Truthdig: It is. OK, the next question, from Jason: Is the American dream a myth, and did that myth help cause the current problem? I just turned 30 and do not have a house, yet most of my friends do or are planning to buy very soon. I used to feel left out and envious, now I feel like I never want to have such a burden as a mortgage and be a slave to it. And by extension a slave to my job and a corporation in order to earn money to make my mortgage payments.
RS: Well, the fact is, you know, you want to own a house because there are a lot of breaks to people who own houses. You get a deduction on your interest rate, you know; hopefully, when there’s inflation, you’re protected somewhat. There were rational reasons why people wanted to be stakeholders, and it’s built into the … I wouldn’t say the myth; it’s built into a basic idea of American democracy of a large, ever-larger middle class of stakeholders, rather than the extremes of rich and poor which have characterized other societies. And the whole dream of the founders, going back to the Founders, was to have, you know, basically what they had in mind was an agrarian democracy with basically stakeholders in a large middle class…[OMISSION]…would create stability in the society. Now that’s eroded dramatically, and we have very sharp class differences now that have exacerbated over the last 20 years. We have 44 million people in this country now living officially under the poverty line. That’s official government statistics; 44 million people are poor! A big chunk of our population, people who are called middle class, are now really suffering. And so the question of homeownership … you’re right in the sense that homeownership was part of a dream. A dream of a large American middle class of stakeholders, people who had something, you know. They could say, “OK, I’ve got my home. I’ve got this piece of land. I’ve got something to pass on to my children. I’ve got a place where I can live when I’m retired and, you know, leave it.” That has been destroyed. It’s been destroyed. Now, in terms of the question that was asked—“does it make sense to opt out of that?”—yes. It does. Because right now it’s a very risky business to get into, housing. They have in fact destroyed the housing market, and right now the reason we have a moratorium with some of the leading banks on foreclosures is we’ve got all these houses … this is an absolute disaster. Just tracing the actual ownership of tens of millions of houses has become a major problem. … [OMISSION] And the reason I bring up this Tom Donilon, who was the chief counsel at Fannie Mae when they concocted this thing, and his wife is chief of staff to the vice president, Joe Biden—you know, I wonder, what are these people thinking? This is the guy that Obama just praised, his “probing intellect.” Why doesn’t Obama go probe this guy’s probing intellect and ask him today—just imagine, Barack Obama could say “Hey Tom, I just made you head of my National Security Council. I’ve trusted now the nation’s security and future to you, Tom. ’Cause you’re so bright, you have such a probing intellect, you have a remarkable work ethic. So what happened between 1999 and 2005 when you were the counsel of Fannie Mae, and you concocted this crazy system of the MERS, the Mortgage Electronic Registration Systems, that is now destroying the housing market? What were you thinking? What did you think would work? How do we fix it?” You know? You would think one reporter would ask the president that, you know? “Have you asked your good buddy Tom, now, the guy who helped you in the debates, your close friend—have you asked him why he created this monstrosity of a mortgage registration system so we don’t even know who owns these houses now?” And the people are not asking that. And if you can detect some rage in my voice—I feel very angry about this. I don’t get it. I really don’t get it. I voted for Obama, I contributed money to his campaign, and I wonder how in the world—how in the world did you turn to somebody who was as close as anyone to the creation of this monstrosity of securitized mortgages? And all the mess that was created when he [Donilon] was at Fannie Mae and made an enormous amount of money off the run-up of Fannie Mae stock and everything. And you turn to this guy to be your closest confidant and protect this country in terms of national security in the world? I think it’s a major, major scandal and it’s very, very depressing in terms of an assessment of who Obama is and where he gets his information.
Truthdig: Oh, yes, exactly. We have time for one more question. And the question comes from BJW ... how are new mortgages being treated differently now?...
RS: This is the same question, and they’re not being treated differently, and that’s the whole problem. That Obama, for all of his talk about financial regulation and changing the system—they didn’t change the system. The banks are in charge, they do what they want to do, they’re not held accountable, and the mess continues. That’s the sad truth here. And, you know, this president … I can’t tell you. This is so disillusioning. So disillusioning. That this guy has been a craven tool of Wall Street. I’m sorry. That’s just the reality. And how in the world this candidate of change, who was supposed to be a community organizer, who was supposed to be feeling the pain of people out there, you know, ended up being the typical best-and-the-brightest, a lead educated snob who ends up being really indifferent to the suffering out there, and then leaves it to the Sarah Palins of this world to represent the fear and anger of people out there, and we don’t have a serious progressive alternative. That’s a very sorry state of affairs.