Category Archives: Income disparity

Doug Smith: A Stiletto In The Back Of Sane Housing Markets

By Douglas K. Smith, author of On Value and Values: Thinking Differently About We In An Age Of Me

The recent federal budget deal eliminated $88 million of HUD funding for non-profit housing counselors. According to this report, these groups use roughly half the funds for foreclosure counseling and half for homebuyer education and qualification. The report says a separate foreclosure counseling effort is also being reduced by $65 million.

Historically, non-profit housing groups focused on low-income folks. But, for many years, people with moderate incomes – nurses, police, teachers and others in what used to pass for the middle class – have also sought help. The core purpose of the non-profits is simple: help people achieve affordable home ownership. This entails educating them on the realities of ownership, helping them shift credit, consumption and savings behavior, advising on how to avoid the worst practices of real estate and mortgage brokers — even at times doing lending. All of which together means, in effect, doing the real work of underwriting that has long since been abandoned by the too big to fail banks who, in their eagerness to increase volumes and squeeze out costs through technology and ‘modeled’ strategies, eliminated the capacity for this careful work.

Most non-profit groups are quite good at what they do. Yet, Obama, Boehner and others have now taken resources away from these groups. These cuts are cruel. They are also mind-numbingly stupid.

William Hogeland: Created Equal? Founding Era Tensions on Economic Fairness

Whiskey Rebellion and a collection of essays, Inventing American History who blogs at http://www.williamhogeland.com. Cross posted from New Deal 2.0

In 1776, rowdy Democrats fought for equality. But their notions didn’t suit early elites.

“All men are created equal,” the Continental Congress famously announced in the document that came to be known as the Declaration of Independence. These are powerful words — and reflecting on America’s founding struggles over money and finance can give the familiar phrase new resonance. For even as Thomas Jefferson was drafting the Declaration in a small, hot room in Philadelphia in the summer of 1776, the democratic popular finance movement was blooming in America. Throughout the country, ordinary people placed all hopes on America declaring independence from England. Equality was indeed their goal. And by this, they meant economic fairness: A newly level playing field where they could compete for prosperity.

Near the room where Jefferson wrote, the most successful of those democratic movements was coming to fruition in Philadelphia’s Carpenter’s Hall. To the artisans, laborers, mechanics, and militia privates gathered there, declaring independence from England offered an amazing chance for creating a new kind of government, fostering fairness for the less propertied, even the unpropertied; obstructing traditional high-finance privilege; and giving the ordinary people access to representation and economic opportunity. Right down the street from the Pennsylvania State House where the Congress met, supporters of this democratic movement were seizing the moment of crisis with England to bring about an economic revolution in America. And their 1776 Pennsylvania constitution made economic equality into law for the first meaningful time anywhere.

Our Polarized and Money-Driven Congress: Created Over 25 Years By Republicans (and Quickly Imitated by Democrats)

Political scientist Tom Ferguson prepared a short but important paper for the INET conference last weekend on how Congress got to be as polarized as it is today. His answer: it was redesigned quite deliberately by conservative Republican followers of Newt Gingrich starting in the mid 1980s and their methods were copied by the Democrats. Their changes resulted in firmer control by leadership (ie, less autonomy of individual Congressmen) and much greater importance of fundraising (which increased the power of corporate interests).

The extent of corruption may surprise even jaundiced readers.

Stiglitz Tells Us the Redistribution Fairy is Dead, but She Still Lives in Economists’ Fantasies

Vanity Fair has published a short article by Joseph Stiglitz on how the top 1% aren’t merely taking way more than their fair share, but how they are increasingly organizing the world to make that into a self-perpetuating system. After debunking the idea that the new economic order is a function of merit, as opposed to socialism for the rich and rent extraction, he turns to its destructive features, including:

….perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead…..

Hooray! Jamie Dimon Says New Capital Rules Will Kill Zombie Banks!

It really is a sign of how complete a victory that the banks have won over the rest of us that Jamie Dimon has the nerve to complain about banking regulations. Even worse, he is egging on a effort by Republican bank-owned Congresscritters to roll weak bank capital rules back.

His position is pure, simple, unadulterated bank propaganda: what is good for banks is good for America, when the converse is true. Simon Johnson warned in his May 2009 article “The Quiet Coup” that the financial crisis had turned American into a banana republic with a few more zeros attached, a country in the hands of oligarchs, in this instance, the financiers. And we playing out the same script he saw again and again in emerging economies:

Al Jazeera on Egypt’s Revolt Against Neoliberalism

An article by ‘Abu Atris’ on Al Jazeera (hat tip Richard Kline) confirms an argument made by Matt Stoller in recent post, namely, that the rebellion in Egypt is not merely political but economic, and specifically in opposition to neoliberal policies. This so-called “Washington Consensus” reached its apex of influence in the 1990s

The article focuses on the individuals and groups that profited handsomely during the implementation of “reforms” that syphoned money to the top of that society at the expense of the rest, and how the one beneficiary that remains in a position of influence, the military, might play its cards. In addition to providing a window in some of the dynamics at work in Egypt, it also provides a vivid description of the nature and destructive impact of a neoliberal economic program. It is not hard to see that America has already gone a long way down that dark path.