STILL SQUANDERING AMERICA

“Until our political leaders put the safety of the economy ahead of narrow financial interests, we will remain at severe systemic risk.” — Robert Kuttner, The Squandering of America

I started blogging in the summer of 2008 for SHELTERFORCE’s ROOFLINES. Seven years ago this month on August 25, 2008, I posted Investing in Communities Key to Obamanomics. The above quote from Bob Kuttner, staff in 1975 for U.S Senator William Proxmire, was certainly relevant then for the economic crisis unfolding in 2008. Unfortunately, it’s still pertinent for the Presidential debates to come over the 14 months ahead.

Back then, I quoted an August 25, 2008 Chicago Tribune column by John McCarron, which opened by noting: “Our neighborhoods are filling up with foreclosed houses — the result of deregulated brokers and bankers gone wild.” I joined him in asking Barack and his handlers: ‘Where’s the outrage?’ I ended my blog by imploring: “It’s time for Obama to demand a stop to the squandering of American communities and for a market that invests in them.”

John McCarron’s Chicago Tribune column last month on July 27, 2015 states that: “More than a quarter-million mortgage foreclosures have been filed in Cook County since 2008.” Seven years later, McCarron observes our state and city officials still can’t figure out how to employ community residents in rebuilding their own neighborhoods by rehabbing vacant homes at affordable prices.

Yet, the Obama administration’s signature effort to assist homeowners, “advertised in 2009 as a lifeline for as many as four million troubled borrowers,” is categorized as “Slack Lifeline for Drowning Homeowners” in Gretchen Morgenson’s Fair Game column in the August 2, 2015 New York Times. She cites a recent report on the Home Affordable Modification Program [HAMP] that just 887,001 borrowers have been able to receive a modification. “Banks participating in the program have rejected 72% of the applications since the process began.” Morgenson opines: “It appears that the program has allowed big banks to run roughshod over borrowers again and again.”

What are the future prospects for community lending? In a July 26, 2015 Chicago Tribune article, “Two-Tier System Reshaping Lending,” E. Scott Reckard reports: “Even as the housing and mortgage markets are stabilizing, many borrowers with good credit remain shut out of the home loan market or saddled with a new array of fees and extra costs.” John Taylor, CEO of the National Community Reinvestment Coalition [NCRC], is quoted that for lower-income borrowers, lenders are “pulling up the gangplank.”

Returning to those redlining days of the early ‘70s, lenders are again routing borrowers with minor credit issues and down payments of less than 20% to higher-cost Federal Housing Administration [FHA] mortgages. This time it’s not just race but class that is causing disparate impact. It’s not just past wealth that has been stripped from our communities over these past seven years; but any hope of building new wealth in rebuilding these same communities plagued by vacant homes. With an ineffective HAMP, wealth inequality is and will continue to hamper America’s economic growth.

I’m certainly not expecting the “Donald” to address wealth inequality. But these past seven years certainly document the need for a political leader “who puts the safety of the economy ahead of narrow financial interests” and stops the squandering of American communities and starts investing in them.

This week’s addition to the U2Cando playlist (with just two tweaks in lyrics) comes from 1997 as President Bill Clinton was starting his second term:

Winter 2007

Winter 2007

It’s Christmas time in Washington
The Democrats rehearsed
Gettin’ into gear for four more years
Things not gettin’ worse

The Republicans drink whiskey neat
And thanked their lucky stars
They said, “He cannot seek another term
They’ll be no more FDR’s”

There’s foxes in the hen house
Cows out in the corn
The unions have been busted
Their proud red banners torn

To listen to the radio
You’d think that all was well
But you and me and Gale Cincotta know
It’s going straight to hell

Come back to us, Bobby Kennedy
And Martin Luther King
We’re marching into Selma
As the bells of freedom ring

So come back Woody Guthrie
Come back to us now
Tear your eyes from paradise
And rise again somehow

Christmas in Washington
by Steve Earle

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