In "The Forgotten Millions," in Friday's NY Times, Paul Krugman notes the second of two inconvenient, bipartisan facts that he's pointed out this week; this time about our nation's unemployed. In his words: "Washington has lost interest in the unemployed."
He extends kudos to Nancy Pelosi, calling her one of the few political figures inside the Beltway who is "still trying to get some kind of action" as far as passing a jobs bill is concerned. He continues...
...But no jobs bills have been introduced in Congress, no job-creation plans have been advanced by the White House and all the policy focus seems to be on spending cuts.
So one-sixth of America’s workers — all those who can’t find any job or are stuck with part-time work when they want a full-time job — have, in effect, been abandoned.
It might not be so bad if the jobless could expect to find new employment fairly soon. But unemployment has become a trap, one that’s very difficult to escape. There are almost five times as many unemployed workers as there are job openings; the average unemployed worker has been jobless for 37 weeks, a post-World War II record.
In short, we’re well on the way to creating a permanent underclass of the jobless. Why doesn’t Washington care?
He tells us the reason for this is due to the fact that the the economy "is suffering from low hiring, not high firing, so things don’t look so bad--as long as you’re willing to write off the unemployed."
He notes that many recent polls have told us that Main Street cares "...much more about jobs than they do about the budget deficit." And, he points to a new Pew Research Center poll, where we learn that...
...a majority of Americans see “not much difference” between Mr. Obama’s approach to the deficit and that of Republicans.
So who pays the price for this unfortunate bipartisanship?
He asks us why was the
"...Obama administration...so quick to accept defeat in the war of ideas."
I'll leave it at that, because I strongly suggest a full read of this particular column. It's one of his best in awhile...except for, perhaps, the other bookend to it, on our nation's foreclosure fraud and housing crisis, which appeared in the Times this past Monday: "Another Inside Job."
I've discussed these travesties that are occurring in our nation's mortgage and housing sectors in full view of the public--a public that's otherwise preoccupied with events in Japan, the southern Mediterranean, the mideast, and Wisconsin--most recently, last Saturday, in: "Stealing Home: Main Street's Final Sacrifice."
Fellow Kossack icebergslim had a great diary on the Rec List on these subjects, just the other day: "OMG!!! Obama Administration pushing for a deal to settle home foreclosure claims."
The Cliff Notes' version is simple, so it was spun by the spinmeisters in D.C., earlier in the week: The status quo, led by the administration's chief Wall Street evangelist, our Treasury Secretary, "Geithner seeks swift foreclosure pact with banks."
Our President, so we we're told, is "getting tough" with the too big to fail (TBTF) banks, as he seeks a $20-$30 billion "settlement" with the mortgage industry for...drumroll please...usurping U.S. household assets by some $6 trillion over the past few years, as Wall Street pillaged the public in more ways than there are examples of sexual positions in the second section of the Kama Sutra.
(Heh...speaking of Main Street being in the missionary position...)
And, then everyone from Gretchen Morgenson at the Times, to Naked Capitalism Publisher Yves Smith (and Krugman, as linked above), pointed out a few inconvenient facts which illustrated the reality that this was a true bipartisan affair, as well.
So, also in Friday's NY Times, we have this complementary story, providing an upgrade to Geithner's spin from earlier in the week. (This time, it's about the "new" future of housing finance in the U.S.) Yes, we now have Kleptocracy, "New and Improved!" See: "Geithner Backs New Financing Approach for Mortgages."
If you read my earlier posts on this matter, you'll realize that this is, truly, the biggest guaranteed socialization-of-losses-and-privatization-of-profits scam conjured up for Wall Street, yet!
Yes. Perhaps the greatest travesties regarding this "solution" to the mortgage fraud story have gone mostly unreported, as I noted in a comment to icebergslim's diary...
The administration (i.e.: Geithner, et al) wants to negotiate a $20-$30 billion mortgage mod for homeowners. But, the truth is much more pathetic...
Here are two reasons why...
1.) The government has funds, ALREADY AUTHORIZED BY CONGRESS, to pay mortgage co's to do this! So, the mortgage co's, to a great extent, ARE NOT SPENDING A DAMN CENT in this "payback." In fact, they'll make a nice profit, even on this travesty!
From the Pulitzer Prize-winning folks over at ProPublica in the past 10 days:
The Treasury Department set aside more than $37 billion from the TARP for two programs meant to help struggling borrowers, but little more than $1 billion has been spent.
HAMP has used so little of its funds [28] for a couple of reasons. It provides incentives for mortgage servicers, investors and homeowners only for completed modifications, but the program has achieved relatively few. Also, the incentives are paid out over five years for each loan. In a report in December, the Congressional Oversight Panel [29] estimated the Treasury would ultimately spend only about $4 billion.
About $7 billion was set aside for the Hardest Hit Fund [30], which provides subsidies to states for various foreclosure prevention programs. That, too, has been slow to get off the ground. Only $104 million has been spent so far.
2.) The amount of money that'll get back to Main Street won't (or will only barely) even cover ADDITIONAL losses mortgageholders are projected to be hit with over the next few months--never mind the $6 trillion they've lost to date.
In other words, based upon mortgageholders' losses to date, and at the very, very low/conservative end of those nos., as projected they'll continue through 2011, we're looking at a "new" mortgage mod fund that really doesn't even cover projected mortgage depreciation over the next nine months, let alone the travesty that's occurred in the previous 30 months!
My nos. are all based upon the most recent avg. home valuations and losses on Main Street by our own government!
The median mortgageholder in the U.S. has only a paltry 2.5% equity stake in their home, at its CURRENT valuation. With a nominal 5%+/- devaluation in home prices between now and year's end, that becomes, roughly, 2.5% UNDERWATER being the median point for U.S. homeowners in the U.S.
The Geithner/Obama proposal, after everything's said and done, should get the typical homeowner back to where they ARE today, as of the end of 2011; and that's if the federal government does and outstanding job of "negotiating" on behalf of Main Street in coming weeks.
It's no wonder the NYT's Gretchen Morgenson tells us it's a travesty, Yves Smith calls this a "whitewash," and Paul Krugman just called it "Another Inside Job."
This is the saddest fucking joke played on Main Street yet.
I've also referred to this in numerous diaries, paraphrasing myself, as the biggest, stealthy Wall Street bailout in history, happening right in front of us, as we blog. For more on this, see my diary from February 4th: "Endgame."
As Krugman's noted twice this week and in the last words of his column, today, we have two critical areas of our economy, housing/mortgage fraud and joblessness, where...
"...Washington doesn’t seem to care about any of that. And you have to wonder what it will take to get politicians caring again about America’s forgotten millions."
Krugman's been hitting it out of the park this week...and that's a good thing!