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Robert Scheer
Robert Scheer
12 Mar 2014
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Halfway Through the Lost Decade

Comment

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.

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.

Robert Scheer is editor of TruthDig.com, where this column originally appeared. Email him at rscheer@truthdig.com. To find out more about Robert Scheer and to read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Webpage at www.creators.com.

COPYRIGHT 2012 CREATORS.COM



Comments

3 Comments | Post Comment
You have stated what I and many others have consistently been saying on this forum. We know Obama failed in many areas, most especially in believing Congress loved this country and people more than they despised him. He was dealt what might have been a winning hand, but when he took office and looked at the 'flop', realized the enormity of the damage caused by the Bush/Cheney years. Doing what he could with a Democratic congress that was itself divided, some wanted another Clinton in office, he had no support even from his own. But as you say, he didn't blame the victims of the Bush/Cheney years. Romney and many conservatives did and still do.
I wait with great interest to read the comments of those conservatives who argue against what we said and what you say. Their tactic is not actually arguing, it's more head in the sand, wishful thinking, while blaming everything on President Obama.
Comment: #1
Posted by: Steve
Sun Apr 29, 2012 8:25 AM
Great in-your-face, tell-it-like-it-is article. Sheer creates a sense of urgency for the nations problems that are not fully addressed by the MSM. He has no problems pointing fingers at the banks and politicians involved. Sure some people bought houses they could not afford, but lets also point fingers at predatory banks and things like sub-prime morgages. Also, there are many people who entered into resonable and fair morgages by banks, only to see their home values sink way down.
Comment: #2
Posted by: Chris McCoy
Mon Apr 30, 2012 9:10 AM
Sorry Steve, but I doubt you're going to get the conservative responses you hoped for. In my opinion Sheer is one of the best and under-read authors on this site. I'm pretty much the only one who comments on his articles, but it is nice to read your comment and be reminded that despite our many differances, we actually share some common ground sometimes.
Comment: #3
Posted by: Chris McCoy
Mon Apr 30, 2012 5:16 PM
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