The last official American economic recession ended about five years ago. It was Post 9/11 but Pre-Iraq Invasion, and George Bush and the Republicans had a lock on the government. The Great Decider and his ideological brethren pushed tax “relief” for the wealthy and outright subsidies for their corporate friends.
Inevitably, the stock market rode high, individual wealth for a tiny segment of the population increased dramatically, and corporate profits jumped. Bush claimed that his policies – his ideology – were responsible for the economic recovery, and every chance he got he crowed about the strength of the economy.
Bush’s myopia is such that he never saw, and wouldn’t fathom if he did, that the “recovery” which looked so impressive on Fox News and in the pages of the Wall Street Journal, was a mirage for the majority of Americans who depend on wages for their survival.
In an editorial on August 29, the New York Times noted the obvious: the economic “growth” of the last five years has had a negligible impact for most of the population. According to the Times, the median household income was $1000 less in 2006 than it was in 2000. The Times went on to say that, “Indeed, earnings of men and women working full time actually fell more than 1 percent last year.”
This may be news to the Times, but it’s obvious for anyone who depends on wages for a living. Working-class Americans know a recovery when they’re in one – and for us the so-called recovery of the past five years has been nothing except a long march through a barren land. We’ve watched our productivity soar and the spoils accrue to CEO’s, hedge fund operators and Chinese bankers.
When the Times says, “This stilted distribution of rewards underscores how economic growth alone has been insufficient to provide better living standards for most American families,” we nod in agreement. Our invitation to the party never got sent because we were never meant to be invited.
Which brings us to fundamental questions about public policy and the ideas that drive that policy – questions which are generally ignored by the mainstream media and politicians of every creed. Oh, sure, Dennis Kucinich raises these questions, but Kucinich is a voice in the fog of Hillary and Barack; John Edwards has discovered that a populist message resonates with large audiences, but the media has largely written him into a corner.
While it’s clear that the Republican philosophy of giving more to those who already have the most is a total failure, the Democrats haven’t exactly excelled in the Big Idea department. All Democrats have done since the mid-90’s is ape Republicans to the point where Democrats don’t know who they are and what bedrock ideas they stand for. Barack Obama is a gifted orator, but his experience is paper thin and it’s not like he’s out there pushing the political envelope; Hillary Clinton has yet to meet a corporate cause she can’t support.
The 2008 Presidential election should be about Big Ideas, about the kind of society we want to create, and about our priorities as a nation, but it will probably be the same irrelevant claptrap voters have endured the past two election cycles. We’ll probably argue about some social sideshow like gay rights when a twisted economic policy that places the interests of the few above the needs of the many is the stake being driven through our hearts. Democrats can’t simply harken back to the New Deal because the political, military, social, and technological landscape we find ourselves in today is radically different than it was in 1932. But this doesn’t mean we can’t fashion some New Deal principles for this century.
The real question is – can we adopt such principles before it’s too late?
Thursday, August 30, 2007
Saturday, August 25, 2007
Welcome to Brazil
For the second time this week, the Yankees lost a game in 10 innings, this time to the Tigers in soggy Detroit. Meanwhile, Boston swept a double header and Seattle beat Texas, so New York is 6.5 games behind the Red Sox and 3 behind Seattle for the Wild Card.
Home foreclosures are running at a record pace, but here on the Platinum Coast, real estate prices remain high. Not too far from where we live there’s a “charming” 2BD/1BA cottage listing for a mere $879,000. According to the ad, the price was recently “reduced.”
Who can afford an $879,000 home? Doctor, lawyer, Indian chief…drug dealer? The question baffles. I notice a number of homes above the million dollar mark – older tract homes that have been renovated, one such with “filtered” views of the ocean. I guess if you can see a tiny sliver of ocean through a stand of eucalyptus trees that qualifies as “filtered.” I wonder how much that sliver adds to the price. $50 grand? $100 grand?
I love the language real estate hucksters use to describe these listings: “Amazingly charming,” “elegant,” “incredible views,” and “breathtaking privacy.” I suppose that “breathtaking privacy” means you can run around the backyard naked or take a long, satisfying piss off the deck without fear that your neighbors will call the cops.
I hate to sound like a warped CD, but this country has lost its moorings. I read a report on wealth in America the other day that noted that in 1985 there were 13 billionaires in the country; today there are more than 1,000. The Bush Administration takes that news as a sign of a robust economy. The reality is different, and slowly, grudgingly, even the corporate-controlled media is beginning to notice.
For a generation now, official government tax and monetary policy has sought to shift wealth from the middle to the top. The ideological underpinning for this policy asserted that society’s investors and risk-takers deserved the spoils. This ideology also asserted that everyone would benefit from unfettered capitalism because some wealth would “trickle” down to the working masses.
Well, if you’re an average working person and feel like you’ve been taking a long golden shower, you’re not alone. Welcome to the new Gilded Age. The rich are richer than ever, the yacht building business is strong, corporate profits are high – and the rest of us are scrounging under the sofa cushions for loose change, shopping at Wal-Mart, and eating off the dollar menu at Taco Bell.
We are Brazil. Through inattention, ignorance, and gullibility, we have driven a stake through the heart of the American Dream. We swallowed the fables, lies, and bullshit fed us by the money changers. They told us that we too could sit at their bountiful table, and all the while they were conspiring to keep us out of the dining room.
I miss the American Dream. To me it never promised riches; instead it promised that my hard work would net me and my family a comfortable, decent life. There might not be plenty, but there would be enough.
Home foreclosures are running at a record pace, but here on the Platinum Coast, real estate prices remain high. Not too far from where we live there’s a “charming” 2BD/1BA cottage listing for a mere $879,000. According to the ad, the price was recently “reduced.”
Who can afford an $879,000 home? Doctor, lawyer, Indian chief…drug dealer? The question baffles. I notice a number of homes above the million dollar mark – older tract homes that have been renovated, one such with “filtered” views of the ocean. I guess if you can see a tiny sliver of ocean through a stand of eucalyptus trees that qualifies as “filtered.” I wonder how much that sliver adds to the price. $50 grand? $100 grand?
I love the language real estate hucksters use to describe these listings: “Amazingly charming,” “elegant,” “incredible views,” and “breathtaking privacy.” I suppose that “breathtaking privacy” means you can run around the backyard naked or take a long, satisfying piss off the deck without fear that your neighbors will call the cops.
I hate to sound like a warped CD, but this country has lost its moorings. I read a report on wealth in America the other day that noted that in 1985 there were 13 billionaires in the country; today there are more than 1,000. The Bush Administration takes that news as a sign of a robust economy. The reality is different, and slowly, grudgingly, even the corporate-controlled media is beginning to notice.
For a generation now, official government tax and monetary policy has sought to shift wealth from the middle to the top. The ideological underpinning for this policy asserted that society’s investors and risk-takers deserved the spoils. This ideology also asserted that everyone would benefit from unfettered capitalism because some wealth would “trickle” down to the working masses.
Well, if you’re an average working person and feel like you’ve been taking a long golden shower, you’re not alone. Welcome to the new Gilded Age. The rich are richer than ever, the yacht building business is strong, corporate profits are high – and the rest of us are scrounging under the sofa cushions for loose change, shopping at Wal-Mart, and eating off the dollar menu at Taco Bell.
We are Brazil. Through inattention, ignorance, and gullibility, we have driven a stake through the heart of the American Dream. We swallowed the fables, lies, and bullshit fed us by the money changers. They told us that we too could sit at their bountiful table, and all the while they were conspiring to keep us out of the dining room.
I miss the American Dream. To me it never promised riches; instead it promised that my hard work would net me and my family a comfortable, decent life. There might not be plenty, but there would be enough.
Monday, August 20, 2007
There & Back Again
Through the Looking Glass, down the Rabbit Hole, and deep into the Belly of the Beast.
Or some such.
Around here, this will be remembered as the Summer of Ash, as the Zaca Fire continues to burn – 100,000 acres and counting. Total containment still weeks away. Smoke and ash turn the sun red, the light pink, and make the air hazardous to breathe. It’s a glimpse of what the end of the world might look like.
Do or Die time for my Yankees. They took three of four from the slumping Tigers over the weekend, at home, but now pack their bags and head west, for three games with Anaheim, a team that has always given them fits; then it’s on to Detroit for four; then home for a series with the hated Red Sox. Against sub-.500 teams with mediocre pitching the Yanks gorge; against elite teams with strong pitching staffs, they nibble. They’re up against the elite of the American League now. The Yanks win a lot of blow-out games and lose many close games for a simple reason: they don’t have the pitching to hold other teams down. Quality starts by Mussina and Wang and Pettitte are undone by the likes of Luis Vizcaino and Kyle Farnsworth, big, hard-throwing guys who frequently lose the strike zone.
Looks like real people are beginning to worry about the mortgage industry meltdown, the lead edge of what might become a widespread freak-out. Countrywide’s stock is in the toilet and the company had to borrow billions to make sure it can meet its obligations. The Asian stock market is still jittery. In the US, the Federal Reserve lowered the discount rate and effectively pumped money into the system, quelling fears, at least temporarily, that the mortgage collapse might spread to the greater economy.
Let’s see if we can sort this mess out, even in the most rudimentary way. Real estate took off but the wages for most workers remained flat. As home prices soared upwards, seemingly without end in some parts of the country, qualified applicants for traditional mortgages with large down payment requirements and fixed interest rates became too scarce to keep the boom rocking and rolling. Finance industry wizards put on their thinking caps and came up with sub-prime mortgages -- no money down, no income verification, interest-only teasers, adjustable rates…It was mortgage nirvana, profitable as all get out. Suddenly, millions of folks who were priced out of the boom had a way to get in on the fun.
The lust for gain makes people do weird things. Otherwise intelligent people honestly believed that real estate would continue to appreciate every year by double-digit rates, particularly in desirable areas like Santa Barbara. While this community may not be affected nearly as much as some California cities and counties, I have to believe there will be some fall-out. At the height of the price run-up, when owners and real estate agents were delirious and cocky, I never understood how people could afford million dollar tract houses. Where did the dough come from, what kind of jobs did these lucky folks hold, how did they crack the nut month after month? It was alien to me, another universe into which my annual salary allowed not even a glimpse.
The next President of the United States, whoever he or she may be, from either party, is going to inherit a helluva mess – the Iraq entanglement, an economy with serious structural flaws, a health care system that excludes millions, a crushing dependency on foreign oil. The outlook is so dismal that it’s a wonder any sane person wants the damn job. That a number of people do is testament to the power of political ambition. The United States is an empire in decline, holding, for the time being, its position among nations due to the strength of its military, rather than any ethical, economic, humanitarian or moral hegemony.
Or some such.
Around here, this will be remembered as the Summer of Ash, as the Zaca Fire continues to burn – 100,000 acres and counting. Total containment still weeks away. Smoke and ash turn the sun red, the light pink, and make the air hazardous to breathe. It’s a glimpse of what the end of the world might look like.
Do or Die time for my Yankees. They took three of four from the slumping Tigers over the weekend, at home, but now pack their bags and head west, for three games with Anaheim, a team that has always given them fits; then it’s on to Detroit for four; then home for a series with the hated Red Sox. Against sub-.500 teams with mediocre pitching the Yanks gorge; against elite teams with strong pitching staffs, they nibble. They’re up against the elite of the American League now. The Yanks win a lot of blow-out games and lose many close games for a simple reason: they don’t have the pitching to hold other teams down. Quality starts by Mussina and Wang and Pettitte are undone by the likes of Luis Vizcaino and Kyle Farnsworth, big, hard-throwing guys who frequently lose the strike zone.
Looks like real people are beginning to worry about the mortgage industry meltdown, the lead edge of what might become a widespread freak-out. Countrywide’s stock is in the toilet and the company had to borrow billions to make sure it can meet its obligations. The Asian stock market is still jittery. In the US, the Federal Reserve lowered the discount rate and effectively pumped money into the system, quelling fears, at least temporarily, that the mortgage collapse might spread to the greater economy.
Let’s see if we can sort this mess out, even in the most rudimentary way. Real estate took off but the wages for most workers remained flat. As home prices soared upwards, seemingly without end in some parts of the country, qualified applicants for traditional mortgages with large down payment requirements and fixed interest rates became too scarce to keep the boom rocking and rolling. Finance industry wizards put on their thinking caps and came up with sub-prime mortgages -- no money down, no income verification, interest-only teasers, adjustable rates…It was mortgage nirvana, profitable as all get out. Suddenly, millions of folks who were priced out of the boom had a way to get in on the fun.
The lust for gain makes people do weird things. Otherwise intelligent people honestly believed that real estate would continue to appreciate every year by double-digit rates, particularly in desirable areas like Santa Barbara. While this community may not be affected nearly as much as some California cities and counties, I have to believe there will be some fall-out. At the height of the price run-up, when owners and real estate agents were delirious and cocky, I never understood how people could afford million dollar tract houses. Where did the dough come from, what kind of jobs did these lucky folks hold, how did they crack the nut month after month? It was alien to me, another universe into which my annual salary allowed not even a glimpse.
The next President of the United States, whoever he or she may be, from either party, is going to inherit a helluva mess – the Iraq entanglement, an economy with serious structural flaws, a health care system that excludes millions, a crushing dependency on foreign oil. The outlook is so dismal that it’s a wonder any sane person wants the damn job. That a number of people do is testament to the power of political ambition. The United States is an empire in decline, holding, for the time being, its position among nations due to the strength of its military, rather than any ethical, economic, humanitarian or moral hegemony.
Monday, August 13, 2007
HERE COMES THE BAILOUT
The Stray Cats and the Pretenders are playing the County Bowl tonight, and right now, as the baby boomer crowd streams in, a band I’ve never heard of is warming up the folks, getting them primed for the main acts.
The American economy is primed as well – for an ugly fall that might finally expose the foot-wide cracks in its foundations. The stock market plummeted yesterday amidst worries about the meltdown in the sub-prime mortgage market. The news reverberated from Asia to Europe. President Bush wrote the sharp decline off to feckless borrowers – rather than the predatory, not to mention shoddy, business practices of lenders. When a lender grants a huge mortgage without verifying that the borrower has the capacity to pay it back, should we condemn the lender or the borrower? In our ass-backwards nation, where Capital is provided every advantage and given the benefit of the doubt at every turn, we naturally blame the borrower.
The real estate boom of the last ten years drove housing prices higher than the majority of buyers could afford. Traditional mortgages got chucked out the window and mortgage “creativity” was born. And why not? This is America, Inc., the “free” market is our true religion, and money is our God, so why shouldn’t buyers with less-than-sterling credit get in on the boom? Fuck FICO scores, income verification and all that logical shit – just get in the game by any means necessary and grab your share of booty.
When the sub-prime scheme was diagrammed on a white board in a big corner office of a tall office building it made perfect sense. Real estate was red hot, money was cheap, and average folks were panting for homes. It was beautiful. Home ownership for everyone – even if they can’t afford it. Here was American Capitalism at its finest, the great entrepreneurial spirit that Conservatives are always crowing about in action, creating and dispersing the spoils to our best and brightest and most highly deserving citizens.
The regulatory agencies that should have been monitoring these shenanigans were taking a forced siesta, their budgets gutted, their powers retarded. Conservatives assure us that Business can police itself and that the titans of industry can be relied upon to keep one another honest. And it goes without saying that the titans and moguls and Wall Street princes keep the public good uppermost in mind…
Sure, and four-hundred pound sows will sprout wings any day now and fly like falcons. If something looks, feels, sounds or smells too good to be true, it probably is.
Sooner rather than later, Wall Street and the big mortgage lenders will run, sobbing and moaning, to the Government for “temporary” assistance and relief from all those feckless borrowers. Yes, the titans and moguls who preach self-reliance at every turn, who preach the fairness and efficiency of the Market, who preach the evils of Big Government, will run to Government with their hands out -- and the Government -- devoted servant of the special interests who own it, will put on a public relations blitz about protecting the American economy from recession, blah, blah, blah. The talking heads on Fox and Conservative radio will echo the message and ignore the hypocrisy, and even little Katie Couric will repeat the party line word for word…
Yeah, I can see it coming because I’ve seen it before. The way this country is wired, we can always afford wars and taxpayer-funded bailouts for wayward financial institutions.
The American economy is primed as well – for an ugly fall that might finally expose the foot-wide cracks in its foundations. The stock market plummeted yesterday amidst worries about the meltdown in the sub-prime mortgage market. The news reverberated from Asia to Europe. President Bush wrote the sharp decline off to feckless borrowers – rather than the predatory, not to mention shoddy, business practices of lenders. When a lender grants a huge mortgage without verifying that the borrower has the capacity to pay it back, should we condemn the lender or the borrower? In our ass-backwards nation, where Capital is provided every advantage and given the benefit of the doubt at every turn, we naturally blame the borrower.
The real estate boom of the last ten years drove housing prices higher than the majority of buyers could afford. Traditional mortgages got chucked out the window and mortgage “creativity” was born. And why not? This is America, Inc., the “free” market is our true religion, and money is our God, so why shouldn’t buyers with less-than-sterling credit get in on the boom? Fuck FICO scores, income verification and all that logical shit – just get in the game by any means necessary and grab your share of booty.
When the sub-prime scheme was diagrammed on a white board in a big corner office of a tall office building it made perfect sense. Real estate was red hot, money was cheap, and average folks were panting for homes. It was beautiful. Home ownership for everyone – even if they can’t afford it. Here was American Capitalism at its finest, the great entrepreneurial spirit that Conservatives are always crowing about in action, creating and dispersing the spoils to our best and brightest and most highly deserving citizens.
The regulatory agencies that should have been monitoring these shenanigans were taking a forced siesta, their budgets gutted, their powers retarded. Conservatives assure us that Business can police itself and that the titans of industry can be relied upon to keep one another honest. And it goes without saying that the titans and moguls and Wall Street princes keep the public good uppermost in mind…
Sure, and four-hundred pound sows will sprout wings any day now and fly like falcons. If something looks, feels, sounds or smells too good to be true, it probably is.
Sooner rather than later, Wall Street and the big mortgage lenders will run, sobbing and moaning, to the Government for “temporary” assistance and relief from all those feckless borrowers. Yes, the titans and moguls who preach self-reliance at every turn, who preach the fairness and efficiency of the Market, who preach the evils of Big Government, will run to Government with their hands out -- and the Government -- devoted servant of the special interests who own it, will put on a public relations blitz about protecting the American economy from recession, blah, blah, blah. The talking heads on Fox and Conservative radio will echo the message and ignore the hypocrisy, and even little Katie Couric will repeat the party line word for word…
Yeah, I can see it coming because I’ve seen it before. The way this country is wired, we can always afford wars and taxpayer-funded bailouts for wayward financial institutions.
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