The US
Economy is Terminally Ill
excerpt
from, "Occupying
America: We Shall Overcome"
by Rev. Paul
J. Bern
Another
area of horrifying ineptitude being orchestrated by the US
government, or more accurately “Fannie Mae” and “Freddy Mac”
who regulate the home mortgage industry, is that of the current and
ongoing foreclosure crisis. By now everybody knows all too well about
how people are being thrown out of their homes due to some very shady
practices perpetrated by real estate companies, mortgage lenders and
brokers, and especially the big banks. As I wrote in my previous
book, in over half the foreclosure cases being heard in court the
lending institutions can't prove that they are the mortgage holders
because they can't produce any proof of ownership. The financial
industry, and Fannie Mae in particular, took back many of these homes
from their owners illegally, and the American public has figured it
out and they are very pissed off about it, and rightfully so. But it
gets even worse than that. The banks and other lenders, led by an arm
of the Federal Government, were so greedy in repossessing all those
hundreds of thousands of houses that they forgot to take into account
the upkeep costs associated with holding on to these properties. As a
result, they got a lot more than they bargained for. Such
is the case for mortgage giant Fannie Mae, which as of March 31, 2012
had a mind-boggling 153,000 foreclosed homes on its books. One
example — mowing the lawn. Fannie Mae owns this home, so it's
paying a lawn crew to come every few weeks or so to keep up the curb
appeal. Fannie Mae officials won't say how many lawns it's paying to
maintain, so I did some back-of-the-envelope calculations myself.
Say
only half of the homes have lawns, a conservative estimate, that's
still more than 75,000 lawns.
153,000/2
X
6 (a six-month grass-clipping season)
X
2 (mowing twice a month)
X
$40 (a reasonable guess at how much it costs to mow a lawn)
=
$36.7 million
Again,
this is a very rough estimate, but that's a whole lot of money to
spend on lawn care. Fannie Mae's tab from U.S. taxpayers is up to $86
billion since September 2008 when it was taken into government
ownership. In just the first quarter of this year, Fannie racked up
$488 million in foreclosure-related expenses, including holding costs
(insurance, taxes and maintenance); valuation adjustments for changes
in market value; gains/loss when the property is sold; legal fees;
eviction costs; weatherization costs to prevent the pipes from
bursting; costs to secure the property; and repair costs.
And in the
meantime, what happens to all the dispossessed people who have lost
their homes? For the lucky ones who still have their jobs, it's not
so bad. They can just go and rent another home, although in that case
I think it would be wise to move as close to your job as you can –
you'll save a lot of time and money that way. But what about all the
rest of these unfortunate individuals whose entire world has been
destroyed by long-term unemployment and the loss of their homes,
their savings, and in many cases even their transportation?
For example, the homeless population in New York City has risen to
never before seen levels, according to a recent report published by
the advocacy group Coalition for the Homeless. A staggering 113,552
people slept in the city emergency shelters last year, including over
40,000 children. The total marked an 8 percent increase from the
previous year and a 37 percent increase from 2002. The report also
highlighted the growing number of families sleeping in shelters at
nearly 29,000 families in the system, an increase of over 80 percent
from 2002 levels (another record). Also skyrocketing was the number
of families who had previously spent some time in the shelters
returning for further aid, now approximately half of all those
receiving assistance. However, even these numbers in fact drastically
underestimate the true scope of the homeless crisis in New York City.
According to the NYC Department of Homeless Services, 64 percent of
those applying for emergency shelter last year were denied it.
Meanwhile,
the rents in New York City are reaching astronomical levels.
According to data available from the National Low Income Housing
Coalition, the “fair market” rental rate for a two-bedroom
apartment in New York is $1,359. Housing advocates typically consider
affordable rates to be no more than a third of the family income.
Thus, a family in New York City must earn at least over $54,000 to
find an affordable home. The median household income for renters in
the Bronx is barely $30,000 a year. For Brooklyn, it is nearly
$35,000. At the same time as this catastrophe for the working class
deepens, the abundance for the top 1 percent – who collectively
earn more than the bottom 95 percent combined – almost defies
belief. Last month saw another record for the largest sale price of a
single condominium: $48 million for a unit in the Plaza Hotel
Residences overlooking Central Park. Under these conditions, the
transfer of wealth from workers to the fabulously wealthy takes on a
criminal character.
To
summarize the situation that working Americans – and particularly
those whose wish to work but are unable to find any – find
themselves in, we are living in a world with a fundamentally flawed
economic system. Capitalism can best flourish so long as the fuel and
energy that it takes to keep it running smoothly can be obtained
inexpensively. It also can only thrive when the citizens or
participants in the system can earn enough disposable income to buy,
swap, trade or barter sufficient resources for a reasonably
comfortable existence. When it is at its best, capitalism has been
not just a way of survival and not just an economic system but an
ideology of profit through the pursuit of personal gain.
Unfortunately, there have been several things occur since the dawn of
the 21st century
that collectively signal the death knell of capitalism, or at least
as we have known it.
The first
aspect is also the most obvious – consumer spending drives 70% of
the US economy. But if American consumers run out of disposable
income, which is exactly what is now occurring, the whole US economy
grinds to a halt. But Washington already knows this and Congress and
the President have found a way to deal with the reality that American
consumers are broke. Simply put, if America can't generate an income
from and drive our economy without consumer spending, then we'll
simply have to find a quick and easy substitute. Don't worry, they
already have, and they have accomplished this by converting the USA
over to a wartime economy, with profits generated by plunder and
military domination overseas since working Americans are tapped out.
The end result is plain to see, and that is crushing unemployment
that has locked millions of able-bodied and industrious Americans out
of the US job market, some of them permanently such as what I
experienced when my own IT career ended prematurely a couple of years
ago.
The second
proof that capitalism is at the end of its life cycle is the end of
cheap sources of energy due to the fact that we are past the point of
“peak oil”. That is, the developed countries of the world have
begun using petroleum resources at a rate that is faster than those
resources can be pumped out of the ground. This has ominous
implications from the standpoint of North American national security,
plus that of Europe (particularly Western Europe and the UK), Israel,
western and southern Africa, and the entire Pacific Rim from Japan
and South Korea down to Australia. Being one who follows world news
very closely, there can be no doubt that opposing sides who also have
designs on these petroleum resources would consist of Russia, China,
and the Muslim nations in North Africa, the Middle East and
Indonesia. If world war three breaks out over this remaining oil,
which looks increasingly likely since the developed countries are
moving too slowly developing alternative energy sources, much of
capitalism's infrastructure will be destroyed. The only way to stop
all of this from happening is to convert to green energy for our
power needs while converting our cars and trucks to run on natural
gas, which America has in abundance, and which burns much cleaner
than gasoline. Most importantly, since natural gas is about one third
cheaper than gasoline, American car and truck owners would see their
fuel expenses drop noticeably, and it is relatively inexpensive to
convert a petrol-powered engine to burn natural gas.
The third
and final side to this triangle of capitalism's demise I can sum up
in one word – disillusioned. After generations of buying new cars,
new houses, new clothes, new furniture and accessories for your home,
and taking on student loan debt to pay for our educations while
paying astronomical medical insurance premiums, people are
discovering that all this interest and fees they have been paying for
all these years has used up all their funds to the point where many
of us are having a hard time getting enough to eat. Suddenly the
American people are discovering that they have been paying way too
much and have been overcharged for years, often for decades, for
almost everything they have ever bought in their entire life. We are
outraged, we are indignant, and we are absolutely furious!
But there
is much deep beneath the surface here, something that surpasses the
mere acquisition of stuff and the shallowness of material pursuits,
something that is – well – spiritual in nature. Disillusionment,
the word I used above to describe the 99%, is running rampant. People
feel cut off from having any economic opportunity, and as a result
they feel unwanted, abandoned and disenfranchised. But in the process
I think that the 99% have collectively become disenchanted with their
profit-and-debt driven economic system that they have been stuck
living with all their lives, blaming it for their descent into
poverty, and consequently the majority of folks have arrived at the
same conclusion: People matter more than goods, community
cohesiveness matters more than the individual, and cooperative
achievement matters more than personal accomplishment. In the
process, people are out-growing their need for personal gain and
their desire for material goods. Materialism is dying and it is being
replaced with its opposite – minimalism, the way of living that
says getting by with less is better. And if mankind's habit of always
seeking “more” is broken, a profit-and-debt driven economic
system cannot survive. If cooperation can replace competition between
people, profits can much more easily be shared by all.
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