Saturday, July 21, 2007

Beyond the new "Dust Bowl"

This week at the Campaign for America's Future, Rick Perlstein concluded The Foreclosing of America, his four-part series on the crisis in foreclosures caused not just by the burst of the housing bubble, but by the explosion in NINJA - a "No Income, No Job, No Assets" - home loans.

Perlstein examines how lack of oversight and cronyism in the finance services industry led to working people taking out a glut of risky loans and, since the housing bubble burst, the consequent explosion in foreclosures.
But you can't believe you're one of them. And, having internalized Republican ideology (personal responsibility!), you presume it must be your own fault.

Like most things Republicans believe, that's wrong. You've been defrauded, and under the cover of law. The ownership society has, as the kids say, owned you. It's owned us. The crisis is systemic. In this wealthiest of countries, one presently graced by rates of economic growth Republicans are pleased to all "healthy," foreclosure rates in the first three months of 2007 were at their highest since 1979 - a year when the economy was at its un-healthiest since the Great Depression.
"This could well become Dust Bowl stuff," Perlstein worries, describing neighborhoods already filled with boarded-up and unsold homes. It's a crisis that goes well beyond those who have lost their homes - the uncertainty and anxiety that comes with it effects everyone.
And I mean everyone—and not just if a housing securities collapse tanks the financial system. What FDR so wisely grasped—that preserving the value of a family's home is a collective good—is radically more true 85 years later. Our schools are primarily funded by property taxes, which are levied based on the assessed value of homes. Is America prepared to reckon with the damage to school districts across the nation as home values collapse?

Collapsing home values leave every child behind—a vicious circle, hurting everyone.
The way forward for progressives, Perlstein believes, is a "new progressive politics of homeownership" that refocuses our government's resources in the way FDR did in declaring the "inequitable enforced liquidation at a time of general distress is a proper concern of the government." Because despite the happy talk surrounding the surging stock market, a generalized anxiety persists. While "the economy" is doing well, the people are worried.

It's addressing that anxiety - the uncertainty - that Jacob Hacker speaks of in "The Great Risk Shift" that will restore the country you and I grew up in.
What would a new progressive politics of homeownership do for them? One that deployed collective resources to keep people in their homes, keep neighborhood home values up, deployed a federal rainy day fun for municipalities to keep up school funding in the event of a property-tax drought, one that (if this is truly what Americans decided they wanted) could keep the homeownership rate at 69 percent or higher by offering a NINJA loan's inexpensive and accessible terms without NINJAs' lottery-like risks, which eliminated vulture-lenders with extreme prejudice and perhaps even put some of the worst offenders in jail (or, at least, not in charge of banking regulatory agencies)?

It would rescue millions of Americans from everyday anxiety in a way not seen since the passage of Medicare in 1965.
It's something people are hungry for. Democrats need to promote this as an alternative to the "every man for himself" ethos of the conservative project, as I have written before.

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