If there’s one taboo that isn’t discussed enough in the American cultural sphere, it’s money. While this subject often comes up in terms of salary negotiations or pay disparities between sexes and races, there are other ways our lack of education and comfort around discussing money negatively impact us. One example that a lot of people worry about in silence? Mortgages.
Or perhaps more specifically: Foreclosures. Whether you want to own a home or not, there are other issues so big, they can feel abstract: Regulating banks. Bailouts. Why are individuals paying more in taxes than corporations? And who is “too big to fail,” anyway?
Investigative journalist and author David Dayen, who is currently the executive editor of The American Prospect, has answers to these questions and more below, as part of the Making Progress video interview series here at Daily Kos. Talking about bank regulations, financial structures, and even the way these systems impact our immigration policies might feel like insider baseball at first. But Dayen breaks these big concepts down into accessible points that everyone can—and should—digest.
“Right now we are on the pendulum swing away from regulation,” he explains to Daily Kos behind the scenes at Netroots Nation, the country’s biggest conference for progressives. “That's what the Trump administration's been doing practically since they got in. … We need to have a situation where people are more understanding of what is going on within the financial system. And that they talk to their representatives and say, we're not gonna let you get away with that.”
According to Dayen, homeowners deserve a lot more protection in financial crises—and part of the reason homeowners don’t have those protections is because of the aforementioned lack of cultural conversation we have about money. Especially a lack of money.
“We have no cultural history around foreclosure,” Dayen notes to Daily Kos. “We don't talk about foreclosure, it's shunted to the side of our policy debates, and that's why homeowners got a raw deal, that's why borrowers were not protected in the run-up to the crisis and not given relief in the aftermath.”
Check out more of Dayen’s breakdown and analysis in the video below, or follow along with the transcription text.
Question 1: How do greed and corruption play a bigger role in our current immigration policy than most people know?
Well, the immigration agenda that is being carried out right now actually couldn't be done without private companies. I believe the number is 66% of all migrants sleep in beds or on concrete that is managed by a private company. And basically everything that takes place in these facilities is also privately managed through subcontractors, whether you're talking about healthcare or commissary provisions, what have you.
So, it was a considered strategy of the large private prison operations like GEO Group and CoreCivic to branch out into immigration detention, which they saw as a growth opportunity, and I'm not really making that up that's actually in the CEO earning statements and their calls with investors, they see this as part of their survival, moving their model from prisons, which they've had a little bit of a shrinkage where they've shrunk their output into immigration, which as long as we have this divisive kind of nature of that policy is probably something that's going to grow.
So, it plays a vital role and you really, as I said, could not get this policy done in terms of ICE, in terms of CBP, without private companies’ involvement.
Question 2: Thanks to U.S. taxpayers and the historic bailout, the "too big too fail," are larger than they have ever been. What can we do to reel them in?
There's actually a significant amount of work that can be done and should be done. Dodd-Frank, while imperfect, gave the regulators quite a lot of tools if they want to downsize banks they could do that through the FDIC or through the Financial Stability Oversight Council, which is a super-regulator composed of the heads of a lot of the other regulatory agencies. They could actually break up the banks through existing authority right now. If they wanted to move to a different model that promotes financial inclusion, 'cause what we see in the country is about a quarter of all families either have little or no access to the financial system, which is a tremendous hardship.
We could under existing authority right now use something like the U.S. Postal Service to provide a public banking option for families, for every family in the United States potentially, to at least have an account and a prepaid debit card or something like that. There's a lot that can be done to reign in the banks. We don't know what the next financial crisis will look like, but what we do know is that the pendulum swing and the dynamic that happens is very considered, it happens pretty much always this way.
There's a crisis, we re-regulate the system, and then the pendulum starts swinging away from regulation, and then we have another crisis. And right now we are on the pendulum swing away from regulation. That's what the Trump administration's been doing practically since they got in. And because so much discretion is given to the regulators, they have the ability to implement that whether or not anything passes Congress.
I will say that a very bad deregulatory bill did pass in 2018, it was probably the most important bipartisan bill that Trump signed in his first two years, and it was aided by 16 Democrats in the Senate and about 30 or so in the House. And that really represented a troubling trend, because traditionally financial deregulation is a bipartisan affair.
And so, we need to have a situation where people are more understanding of what is going on within the financial system, and that they talk to their representatives and say, we're not gonna let you get away with that, having something you can point to as bipartisan being threatening another financial crisis.
Question 3: What's the most important thing about the mortgage industry that consumers should know?
The most important thing is, I guess they call it what? Caveat emptor, let the buyer beware. What we saw during the financial crisis of 2008, and even before that in the run-up, is that people were sold on deceptive mortgages, on mortgages with onerous terms or mortgage resets that the interest rate shot up after a couple of years. And they were sold on it because they didn't really know what they were getting into, they didn't really know any better.
Financial literacy is certainly not enough, in fact it's a tool used by the banks and the financial companies to get out of regulation. They say, well if we just teach the buyers, the borrowers, then everything will be okay. Well, no. We need much stronger scrutiny and oversight of the mortgage industry.
But I have to say, I still ... I wrote a book about the foreclosure crisis in 2016, so that's going on three-plus years ago, and to this day I still get letters and emails from people who are still going through foreclosure, using phony documents, deceptive practices, and still begging me, can I do something to help. I've become sort of a I don't know, an advisor to these people, and I still get them day after day after day after day, and it just shows you how little has changed. I mean we basically made homeowners invisible in the public policy space. After the financial crisis everything was focused on nursing the banks back to health and not necessarily nursing homeowners back to health.
I had an interesting situation where I talked to a guy who made a movie about the foreclosure crisis, and I asked him how he prepared for it and he said, "Well, the first thing I wanted to do "is look for examples in movies "where somebody was evicted from their homes, "somebody was foreclosed upon." And he said, "The only fiction film I could find "I had to go all the way back to the "Grapes of Wrath" in 1939."
We have no cultural history around foreclosure, we don't talk about foreclosure, it's shunted to the side of our policy debates, and that's why homeowners got a raw deal, that's why borrowers were not protected in the run-up to the crisis and not given relief in the aftermath. And so, the most important thing I think that needs to be known is that we need to make them more present in our debates, whether we're talking about renters or homeowners or anybody with housing. When you're talking about housing it's about the people living in those homes that need to be protected.
Bonus Question: If you could give advice to your teenage self, what would it be?
Wow, that's a great question. I always kinda pushed myself in multiple different directions at once. I was working while I was writing and blogging and things like that. I was always pulling myself in different directions until I found the thing that I was really passionate about. And certainly that could have happened earlier, I could have just gone full-throated into that thing. And I think the lesson there is that you find what it is that motivates you, you find what it is that you're passionate about, the story of yourself that you want to tell, and you just go for it. And that's I think the best advice that you can give anybody.
Want to hear more from the most exciting leaders, politicians, and activists in the progressive space? Then it’s time to check out more Making Progress videos. Daily Kos posts a new Making Progress video to our YouTube page every Tuesday.
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