. Let it run its course and hit bottom. Allow investors to buy up homes, put renters in them, fix the homes up and let it turn around and come back up.”

That of course does not address the painful losses of, for example, Nevada homeowners, who have witnessed a 62 percent drop in values since 2006. At fault is a free-market-rules philosophy that denies the essential reality of American housing: The market was not free, it was brutally rigged.

The securitization of mortgages into collateralized debt obligations turned homes—the castles of so many average Americans—into gambling chips, and the fallout mainly hurt those who were not even in on the game. As The Wall Street Journal reported in February when Romney was campaigning in Nevada, the primary victims of foreclosure are those who had paid down their home loans, or worse yet owned homes outright, only to find that repossessions on their block destroyed the value of their investment.

The appalling thing is that this enormous mess did not have to happen. It is a man-made disaster, the result of capricious Wall Street bankers who have no regard for the national interest. Perhaps that is to be expected, but what is shocking is the inability of leading politicians of either party to mount a challenge to the unfettered greed that has come to dominate our political process.

In the end, the perpetrators of this calamity have been rewarded, and their patsies, the ordinary folks who are supposed to matter in a democracy, have been cast overboard.

Click here to check out Robert Scheer’s book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”


Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at www.truthdig.com/robert_scheer.



Get truth delivered to
your inbox every week.

Previous item: Romney’s Magical Capitalism

Next item: A History of the World, BRIC by BRIC



New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

By Galen Flynn, April 26, 2012 at 6:36 am Link to this comment
(Unregistered commenter)

I care, thats why I’m learning Chinese, the older generations fucked up this country too much.

Report this
David J. Cyr's avatar

By David J. Cyr, April 26, 2012 at 6:34 am Link to this comment

QUOTE, Robert Scheer:

“When assessed in light of Romney’s splendid indifference to the suffering that he himself and other financial hustlers caused, Obama deserves support; at least the president seems alert to the pain the bankers have inflicted, while Romney blames their victims.”
__________________

Therein Scheer advocates putrid principled pathetic “progressive” capitulation… again.

The “progressive” argument is that the corporate party’s (D)s should be supported because its (R)s deny the existence of a need, while its (D)s only ignore the need.

Lost decade? The (D) dedicated liberals have spent the last half-century corporate party obediently tearing apart and undermining whatever progress that social justice movements have built up.

The “progressives” are the liberals who keep voting for the corporate party’s Democrats so they can keep protesting against what they keep voting for.

The “Principles” of Liberal Voters:

http://chenangogreens.org/home/index.php?option=com_content&task=view&id=491&Itemid=1

Jill Stein for President:

http://www.jillstein.org

Report this

By balkas, April 26, 2012 at 6:27 am Link to this comment

the less americans [et al] use/waste, the better for world. so, i am very happy there
is much unemployment and recession in u.s and world.
this constant progress which constant and enorm/vitiating regress appears
delusional.
so we need more much more healthy regression, recession, or even depression.
and not to mention warfare or manufacturing ever ‘better’ killing machines, lying,
deceiving, hating, araging, godology, etc.

Report this
rbe4free's avatar

By rbe4free, April 26, 2012 at 5:43 am Link to this comment

The truth they don’t want the people to know is that fiat currency is worthless, it has no value, it is not backed by anything at all, no precious metals and hasn’t been for years.  When a loan is created neither the principal nor the interest is printed, it exists only as numbers in a computer.  It is in fact created from thin-air.

Don’t tell anyone though as the truth is so simple that noone would believe you.

When unemployment reaches 30% or more(we’re already at 23%) due to technological displacement and all those people lose their purchasing power in the current monetary system, how will the system survive?  Simply put the system cannot sustain itself without the participation of the consumer.  It is doomed to fail.

When will everyone wake up and realize that blaming a political puppet or switching to a new one, will not change anything, when the puppeteer remains the same.

The Federal Reserve Cartel: The Eight Families; The 1913 creation of the Fed fused the power of the Eight Families to the military and diplomatic might of the US government. If their overseas loans went unpaid, the oligarchs could now deploy US Marines to collect the debts. Morgan, Chase and Citibank formed an international lending syndicate.

Until this is disolved, there will never be any change for the better, except for the financial elite.

If you’re serious about a solution, check out The Venus Project.  If you have questions about it check out the FAQ page. =)

Report this

By Bob Vance, April 26, 2012 at 5:05 am Link to this comment
(Unregistered commenter)

It is clear that all the sincere admonitions about putting America back to work
in this campaign season will never address the underlying fact that we live in a
world of finite resources, they are being plummeted past the point of
renewability, technology cannot succeed in its customary role as savior because
it too relies on a finite bank of resources… and the people that run the show
have been able to re-arrange its priorities so that they cannot lose, and can
actually benefit, from the losses of the rest: a swelling pool of people that will
soon be too large to ignore by those who have relegated those who swim in it to non-personhood and mere objects in the market. Who has learned to swim and who will eventually drown?

That this article as well does not seriously question the assumed goodness of a
perpetual growth strategy as a way out of our predicament puts it in the
category of a less than serious query into the nature and possible resolution of
our quandary. One does not have to believe in a Marxist theory of economics to
understand what is taking place. In fact, it might be best if one merely had a
moderate amount of respect for such theory in order to place it in its rightful
place in terms of explaining why the people who can make a difference will not:
simply put… if they benefit from the status quo, the status quo will not be
moved to change, even if, in the long run, it is ultimately self-destructive to
continue along the course that has been set for them, and by them for the rest
of us.  We have been both cleverly and ruthlessly denied our personhood. And if
that seems too extreme a position then I suggest your attention be drawn to
what has happened to our right to Habeas Corpus.

Any change from outside the bastions of the wealthy and powerful, what is now
being referred to as “the 1%”, will have to be forceful enough to be reckoned
with in ways that have not been seen before. Creative disruptions and elegant
new systems put into place, where they can squeeze in unnoticed or masked to
the constant and clumsy surveillance of the plutocrats, will have to light the
way… and all in the hope that those who continue to dress themselves and their
lives in the riches bought at the expense of the blood and basic needs of others
will be distracted enough by their own excesses, their reality show narcissism,
not to notice that the new order is upon them.

It will come anyway. We cannot proceed in this manner without bringing it upon
ourselves. Slow and painful or quick and devastating, without commitment to
real change and guidance by someone wiser than those at the helm now, it will
come.

Report this

By madisolation, April 26, 2012 at 4:54 am Link to this comment

“When assessed in light of Romney’s splendid indifference to the suffering that he himself and other financial hustlers caused, Obama deserves support; at least the president seems alert to the pain the bankers have inflicted…”

Talk about being satisfied with crumbs. “At least the President seems alert to the pain.” How pathetic is that? After all this man has done, from supporting the bailout to keeping the Bush tax cuts to deciding he can murder us at his whim and wage war when he wants, we are to vote for him because “at least the president seems alert to the pain the bankers have inflicted.”
The Democrats are really scraping the bottom of the barrel now, trying to find the least little scrap to use as a pro-Obama talking point.
Vote for anyone other than Obama or Romeny, or don’t vote at all.

Report this

By bpawk, April 26, 2012 at 4:51 am Link to this comment

If you want to kill the middle class by a thousand cuts, vote Obama; if you want to kill the middle class right away, vote Romney. Which way do you want to go? Should have started a third party back in the 70s with Ralph - people thought they were too good for him ... I guess a lot of people get what they deserve after all when they do nothing.

Report this

By Cliff Carson, April 26, 2012 at 4:29 am Link to this comment

Yes your ending to the article spells it out - almost:

“The appalling thing is that this enormous mess did not have to happen. It is a man-made disaster, the result of capricious Wall Street bankers who have no regard for the national interest.”

The Root Cause is another story.

Our politicians that we elect, many moons ago stopped representing the people and became the hired police for the International Financial Cabal.

The Republican Party let the way into this swamp and yes they certainly do blame the victims.

Kind of like a bank robber who pleads innocent claiming the bank is at fault because they make it too easy to rob.

Report this

By ReadingJones, April 26, 2012 at 3:02 am Link to this comment

OBomber has sent up a trial balloon about bulk sales
of foreclosed properties to “investors” for which
read vultures or bottom fishers. Carrion eaters do
have their purposes. But “investors” aren’t that
stupid.

Property managers are frequently on the take, for
example short term rentals for cash or sex. Property
appraisers are mostly con men. Housing inspectors are
in the service if real estate agents not buyers. Just
read the posts in the Wall Street Journal on this
subject.

The only people for whom individual home rentals work
are hands on owner managers and even for them it is a
pretty tough go, what with vandals, absconders,
constant maintenance, (ever try getting a so-called
maintenanceman to fix a plugged toilet), and owner
management does not work for anyone who might have to
move.

Here is something that might get the housing market
and its suppliers moving again. Sounds like
constipation relief doesn’t it. Under the existing
rules some one who has been forced into bankruptcy,
perhaps by high medical bills, must wait two years to
re-enter the mortgage market in order to buy a house.
If there has been a foreclosure there is a three year
wait. If the bank waits for two or even more years to
foreclose after the bankruptcy the wait can stretch
to five years or more. Gotta keep those service fees
rolling in, right? So here is my proposition. Reduce
the maximum waiting period after losing your house or
ability to get a mortgage loan to one year but only
allow a loan for say one-half to two thirds of the
previous mortgage which is about where the market is
right now. Forget all that BS about “moral hazard.”
Our heroes ar the CEO’s who put their companies into
bankruptcy in order to break their union contracts
and dump their pension obligations on the taxpayer,
What’s another trillion or two. Big bonuses will come
again.

Suddenly the market is liquid again. Individuals
start buying up those foreclosed properties again.
Homelessness decreases. Neighborhood blight starts to
disappear. Municipalities begin to collect taxes and
provide essential services like snow removal and
street repairs. Home Depot’s stock begins to rise.
People begin to be employed. Hope and change begins
to bloom and Obomber gets re-elected. Hooray, hooray
the party is on again.

It is the wee hours and I’ve been at that red, red
wine a little too long. I do think that there is the
kernel of a good idea here…, What say you?

Report this

By do over, April 26, 2012 at 2:03 am Link to this comment

Americans have sacrificed their morals for a tin cup and a pair of shades in the greatest con job ever.

Report this
blogdog's avatar

By blogdog, April 26, 2012 at 1:51 am Link to this comment

absolutely correct - Wall Street (and don’t forget City of London) made the mess; but
nowhere in this missive nor in most of punditry do we hear the voice of reason - make
Wall Street and City of London pay: a measly 1% tax on all investment turnover - an
investors’ sales tax - forget raising the personal income tax - tax investment turnover

also, we hear OBOMBER maligned for his feckless economic policy - but what about the
wars - needless, senseless, endless - only those invested in the MIC make out - but the
jobs, one hears - right - remedy as old as the hills: beat spears into plow shears - rebuild
infrastructure, fast rail, develop efficient alternative energy in the same plants with the
same contracts - just shut down the bloody wars

no mysteries and no reason the under classes cannot unite to make it so

Report this

Page 2 of 2 pages  <  1 2

 
Monsters of Our Own Creation? Get tickets for this Truthdig discussion of America's role in the Middle East.
Right 1, Site wide - BlogAds Premium
 
Right Skyscraper, Site Wide
Right 2, Site wide - Blogads
 
Join the Liberal Blog Advertising Network
 
 
 

A Progressive Journal of News and Opinion   Publisher, Zuade Kaufman   Editor, Robert Scheer
© 2014 Truthdig, LLC. All rights reserved.

Like Truthdig on Facebook