Day: July 13, 2008

Is This What Gramm Was Talking About?

The most recent data on home foreclosures give an indication of the human cost of the US housing market collapse. Foreclosure filings were up 53 percent in June from a year ago and bank repossessions soared 171 percent, as falling property values forced more and more people out of their homes.

According to RealtyTrac, in the course of June one in every 501 American households either lost a home to foreclosure, received a default notice or was warned of an impending auction.

Nationwide, more than 250,000 homes received at least one foreclosure-related notice in June. Economists are predicting 2.5 million US homes will enter the foreclosure process this year, compared with 1.7 million in 2007. This spring, a Credit Suisse report estimated that 6.5 million loans would fall into foreclosure over the next five years, affecting more than 8 percent of all American homes.

Soaring gas prices are contributing to the woes of families that moved out of urban areas. “The housing beyond the sprawl is going to suffer another serious leg down because of high oil prices,” Peter Navarro, professor of economics and public policy at the University of California in Irvine, told the media. “A lot of people went out there to get cheaper homes, but this [gas prices] is going to take a big bite out of their mortgage.”

Meanwhile, the total of new homes that have been completed and are available for sale was up 35 percent in May over June 2006. The average length of time they have been sitting on the market unsold has climbed 136 percent in that period, from 3.6 to 8.5 months. According to Floyd Norris in the New York Times, the latter figure is the highest ever recorded by the government.

The working class is suffering enormously, and worse is still to come. A report from the Washington-based Center for Economic and Policy Research (CEPR), entitled “The Impact of the Housing Crisis on Family Wealth,” paints a dire picture. Authors Dean Baker and David Rosnick make the point that average Americans have been the victims of “two extraordinary asset bubbles in the last decade,” a “stock bubble” that began in the mid-1990s and collapsed in 2000-2002, and the housing bubble, which began to deflate in 2006.

The housing bust threatens to spark a full-scale meltdown of the financial system. Two enormous US financial firms, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Mortgage Corporation), are facing insolvency. The two government-sponsored, privately held companies currently own or guarantee some $5.2 trillion in residential mortgages, nearly half of all outstanding home loans in the US. In the nine months from July 2007 through March 2008, Fannie Mae and Freddie Mac lost a combined $11 billion and are finding it increasingly expensive to raise capital to cover their losses.

It is increasingly likely that the American population will be forced to pay for the disaster brought about by years of parasitic and reckless financial operations. Standard & Poor’s reported this spring that a bailout of Fannie Mae and Freddie Mac would cost US taxpayers $1 trillion, more than five times the amount of the savings and loan bailout (taking inflation into account) of the late 1980s and early 1990s.

This is an indictment of American capitalism and its cult of the “free market.” The blind and anarchic operations of the profit system threaten the population with catastrophe. Society can no longer afford the rule of this corrupt, greedy elite, none of whose political representatives, Republican or Democratic, have any solutions for the crisis.

GOP: Libertarians Are Not A Threat

If Republicans are worried about the third-party presidential candidacy of former GOP Congressman Bob Barr and the possibility that he could win enough votes to affect the outcome in several states, they aren’t showing it.

At present there are no plans to follow the time-honored method of dealing with pesky third-party candidates by seeking to knock Barr off various state ballots. Indeed, when asked for comment about the Barr campaign, John McCain’s campaign flat out declined to offer any at all. Underscoring that indifferent approach, the Republican National Committee offered this response when asked about the former conservative congressman from Georgia.

The GOP strategy toward the Libertarian Party nominee presents a stark contrast to 2004, when Democrats aggressively challenged left-leaning Independent candidate Ralph Nader’s ballot petitions in order to remove him from the ballot in places where he might siphon critical votes from nominee John Kerry.

As third parties go, the Libertarian Party has done a solid job of getting its presidential candidate on the ballot nationwide in recent years. The Libertarian nominee has appeared on the ballot in 48 of the 50 states since 1988, and the party has qualified for ballot lines in 31 states this year-including Georgia, where Barr was elected to four terms from a suburban Atlanta House seat. The Barr campaign has met filing deadlines in every state so far and again expects to be on the ballot in at least 48 states.

The only states where the party anticipates trouble are Oklahoma and West Virginia, and Barr will likely sue for access in Oklahoma, according to Richard Winger, a ballot access expert who is advising the Barr campaign.

If McCain’s campaign, or anyone acting on his behalf, does challenge Barr’s ballot access, Barr’s campaign believes they would have a powerful argument that the Republican would be acting hypocritically and they are optimistic he will not do so for that reason.

We Are Whiners!

I was really pissed after Phil Gramm made his now infamous statement about the American people. But after thinking it over completely I must agree with Gramm. Oh hell, not for the same reason he said but on others. America is truly a nation of whiners.

Why do I say this? Glad you asked.

WE whine about the price of gas while we pump it into a large SUV that gets 4 gallons to the mile. WE whine about the price of food yet we throw away enough food to feed a small third world country. We whine about the leadership of the country but we continue the same types to Washington.

It is the age old problem, everyone sees the problem but it is up toi someone to solve it…we cannot be bothered with that part of the problem.

So I say to my fellow Americans….Whine on and do nothing…that is always a good solution to the problem.

U.S. Recessions

JUst a few facts I found that I thought my readers might find interesting, especially on the causes of the recession we have faced since 1950.

1953 — Inflation caused by spending during the Korean War prompted the Federal Reserve to tighten monetary policy, causing a one-year recession.

1957-1958 — A recession hit developing countries the hardest because industrial nations sharply cut their purchases of minerals and farm products. U.S. unemployment rose during this period but, unusual for a recession, prices did also.

1973-1975 — The Organization of Petroleum Exporting Countries, or OPEC, quadrupled oil prices. That and the ongoing expense of the Vietnam war caused two years of inflation with little or no growth.

1980, 1981-82 — The Federal Reserve’s sharp rise in rates to quell the inflationary period of the 1970s and another spike in oil prices, this time triggered by the Iranian revolution, tipped the United States into a brief recession in 1980. A short expansion was followed by a deeper downturn from 1981 to late 1982.

1990-1991 — A credit crisis prompted by the insolvency of many failed U.S. savings and loans and a spike in oil prices during the first Gulf War resulted in a contraction followed by several years of sub-par growth.

2001-2002 — The bursting of the dot-com bubble, the Sept 11 attacks and corporate accounting scandals induced a relatively short and shallow recession followed by two years of slow growth.

Does any of this look familiar to anyone else?

Baghdad’s Green Zone Could Be US Free

The green zone of Baghdad, a highly fortified slice of American suburbia on the banks of the Tigris river, may soon be handed over to Iraqi control if the increasingly assertive government of Nouri al-Maliki, the prime minister, gets its way.

A senior Iraqi government official said this weekend the enclave should revert to Iraqi control by the end of the year. “We think that by the end of 2008 all the zones in Baghdad should be integrated into the city,” said Ali Dabbagh, the government’s spokesman.

The prospect may prove disconcerting for the Americans, who have just begun to transfer their diplomatic operations in the zone from Saddam Hussein’s Republican Palace to a new embassy, the largest and most expensive in the world.

The $600 million building, at the heart of the green zone, protected by blast walls and layers of barbed wire, is the size of the Vatican City. It is virtually a self-contained town, with a heli-pad, sewerage and water treatment plants, a telephone exchange with a Virginia dialling code, a swimming pool and a bombproof gym. It will contain 619 blast-resistant flats

Under the Baghdad government’s plan the embassy will remain but the Iraqis will take back the five-square-mile secure “bubble” surrounding it.

The green zone, which was built after the US-led invasion in 2003 as a safe administrative hub, has long infuriated Iraqis. It sliced off neighbouring districts from one another.

Do not, personally think this will happen, but it is an interesting turn of events.

Green Party Picks McKinney As Nominee

After months of front runner status, it is official.

The liberal environmentalist Green Party nominated former Congresswoman Cynthia McKinney as its presidential candidate Saturday.

McKinney, 53, held off three rivals to win the party’s nomination during its convention in Chicago, Illinois. She picked journalist and activist Rosa Clemente as her running mate.

Green Party spokeswoman Scott McLarty acknowledged McKinney was a “long shot” for the White House, but said, “Every vote that she gets helps the Green Party.”

McKinney announced she would seek the presidency as a Green Party candidate late last year. She criticized the Iraq war and said both Democrats and Republicans are beholden to corrupt corporate interests.

McKinney, who was a Democrat, served six terms in Washington representing a suburban Atlanta district but was defeated in 2006 by DeKalb County Commissioner Hank Johnson. She had been the first black woman elected to Congress from Georgia.

One of her final acts in Congress was to introduce a bill to impeach President Bush, saying he misled Congress into approving the war in Iraq and violated the law by secretly spying on citizens.

Obama And Friends To Go To Iraq

When Senator Barack Obama travels to Iraq later this summer to get a first-hand look at conditions there, he said he would be accompanied by two colleagues who have “bipartisan wisdom when it comes to foreign policy.”

Senator Chuck Hagel, Republican of Nebraska, and Senator Jack Reed, Democrat of Rhode Island, will join Mr. Obama on his first trip to Iraq as a presidential candidate. All three senators share similar views – critical ones – of the administration’s Iraq policy.

The visit to Iraq, and his findings from briefings with military commanders, represents an important moment in Mr. Obama’s general-election candidacy. While he has said that he still supports the idea of removing American combat troops within 16 months, at a pace of one to two brigades a month, the conditions in the country also hold significant sway over his plan.

He said he was going to Iraq not to promote withdrawal but to gather facts.

For Obama this is a good idea after being poked and prodded by McCain and his pack mouthpieces.