Tuesday, February 28, 2012

Homes, jobs and a future

Washington has failed us: Where to turn?

By Mike Krauss
Bucks County Courier Times

Home ownership has been the defining characteristic of the American middle class. It has been the basis of physical and economic security; and in turn, the foundation of a stable society.

According to Realty Trac, the trade group most often cited in news reports, in 2006 there were about 267,000 home foreclosures in the United States. In 2007 the number jumped to 405,000. In 2008 it soared to 2.2 million. In 2009, 2.8 million foreclosures were reported; and in 2010, 2.9 million.

Last year the number dropped to 2.6 million as the banks held off on foreclosures while they negotiated a deal with the administration to pardon the colossal fraud in the industry.

But now that the administration has given the biggest banks and their executives a “get-out-of-jail-free” deal, industry experts forecast another tidal wave of foreclosures in 2012. The AP reports that more than 12 million mortgages in the U.S. are now “underwater.”

Let’s say the number of foreclosures for 2012 comes in at “only” at 3 million. That means that in the five years, 2008-2012, 13.5 million homes will have been foreclosed.

On the assumption that most of these were not the homes of individuals, but of families — say two adults and one child — that means that even by this conservative estimate, 40.5 million Americans will have lost their homes over the past five years.

The American middle class is being destroyed.

The deal with the banks heralded by the administration is hopelessly inadequate to the dimension of the need. Only one million out of the 12 million whose mortgages are underwater today may receive a $25,000 reduction in the principal of their loan. And perhaps 750,000 who have already lost their homes will get a check for $2,000.

As one commentator observed, it is as if someone stole your car, and offered to give back the hubcaps.

It is rapacious. And it is virtually unopposed by the nation’s political elite. For example, the GOP candidates for president have met the deal with — silence. Why?

For the same reason all the talk of jobs in 2008 faded with the election. Our federal elections are a sham. The White House and the Congress are for sale.

Until 2010, there were some restraints on the selling and buying of elections. The maximum amount one person could give to a candidate was $2,500; to a political action committee, $5,000, and for a political party committee, $30,800.

But with its high regard for “free speech,” the U.S. Supreme Court ruled that for the new “Super Pacs” and other so called “civic leagues or organizations not organized for profit,” there is no limit to what one person can contribute; and more, the contribution may be kept secret.

The big money started to flow. The price tag for federal elections (president and Congress) in 2008 was about $5 billion. Watchdog groups estimate the price for 2012 at $7 billion.

Do you actually believe that “small donors” in a nation in which 40.5 million people have recently lost their home and millions can find no work are going to provide that kind of money?

It will come from people like the corporate take-over specialist who has contributed $12 million to a GOP Super Pac, and the casino owner who has ponied up $10 million for Newt Gingrich, so far.

Who will the elected then represent? The same people they do now: the less than 1 percent. And what will those they represent get for their money?


More indifference to the unemployed and the homeless, the ill-fed, ill clothed and just plain ill; more ill-advised and fruitless (but money making) military adventures, more license to cheat buyers and investors, and more of what the 1 percent already have in abundance: physical and economic security, and opportunity.

The world will be their oyster.

At the same time, the one third of American young people who do not graduate high school, the one third who graduate with no useful skills, and a generation of college graduates already saddled with huge debt will be lucky to get a job, shucking oysters in the swell restaurants where the 1 percent dine.

There is only one way for the American middle class to begin to take back our democracy and recover its stolen prosperity. People must be put back to work and back in homes.

Homes and jobs will provide the initial relief from the physical and economic insecurity that now afflict tens of millions of Americans, and give the nation an opening to the future.

But don’t look to Washington, Congress or the president for help. To one degree or another, they have all bought into more subsidies for business as a way to “stimulate” the private sector and jobs creation, and a sweetheart deal for the banks that will do nothing to deal with homelessness, and has sold out justice.

The key to the future is local housing initiatives and jobs creation on a heroic scale; to unlock the diversity, talent, industry and faith of the American people.

Washington has failed the American people, and will go on failing for the foreseeable future. Time to look elsewhere.

Friday, February 17, 2012

A Real Political Party?

Serving Wall Street and the 1 percent

By Mike Krauss
Bucks County Courier Times

In an agonizingly disingenuous oped, New York Times columnist Thomas Friedman recently made the case that America urgently needs a “second” political party.

His argument is that the GOP has become so “captive to conflicting ideological bases” that there can be no agreement on basic policy issues within the party that is sufficient to form a majority with which the Democrats — a “real” political party — can do the nation’s business.

Here “we” are, Friedman worried, six months from the GOP nominating convention, and still no agreement on its candidate for president. A real political party, Friedman suggests, would be like the Democrats and have these things settled by now.


How did the Democrats achieve the unity and cohesion that Friedman implies? Beginning with Bill Clinton, by subordinating every constituency in the party to a policy of abject servitude to what once was one of many voices in the party, and now is the only voice the administration and Democrats in Congress represent: the profits of Wall Street and the welfare of the 1 percent.

The Democrats are themselves no longer a political party, but merely a unit in Wall Street’s business model, fitting into the organizational chart somewhere below the Federal Reserve and above the Congress, like an accounts payable department, dispersing a share of the profits to the politicians and pundits on the payroll.

Now, there is no denying that the GOP has become a sorry excuse for a political party, its candidates lost in a bidding war for its 1 percent: the increasingly few, anxious and older voters who dominate the early primaries and caucuses.

But today most Americans have little interest in a dog fight over abortion, gay marriage, candidates’ marital infidelities or where the capitol of Israel should be, and so take no part in that process.

Making a living and keeping their families out of the poor house now takes up most of the time of the middle class that is the former majority of the GOP. (Actually, for millions of Americans, the streets and not the poor house are increasingly the only option to hanging on.)

And the GOP primary process is of no interest to them. But what Friedman avoids is that large numbers of Democrats have no interest in “their” party’s nominating process.

There is huge unhappiness with Mr. Obama’s policies throughout the Democratic Party. And his nomination is assured only because his Wall Street and special interest patrons — energy, defense, the national security industry, health care and the rest — are rewarding his service with massive campaign contributions and the promise of more.

So like the former middle class majority of the GOP, the former middle class majority of the Democrats figure — why bother?

And this produces apologists like Friedman who pretend that what is wrong with our politics is well funded pitchmen in the GOP, fawning over a handful of voters, as opposed to the bought bag men in both parties doing the bidding of the crowd that can pony up individual contributions of the tens of millions of dollars, to serve those Americans who can pony up tens of millions of dollars.

And it allows Friedman to get away with an utterly unimportant litany of what is wrong with America. And here is his list.

No. 1: a failure to prepare America for the competition between “high imagination enabling” and “low imagination enabling” countries (“HIEs” and “LIEs”).

Yeah, that keeps me up at night.

No. 2: debt and entitlements.

The debt is the price tag of unending war and an obsession with projecting American power — as opposed to American beliefs — and the entitlements are corporate subsidies.

No. 3: The need to find energy in a way that does not destroy the environment.

OK, we can agree on that. Of course, even a stopped clock is right twice a day.

But are any of these more important at this time than jobs, homes, a decent diet, health care and education, and a measure of economic security for the many millions of Americans who lack some or all of these?

Are Friedman’s priorities more urgent than reviving a belief that justice still matters in this nation?

Only if you are a very well-to-do, expense-account-supported columnist for the New York Times whose world view is bounded by the East and Hudson rivers.

So Friedman disingenuously points to the failure of the GOP to find a partner with whom the Democrats can do business, to address his list of pressing long-term challenges, while ignoring completely the present dire circumstance of tens of millions of struggling Americans in every class but the 1 percent.

There is a long shot developing in the GOP primary circus, but not so long as it was six months ago, and it is possible that the GOP may get to its convention with no candidate having the nomination locked up.

If that happens, there is a chance for a “brokered” convention, meaning the delegates will do what they used to, and in a democratic process these elected representatives of the GOP rank and file will nominate someone who can represent the broad majority of those needed to both win the presidency and lead the nation in an attack on the urgent problems of the people.

Then the American people might see a real political party once again.

Friday, February 3, 2012

Democracy Under Assault

The Austerity Gulag

By Mike Krauss
Bucks County Courier Times

Almost 70 years after the victory of democracy in Western Europe, and two decades after Eastern Europe loosed itself from the grip of Soviet totalitarianism, the people of the continent are threatened by another assault on self-government.

But no foreign army threatens their hard won rights or prosperity. The threat instead is the far smaller but equally menacing army of the global banking cartel — the parasites in pinstripes.

The prime ministers of both Italy and Greece are bankers, appointed not elected, and put in power by the threat of the cartel: that it will withhold credit and plunge those nations into social chaos unless they pay off existing credit — and plunge themselves into social chaos. These are debts the cartel encouraged and facilitated.

Understandably, Europeans are resisting because they know that if the debt — mostly the debt service (interest) — is paid in the manner being demanded by the cartel, their economies will be destroyed. There will simply be no tax revenue or asset income for the productive purposes that grow economies and sustain vital public services.

“Austerity” is the seemingly virtuous sounding word preferred by the cartel, technocrats, compliant politicians and much of the media to describe a policy that is in fact the impoverishment of the people and their subjugation by the cartel — the global less than 1 percent.

A general strike in Belgium, the first in 20 years and timed for a meeting of European finance ministers — a who’s who of Goldman Sachs alumni — tied up the capitol and major port earlier this week. It is just the beginning.

In one of history’s ironies, the conflict is coming to a head in Greece; the nation where school children are taught (or were taught) democracy was born.

To be sure, in ancient Greece democracy was more of a concept than the practice. Then as now political power flowed from wealth, and wealth in ancient Greece was expressed primarily in land, so the actual practice of democracy was limited to landowners who had the means to arm their families and workers to defend their city.

But the ancient commodity-based economies of land, and the gold, silver or precious jewels it produced — the foundation of the inherited wealth still enjoyed by European aristocracy — were inadequate to provide the expanding economic opportunity that the people of emerging democratic nations demanded as their right.

Short of the murder of the aristocracy and confiscation of their property and wealth — the French and Soviet model — the emerging democracies of the West found another way to let the common people in on the wealth.

Credit. In modern economies, credit replaced land and commodity-based currency as the key to creating prosperity and wealth, to satisfy the growing awareness of the common people of their “inalienable” rights.

With affordable and available credit, the common person has the opportunity to invest in his or her life and that of the family to create some prosperity and build some wealth.

But now credit and the wealth it generates is controlled in the United States and European democracies by the few, the Wall Street-led global banking cartel. Control of credit has become so absolute that a private banking monopoly — the issuers of credit — can topple governments it can’t otherwise buy or bully, and demand the extraction of what wealth remains among the common people — homes, savings, pensions, health care, police services, adequate diet, education and jobs.

The Guardian newspaper calls the impact on European youth “devastating.” In Greece, 43 percent of those between the ages of 16 and 24 are jobless; in Italy more than a quarter (28 percent). In Spain the figure is a shocking 51.4 percent.

And young Americans, who unlike their European counterparts are in many cases saddled with huge debt for their education, are not faring much better.

A truly lost generation, or as one reader of this column put it, the “Austerity Gulag,” consigned to an economic detention center from which they may never emerge.

Such is the control of credit today in the Western democracies that the U.S. Federal Reserve can dole our many trillions of dollars of almost no-cost credit to a handful of U.S. and foreign banks, and stand by shedding crocodile tears as Main Street — your street — disintegrates.

Is there a way to take back democracy short of the looming civil strife on both sides of the Atlantic? Yes. Take control of credit.

But don’t look for a bought Washington to lead that charge in the U.S. Look to the states, counties and cities for the restoration of credit as a public utility, and not a private monopoly, and an end to the serial abuses of Wall Street and Washington.