Hard Times

Aren’t job losses and foreclosures as important as a “Ground Zero Mosque” (that isn’t a mosque, hasn’t been built or even at ground zero)?

We know we live in hard times that are on the verge of getting harder with 500,000 new claims for unemployment last week, a recent record.

The stock market may be over for now as fear and panic drives small investors out. Big corporations hoard stashes of cash rather then hire workers. The D-Word (depression) is back in play.

Foreclosures are up, and the Administration’s programs to stop them are down, well below their stated goals, only helping 1/6th of those promised assistance.

And here’s a statistic for you: 300,000. That’s the number of foreclosure filings every month for the past 17 months. This year, 1.9 million homes will be lost, down from 2 million last year. Is that progress? In July alone, 92, 858 homes were repossessed.

At the same time, the number of cancelled mortgage modifications exceeded the number of successful ones.  According to Ml-implode.com, last month, “the number of trial modification cancellations surged to 616,839, greatly outnumbering the 421,804 active permanent modifications.”

And don’t think this is only a problem that affects the homeowners about to go homeless. The New York Times quotes Michael Feder, the chief executive of the real estate data firm Radar Logic to the effect that we are all at risk.

“My concern is that if we have another protracted housing dip, it’s going to bring the economy down,” Mr. Feder said. “If consumers don’t think their houses are worth what they were six months ago, they’re not going to go out and spend money. I’m concerned this problem isn’t being addressed.”

The larger point is that even if you believe the economy is already down, it can go lower. No one knows how to “fix it” either just as BP couldn’t plug the “leak” that, truth be told, is still oozing oil.

So what are we doing about it? Are we demanding debt relief or a moratorium on foreclosures? Are we shutting down the foreclosure factories?

Nope.

Progressives are spending time and wasting passion this August debating on an Islamic Cultural Center near Ground Zero, invariably responding to the provocations and agenda of adversaries. They are always on the defense, never taking the offense.

Who is beating the drum for job creation and a new economic policy? Maybe the unions, but their voice is muted and ignored in the electronic noise machine.  Marches are planned by the UAW and Rev. Jesse Jackson on August 28th in Detroit and in Washington on 10.02.10. But the expected war of the words between Rev. Al Sharpton and Glenn Beck over the legacy of the March on Washington is expected to generate more heat.

Meanwhile, even as the Administration seems to be finding signs of a “recovery,” a parade of failures march on from the discovery that there is an oil slick the size of Manhattan in the Gulf to the persistence of frauds in finance from state pension funds in New Jersey to the case against the head of the Bank of America.

Even worse, Shorebank, one of the banks that community activists considered a national model of social responsibility has gone down in Chicago, the 104th bank to fail this year with 15 branches including some in Detroit and Cleveland. It was also active in 40 countries. In June, it reported over $2 billion in deposits. By August, it was gone.

In all, 349 U.S. banks have disappeared since 2007.

ShoreBank promoted itself as a community development and environmental bank. It was based in Michelle Obama’s old neighborhood with the slogan “Lets Change The World.”  Now the world of Wall Street has changed the bank with a partnership of investors including American Express, Bank of America and Goldman Sachs taking over under the name “United Partnership.”

Hundreds of other banks are on the FDIC hit parade and may be next.

There were many worse casualties in banking in the past according to Barry James Dyke’s informative book, Pirates of Manhattan. He notes that ten thousand banks failed during the depression and 2,900 bit the dust in the S&L crisis. The current number may have been higher had Congress not bailed out the Banksters who used some of our money to play PacMan, gobbling up smaller institutions.

AP reported,

“ShoreBank lost $39.5 million in the second quarter amid soured real estate loans. The bank had been under a so-called cease and desist order from the FDIC for more than a year, requiring it to boost its capital reserves. ShoreBank was able to raise more than $146 million in capital this spring from several big Wall Street institutions. It was unable, however, to secure federal bailout funds it sought from the Treasury Department’s Troubled Asset Relief Program.”

Republicans are “investigating” alleged Administration support for the Bank, AP explained:

“Rep. Darrell Issa of California, the senior Republican on the House Oversight and Government Reform Committee, sent a letter to a White House legal adviser asking specific questions on possible contacts between administration officials and executives of ShoreBank or potential investors.

The White House has said no administration officials met with ShoreBank concerning its rescue or requested help from financial institutions on its behalf.”

Questions raised by Republicans, of course, seek to politicize the issue when it is the FDIC ‘s deal with the big banks that needs to be probed, as Zero Hedge explains:

“As it stands, Goldman and 11 other banks are receiving a multimillion dollar gift to conduct a portfolio liquidation run-off of ShoreBank’s assets, while merely making sure existing deposits are serviced.”

(Note:  a Republican leads the FDIC. Hmm.)

Blogger Mike, “Mish” Shedlock concludes: “The FDIC’s handling of Shore Bank smells as bad as a pile of dead alewives on a Chicago beach in mid-July.”

My question is:  Why didn’t the Administration help shore up ShoreBank (if it could be shored up) as they did so many of the “too big to fail” banks?

Their hands-off attitude, perhaps in fear of being criticized, as they were anyway, helped doom the bank and, by extension, the idea that we could have socially responsible lending institutions.

So much for the priorities and power of Obama’s “Chicago Mafia.”

If they don’t have the guts to save a bank in their own hometown they know has meant so much to so many, is it any wonder they won’t take on the crimes on Wall Street?

Last week, Treasury Secretary Tim Geithner was complaining that he is being falsely identified as a “Goldman Guy,” insisting he never worked for the financial institution that was recently branded a “Giant Squid On The Face Of Humanity.”

He doesn’t seem to realize that the speculation is not based on the details of his resume but on an assessment of his track record as a toady for the pals he worked with when he ran the Federal Reserve Bank in New York.

And by the way, Tim, why the hold–up on the appointment of Elizabeth Warren to run the new Consumer Financial Protection Bureau in your old institution?  Is she too smart and popular for you?

Why the fiddling while our modern Rome burns?

Filmmaker and News Dissector Danny Schechter edits Mediachannel.org.
For more on his film Plunder: The Crime of Our Time and companion book The Crime of our Time, visit plunderthecrimeofourtime.com.

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  • Neo2012

    When it has a prayer center within it, it IS a moaque and the fact that a large piece of the landing gear from one of the planes made this building, not useablw…it IS part of ground zero. You need tpo pull your head out of your behind and stop staring at the world from a glass belly button.

    • Gemmarama

      well no, actually, it's a religious centre with a variety of facilities – including a restaurant and a swimming pool – designed to help relations between the various religions (the very opposite of what you're doing now). if i designate my kitchen as a “prayer room”, does that make my house a church?

      and it's two blocks away from ground zero, round a corner, then another short walk along the street. to paraphrase the great charlie brooker in the guardian today, if i take a shit in a pub three minutes walk away from buckingham palace, should i be arrested for shitting in the queen's bed?

    • Connie Dobbs

      I don't think you've ever been here.

    • dumbsaint

      So my state's international airport is a mosque? right

  • Your Mom

    The economic problems in America are being exacerbated by Messiah Obama's attempts to fix the problem. Left alone, the economy will recover on its own. Remember “Black Monday” in 1987, when the market lost about 25% of its value in a single day? People freaked out and demanded the government fix the problem. Reagan's policy? Leave it alone. Reagan was vilified in the press for his indifference, but time proved him correct: within

    The current economic crisis is similar to the 1930s: the problem was bad, but the gub'mint made it worse by sticking their dicks in and fucking it harder. As National Humanities Medal winning economist Thomas Sowell wrote:

    “Although the big stock market crash occurred in October 1929, unemployment never reached double digits in any of the next 12 months after that crash. Unemployment peaked at 9 percent, two months after the stock market crashed– and then began drifting generally downward over the next six months, falling to 6.3 percent by June 1930.

    “This was what happened in the market, before the federal government decided to “do something.”

    “What the government decided to do in June 1930– against the advice of literally a thousand economists, who took out newspaper ads warning against it– was impose higher tariffs, in order to save American jobs by reducing imported goods.

    “This was the first massive federal intervention to rescue the economy, under President Herbert Hoover, who took pride in being the first President of the United States to intervene to try to get the economy out of an economic downturn.

    “Within six months after this government intervention, unemployment shot up into double digits– and stayed in double digits in every month throughout the entire remainder of the decade of the 1930s, as the Roosevelt administration expanded federal intervention far beyond what Hoover had started. [...]

    “Those who are convinced that the government has to “do something” when the economy has a problem almost never bother to find out what actually happens when the government intervenes.”

    Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/colum

    Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/colum

    • myth_slayer

      “Left alone, the economy will recover on its own.”

      Ignoramuses you like will never get it — too little education in history, math, and related subjects.

      How can there possibly be an “economy”? The five major banks make up 63% of the GDP — the sum total of the entire Fantasy Finance Sector, together with military spending makes up over 80%, perhaps over the real 90% of the entire GDP!!!!!!

      Where's the economy?

      Do you actually even know anything about global finance and economics? What role did prohibition, money laundering through the stock markets, and super-leveraged speculation play in the Great Crash?

      What role does the dealing in securitized debt play in America's GDP?

      What five major American financial institutions control 90% of the credit derivatives market?

      Is the USD (American currency) fundamentally based on mortgage loans? Is that a sound idea?

      • Liam_McGonagle

        “The five major banks make up 63% of the GDP . . . “, etc.

        Those are some interesting stats. And they're directionally consistent with my understanding of the sector's outsized role in the overall economy. But yet they still seem a little TOO high to be realistic.

        I'm looking everywhere for some stats on market concentration in the financial sector. Would you be able to share specific citations for the stats you quoted in your post above?

        Thanks loads

        • myth_slayer

          From:

          http://www.tnr.com/article/politics/shooting-banks

          “As a result of the crisis and various government rescue efforts, the largest six banks in our economy now have total assets in excess of 63 percent of GDP (based on the latest available data). This is a significant increase from even 2006, when the same banks’ assets were around 55 percent of GDP, and a complete transformation compared with the situation in the United States just 15 years ago, when the six largest banks had combined assets of only around 17 percent of GDP. “

          [although I disagree with Simon Johnson, I believe it is the top 5 when one counts the following: JP Morgan Chase, BankofAmerica, Goldman Sachs, Morgan Stanley, Citigroup. -- I think Morgan Stanley is better at hiding their stuff.]

          Also, if you go to the govt. report below for the banks/credit derivatives holdings (p. 24, then p. 23) of the report below:

          http://www.occ.treas.gov/ftp/release/2010-33a.pdf

          • Liam_McGonagle

            Thanks again.

            I think I got a somewhat misleading impression at first. I thought you meant that the Net Income of the 5 largest banks was 63% of GDP. Although it is indeed my understanding that the top 5 have an outsized role in our economy, and that B.S. asset valuation models and accounting standards grossly inflate their productivity, I really doubted that even the big 5 would have had the cajones to lie to THAT extent.

            But now I see that you meant that the Total Assets–a static balance sheet statistic rather than a periodic income statement measure. And kind of an incomplete one at that–most people tend to look at Net Assets or Equity, being the net of Total Assets and Total Liabilities–as a little more informative. And the situation's a little more complicated even, because I'd suspect that many of those assets/liabilities are overseas, and therefore related income streams are reported OUTSIDE of GDP.

            In a way, to compare Total Assets to GDP is like comparing the total accumulated number of calories stored throughout an entire human body to the caloric intake required daily to maintain body weight. Not too informative. At least without reference to the ratio for a “typical” human, whatever that might be.

            I'm hoping to find something like the Herfindahl-Hirschman Index scores from some recent DOJ reports. That is a nice statistic to have, because what it basically tells you is an estimate of the 'effective number of firms servicing a given market'–a nice handy way of understanding the true power dynamic in the market place.

            But while that stuff is fairly readily available on the FTC and DOJ websites for OTHER industries, not so for financial services. I don't know if it's because financial services is a 'favoured industry' politically speaking, or because the nature of their particular business models renders some of the information supporting an HHI assessment 'sensitive proprietary data' or it's just so voluminous that the DOJ isn't willing to spend hundreds of staff hours publishing it. My personal guess is that it's a combination of all the above, plus maybe a dash of lack of understanding of the financial sector's central importance in understanding the interrelationship of the whole economic gestalt.

            Still, GDP information is available, and Net Income figures, too. That might yield some interesting longitudinal data, but the context would be so much richer if we just had the damn HHI.

  • Liam_McGonagle

    Well, yeah the economy's more important than the “Mosque Masque” as I have taken to calling the farcically controversial non-controversy. But The One Unbreakable Rule of the dominant media paradigm is at total odds with the frankness required for serious discussions: The Customer Is Always Right.

    Serious discussions of stubborn unemployment cannot credibly avoid confronting morbid levels of market and capital concentration and their contribution to a fundamentally uncompetitive, unwholesome economy. You cannot provide any meaningful treatment to a Type II Diabetes patient without confronting the issue of obesity. And neither can we address persistent, systematic unemployment without admitting that our collective laziness and magic-of-the-markets fantisizing has surrendered far too much power into the hands of unaccountable private sector tyrants.

    True, the situation doesn't look great for the Administration's party right now. But its problems relate most closely to the GOP hamstringing of public institutions through the likes of Grover Norquists campaign to destroy government and consistent and unprincipled obstructionism. When the President makes about $400k / year versus the mutli-million BASE salaries (i.e., excluding options, bonuses, etc.) for each of the individual CEO's in the corporate world, the balance of institutional power is a pretty poor kept secret.

    This issue is if anything even more disasterous for the Republicans than it is for the Democrats. Having spent at least 30 years branding itself as the party of “big business”, it can't credibly change course overnight. Corporate tax is lower than it has been at any time since the end of WWI. In 1965 federal revenues from corps were 3.7% of GDP at a 4.5% unemployment rate. In 2009 federal revenues from corps were only 1.1% of GDP but unemployment had more than doubled. How can anyone take the Laffer Curve as anything other than an insulting GOP joke today?

    So, duh, FoxNews(tm) ain't gonna lead into their current events programming with the motto: “Americans, y'all 're some fat, stupid MF's.” Hell no. Not when you can broadcast Sarah Palin's fantasy crusade against an unarmed enemy. Action, suspense, emotions at a high pitch and the promise of an easy solution pre-packaged in a simple ideology.

  • myth_slayer

    “Progressives are spending time and wasting passion this August debating on an Islamic Cultural Center near Ground Zero, invariably responding to the provocations and agenda of adversaries. They are always on the defense, never taking the offense.”

    With all due respect, Mr. D, these aren't progressives, nor even authentic dems, simply members of the Obama Apology Network who uniformly and most conveniently ignore the obvious reality that Obama has appointed the most anti-worker, anti-small business, anti-union swine possible to his administration (the only scumbag he has yet to appoint is Dick Cheney!).

    NPR and the formerly-affiliated Air America stations are totally bogus, simply running clips from Rush Limbaugh, Beck and the rest of those sleazoids, and spending all their time responding to their faux crapola, completely ignoring any real content.

    The real newsworthy story the past several weeks was the release of the SIGIR report (Special Inspector General for Iraq Reconstruction) which detailed quite a number of convictions of American military officers, and private contractors and contracting firms, for conspiracy, wire fraud, embezzlement, etc., ad nauseum.

    And also happened to mention that 96%, or $8.7 billion went unaccounted for from one major funding, and it was kept on account at Timothy Geithner's Federal Reserve Bank of New York (he was the chairman at that time), and those who bothered to check realize that Geithner's best friend and college brother, Daniel Zelikow, was the managing director of the contract J.P. Morgan Chase had in coordinating the Iraq Trade Bank — so the monies would go between the FRBNY and the Trade Bank, and somehow went unaccounted for.

    The convictions were on the remaining 4% audited funds!

    Real citizens are interested in the connections between those unaccounted for billions, Timothy Geithner and Daniel Zelikow.

    (And Thom Hartmann, whom I listed to for one year straight, is simply another misdirector who spends 92 to 93% of air time on rightwing nuts, only giving 7% to 8% over to a Chris Hedges, William Greider or a Nomi Prins — which translates to 5 minutes per year for those types of people!

    Too many misdirectors, to few real progressives and authentic dems.)

    • http://www.youtube.com/user/TheDreamerCalledJohn TheDreamerCalledJohn

      Hello Myth Slayer,

      Since you seem to be more informed than I am, I was wondering on your suggestions on news providers.

      I currently look at RSS news feeds for PBS Newshour (Headline News), BBC (Front Page, Health), EurekAlert! (Science), CNET (Technology), NPR (Arts & Life), Disinformation, Truthout, OpenDemocracy, The Public Record, World Socialist Website, Democracy Now!, Global Research, The Intelligence Daily, etc.

      I would like your suggestions on which you would and would not recommend from my list and your own.

      Thank very much,
      -John

      • myth_slayer

        Mr. John,

        Probably not more informed, just much older and doggedly tenacious the older I've gotten.

        Normally, I scan the foreign news, especially The Guardian, Der Spiegel, etc., and then read US government documents in general, and those referencing foreign news stories in particular, which seldom if ever appear in the US Non-news.

        The best ones in America which are radio- and web-accessible: tucradio.org, Bonnie Faulkner's “Guns and Butter” program which originates out of Berkley (kpfa.org/guns-and-butter) and Between the Lines (btlonline.org).

        Disinformation, Truthout, Global Research, etc., all excellent. Democracy Now! is quite good, but — and I'm sure unbeknownst to Amy — some planted shows or news segments sneak in there from time to time (e.g., Shane Harris segment on his pre-financed and much phony book, “The Watchers” – etc.).

        Heads up on PBS: absolutely stopped watching that as of 2003. Saw a show involving a debate between a simpleton lobbyist and identified business econ prof from New York University. Was curious about how badly she performed so went about contacting her to tactfully make some positive constructive comments.

        Only, it took me three months of intensive searching to finally locate this person: she was a member of the New York SAG Chapter (as in Screen Actors Guild), and she had been called — for what she thought was an audition — to play a prof on a news show! (Never been on any faculty, not even a college grad, etc.).

        Watched PBS News Hour for two months straight, tracking the background of everyone appearing. Eighty-seven (87%) percent of their guests all belonged to Council on Foreign Relations, and some similarly connecting outfits. They were identified as such when they occupied the top-100 group, most frequently went unidentified. (Research into the background of PBS, and the connections and such become rather obvious.)

        NPR, strictly foundation-sponsored; meaning the most propagandistic of the foundations (50,000 and counting) — such as Starr Foundation (AIG), MacArthur Foundation (insurance industry), various members of the Rockefeller Foundations Network, etc., — (and what many Americans once knew, but few remember anymore, foundations are fundamentally tax-free holding companies to hide the ownership and real worth of its owners and investors).

        Also, too many shows on NPR have the Usual Suspects: American Enterprise Institute (hedge funds), Heritage Foundation (neocons), Cato Institute (oil and energy companies), and so forth.

        I principally pay attention — among the American population — to Michael Parenti (one of the top thinkers alive), Chris Hedges (truthdig.com, etc.), Glenn Greenwald (salon.com), Glen Ford (blackagendareport.com), and economists Michael Hudson, James Galbraith and Steve Keen (Australia).

        Would highly recommend to any interested in the latest Criminal Court's predatory jurisprudence (the Citizens' United decision): Steven Reisler's brilliant talk:

        http://www.youtube.com/watch?v=HYEuLheUrBw

        • http://www.youtube.com/user/TheDreamerCalledJohn Goodjohn1984

          Hello Myth Slayer,

          Thank you very much for the detailed reply, I am sure the information and links you have supplied will help me to better inform myself with more reliable information; I have copied & pasted your post to WordPad so I can start checking out the links soon.

          I suspected some of the issues you mentioned about PBS and NPR, but I never investigated my suspicions; it is good that you took the time to do that and that you shared some knowledge of your investigations with me.

          I hope to read more of your posts in the future here on Disinformation, it is good to read posts from people that seem to have a good grasp of many of the issues we are facing to day.

          There are many things that people like me can learn, and hopefully some of us can start trying to fix some of these many problems and bring a better balance to our lives and this world; thank you again and keep up the good work, because there are some people like me that were poorly educated and have a lot to learn about this world & life. Hahaha

          Have a nice day,
          -John

          • Gemmarama

            al jazeera english is the bomb. proper in-depth news analysis, no stoopid tickertape rolling headlines, and lots of john pilger.

          • http://www.youtube.com/user/TheDreamerCalledJohn TheDreamerCalledJohn

            Thank you Gemmarama, I do need to check their RSS feed more often, thank you for reminding me.

  • http://www.youtube.com/user/TheDreamerCalledJohn TheDreamerCalledJohn

    Thank you Gemmarama, I do need to check their RSS feed more often, thank you for reminding me.

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