Robert Scheer tells it like it was and is:
Bill Clinton bears as much responsibility as any politician for the worst economic crisis since the Great Depression, and the wild applause for his disingenuous speech at the Democratic National Convention last week is a sure sign of the poverty of what passes for progressive politics…
I was complaining to a friend who is part of the D.C. consultancy class (although not the rich part). “What is it with all this crap about the middle class?” I said. “No one in that entire convention talked about the poor or the working class.” My friend said that poor people preferred to think of themselves as middle class, even when they’re not, and that it probably polled better.
“Really?” I said, surprised. “Because I don’t know many people who still describe themselves as middle class. I know a lot of people who describe themselves as poor.” This Pew survey bears out my impression:
The percentage of Americans who say they are in the lower-middle or lower class has risen from a quarter of the adult population to about a third in the past four years, according to a national survey of 2,508 adults by the Pew Research Center.
Not only has the lower class grown, but its demographic profile also has shifted. People younger than 30 are disproportionately swelling the ranks of the self-defined lower classes.1 The shares of Hispanics and whites who place themselves in the lower class also are growing.
Among blacks, the story is different. The share of blacks in the lower class has not changed in four years, one of the few demographic groups in which the proportion in the lower classes did not grow. As a consequence, a virtually identical share of blacks (33%) and whites (31%) now say they are in the lower class.
When it comes to political affiliation, more Democrats than Republicans place themselves in the lower classes, but Republicans saw a sharper rise over the past four years. Some 23% now call themselves lower class, up from 13% in 2008. Among Democrats, 33% now call themselves lower class, compared with 29% in 2008.
The survey finds that hard times have been particularly hard on the lower class. Eight-in-ten adults (84%) in the lower classes say they had to cut back spending in the past year because money was tight, compared with 62% who say they are middle class and 41% who say they are in the upper classes. Those in the lower classes also say they are less happy and less healthy, and the stress they report experiencing is more than other adults.
As they look to their own future and that of their children, many in the lower class see their prospects dimming. About three-quarters (77%) say it’s harder now to get ahead than it was 10 years ago. Only half (51%) say that hard work brings success, a view expressed by overwhelming majorities of those in the middle (67%) and upper classes (71%). While the expectation that each new generation will surpass their parents is a central tenet of the American Dream, those lower classes are significantly more likely than middle or upper-class adults to believe their children will have a worse standard of living than they do.
I know you will be as shocked as I am:
Just how many more people could have qualified under the administration’s mortgage modification program if the banks had done a better job? In other words, how many people have been pushed toward foreclosure unnecessarily?
A thorough study released last week provides one number, and it’s a big one: about 800,000 homeowners.
The study’s authors — from the Federal Reserve Bank of Chicago, the government’s Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago — arrived at this conclusion by analyzing a vast data set available to the OCC. They wanted to measure the impact of HAMP, the government’s main foreclosure prevention program.
What they found was that certain banks were far better at modifying loans than others. The reasons for the difference, they established, were pretty predictable: The banks that were better at helping homeowners avoid foreclosure had staff who were both more numerous and better trained.
Unfortunately for homeowners, most mortgages are handled by banks that haven’t been properly staffed and thus have modified far fewer loans. If these worse-performing banks had simply modified loans at the same pace as their better performing peers, then HAMP would have produced about 800,000 more modifications. Instead of about 1.2 million modifications by the end of this year, HAMP would have resulted in about 2 million.
That’s still well short of the 3-4 million modifications President Obama promised when he announced the program back in early 2009. But it’s a big difference, and a reasonable, basic benchmark against which to compare the program’s failings.
The report does not identify these poor performing banks, but it’s not hard to ID them. A “few large servicers [have offered] modifications at half the rate of others,” the authors say. The largest mortgage servicers are Bank of America, JPMorgan Chase, Wells Fargo and Citi.
Bank of America in particular (the largest of all the servicers when HAMP launched) has been far slower to modify loans than even the other large servicers, as other analyses we’ve cited haveshown.
I’ve been noticing a trend in the past week: Whenever anyone brings up the “Are you better off than you were four years ago?” question, Democrats sidestep instead of confronting it. They say the question isn’t fair, and say how much worse things would have been without the stimulus. Their responses have the effect of being accurate – without exactly being true. Because while the economic numbers that politicians like to use – things like the GDP, new employment, etc. – are an accurate reflection of the things the investor class likes to know, they don’t begin to express the real economic pain and the resulting class chasm. You can’t tell people they’re better off when they’re not.
And that attitude ignores stories like this:
While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project.
Or stories like this:
According to the Economic Policy Institute, almost 30% of American workers are expected to hold low-wage jobs – defined as earnings at or below the poverty line to support a family of four – in 2020. This number will remain virtually unchanged from 2010. Given that roughly 50% of recent college grads are unemployed or underemployed and those who do work are much more likely to hold these types of jobs, this is a particular grim prospect for young workers hoping to leave these positions behind for greener career pastures.
And how about all those people who lost the value of their homes, lost that equity, lost their jobs and are floundering in the wake of the mortgage foreclosure crisis? Here’s Neal Barofsky:
[…] Treasury Secretary Timothy Geithner, using the same justifications now offered by DeMarco, consistently blocked efforts to use TARP funds already designated for homeowner relief through a principal reduction program that could have a meaningful impact on the overall economy.
For example, in 2009, $50 billion in TARP funds had been committed to help homeowners through the Home Affordable Modification Program (HAMP), a program that the president announced was intended to help up to 4 million struggling families stay in their homes through sustainable mortgage modifications. Hundreds of billions more were still available and could have been used by the White House and the Treasury Department to help support a massive reduction in mortgage debt. But Geithner avoided this path to a housing recovery, explaining that he believed it would be “dramatically more expensive for the American taxpayer, harder to justify, [and] create much greater risk of unfairness.” Treasury amplified that argument in 2010, after it reluctantly instituted a weak principal reduction program in response to overwhelming congressional pressure. That program incongruously left it to the largely bank-owned mortgage servicers (and to Fannie and Freddie) to determine if such relief would be implemented. In response to our criticism that the conflicts of interest baked into the program would render it ineffective unless principal reduction was made mandatory (when in the best interests of the holder of the loan), Treasury reinforced Geithner’s early statements, refusing to do so primarily because of fears of a lurking danger: the ”moral hazard of strategic default.” The message was clear: No way, no how would Treasury require principal reduction, even when Treasury’s analysis indicated it would be in the best interest of the owner, investor or guarantor of the mortgage.
How do we turn out the vote until the Obama administration openly acknowledges these conditions, those mistakes? If an ER doctor ordered the wrong dosage of antibiotics, and your child’s infection grew life-threatening as a result, wouldn’t you want, at the very least, an apology? Because that’s what the administration did. They pushed an inadequate stimulus, they put bankers before voters, and they made things worse than they have to be. And we’re still dealing with effects of long-term unemployment without help.
Instead, we get lofty lectures about the deficit. “Skin in the game”. “Shared sacrifice.”
In my home state, Pennsylvania, Republican Governor Tom Corbett is cutting off general assistance funds, which normally help the mentally handicapped survive. He’s cutting the monthly food stamp allotment for a single person from about $190 to $33. Imagine. And the food banks are already spread too thin.
In my neighborhood, bars are holding “unemployment happy hours” — at 8 a.m.
The streets are cleaner than ever, because people are fighting each other to pick up the scrap metal and aluminum cans to sell.
And then we’re lectured about having “skin in the game”?
There is pain out here, and fear. They’re skeptical. If President Obama wants to get these people out there to vote for him in November, he needs to tell people what he did wrong — and how he’s going to fix it.
He needs to be a populist Democrat who’s on the side of working people. And if he doesn’t do those things, he may as well resign himself to being a one-term president.
It’s just astonishing to us how long this campaign has gone on with no discussion of what’s happening to poor people. Official Washington continues to see poverty with tunnel vision – “out of sight, out of mind.”
And we’re not speaking just of Paul Ryan and his Draconian budget plan or Mitt Romney and their fellow Republicans. Tipping their hats to America’s impoverished while themselves seeking handouts from billionaires and corporations is a bad habit that includes President Obama, who of all people should know better.
Go read the rest.
From The Raw Story, another reminder of how oblivious the Federal Reserve is to the human cost of America’s ongoing economic disaster:
Policy makers at the US Federal Reserve are leaning toward more stimulus action “fairly soon” unless economic data turns around, minutes from their meeting three weeks ago showed Wednesday.
The minutes revealed most members of the Federal Open Market Committee were concerned about slowing growth and the vulnerability of the economy to external threats, particularly economic instability in Europe.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” the record of the July 31-August 1 FOMC meeting said.
“A number of members noted that if the recent modest rate of economic growth were to persist, the economy would be less able to weather a material adverse shock without slipping back into recession,” it added.
I’m picturing a ship’s captain receiving an SOS from an ocean liner whose thousands of passengers will drown without immediate aid. The captain responds, Ben Bernanke-style: “We’ll get there fairly soon. Meanwhile, just tread water and keep your chin up.”
Barack Obama is saying the right things regarding the vital role government can play in creating jobs but, as Bill Boyarsky noted, he is still offering next to nothing in the way of job creation plans:
…The rhetoric of the campaign and the coverage by political journalists don’t deal with the subject except in the context of the back-and-forth insults that have marked this contest. For example, last month Obama, talking about why the rich should pay their fair share of taxes, stated the obvious: “If you were successful, somebody along the line gave you some help. … The Internet didn’t get invented on its own. Government research created the Internet … when we succeed, we succeed because of our individual initiative, but also because we do things together.”
Any successful entrepreneur with a restaurant or retail operation on an interstate highway would probably agree. But Romney picked it up as more evidence of Obama’s rejection of the national entrepreneurial spirit. “It shows how out of touch he is with the character of America,” Romney said. Obama isn’t out of touch with the American character. But the negativity of his unrelenting attacks against Romney puts him out of touch with the main American need—specific ways of lowering the unemployment rate…
I have no problem with Obama’s attacks on Mittens — a job-destroying corporate raider when he wasn’t in politics — but I’m appalled that his campaign speeches thus far are just sound and fury, signifying total indifference to the long-term unemployed and underemployed.
The Washington, D.C., establishment continues to demonstrate its indifference to the unemployment crisis, and the mainstream media is all too happy to ignore the problem, too. From Jonathan Chait:
Good news! The economy added 163,000 jobs last month, just a bit over the level required to keep up with population growth. A return to a free fall now seems less likely. On the other hand, there is the small footnote that the return to full employment is nowhere in sight. The recovery looks safe for those of us who are not already screwed. That, sadly, has come to be the primary focus of our economic policy.
In the years since the collapse of 2008, the existence of mass unemployment has stopped being something the economic powers that be even pretend to regard as a crisis. To those directly impacted, the economic crisis is an emergency, a life-altering disaster the damage from which will endure for years. But most of those in a position to address it simply have not seen it in such terms. History will record that the economic elite has viewed the economic crisis from a perspective of detached complacency…
Unemployment didn’t get worse, which is what counts for a win with your political elite. Yay!
