An Article by:

Ben Tanosborn

Subprime loans, my foot!  That subprime fiasco, which is likely to mount losses between one-half and one trillion dollars, is just a small part of the true real estate problem which little by little is starting to take shape; a problem that Wall Street, politicians, economists, and the public at large have been unwilling to talk about, much less confront.  And that is, the multi-trillion dollar excess valuation of real estate in the nation, in both residential and commercial markets; something which for the next 3 to 5 years, at a minimum, will have the US immersed in a recession, a modified version of the one experienced in Japan throughout the 90’s and the first 2 years of the new millennium.

With that introduction, and my crystal ball over a table at center stage, I bring a vision that comes into focus as realities zoom in; a vision which could change drastically the way Americans will be looking at politics by mid-2008 with elections just four months away.  By then, there will be two candidates in place running for the White House, with an overwhelming majority of Americans wishing there was somebody else they could vote for, someone able to get them out of a snowballing real estate mess, then starting to accelerate.  Unfortunately, it will be too late, and we’ll be stuck with two candidates from two parties that always get us into these predicaments that economists and politicians simply dismiss as economic cycles that clear our capitalist system of these so-called excesses, what some describe as accumulated economic debris.

Economic cycles perhaps… but very definitely predictable and largely avoidable.  At least the government should advocate and adopt policies that can dampen, flatten that economic sine wave that dislocates not just capital, but people’s lives.  These cycles have less to do with the workings of a free market, and a lot more to do with lack of necessary governmental controls to curb irresponsible, illicit business conduct and also restrain greed out of control, as it’s always the case with real estate, creating what some may consider punitive levels of taxation.  But, of course, our love of predatory capitalism does not permit any tampering with the Wild West way of doing things.

Realtors throughout the country, in their ever present monopolistic ways and self-serving behavior – holding a good part of the blame in our present state of affairs – continue heralding their lies, forecasting that housing will buck up next year.  Never mind that prices have nowhere to go but down, 20 to 30 percent depending on which metro area or region.  They and those who suck from the same udder – the local newspapers for one – are inundating us with ridiculously optimistic articles and informational data skewed to tell us something they wish to be true, but that is not.

Polls tell us that most people feel that their houses are keeping their value.  Of course, that will always be the case until they have a true, non-speculative, “need” to sell; home prices, more so than commercial properties, have always been sticky, sliding down slowly in contrast with the exuberance exhibited on the way up during those greedy and obscene “flipping days.”  And now that we have reached the limits of affordability and have touched the ceiling, we simply have no room left to grow… just like the price of tulip bulbs in Holland almost four centuries ago.  Has it occurred to Realtors, or anyone else for that matter, that when you talk about housing costs you have to go beyond the mortgage payments and include all other associated expenditures including those of maintenance and energy costs required to keep livable those 2,000-3,000 sq. ft. palacettes?  Undoubtedly these things are known but kept in the hamper with all the other unmentionables, but laundry day has finally arrived. 

This past weekend, Portland-Oregon, an area touted as one of four in the nation where residential real estate prices “presumably” remain steady, was home to the largest homes-auction on record, 240; all owned by one builder.  There were 141 homes sold, all but 6 of them below the so-called “reserve price” which according to the builder, Pollock, represents “his cost”… which can mean just about anything – believe me, I know; that’s my field of expertise in an industry that I intimately know.

But I didn’t have to attend the auction. I already knew that prices in this metro area have decreased from 10 to 15 percent of those a year ago, although Realtors and builders tell us a much different story, drawn from flawed or skewed data, to prove a senseless argument that they are sure to lose.  And here in the Portland-Vancouver area we still have a long way to go, perhaps another 15 to 20 percent drop in prices… or more.

And with little or no equity in our homes, overnight we have become from “psyched rich” to “resisting poor”… with our ATM-homes unable to spit out any more funds, and our homes finally becoming what they always were: brick, mortar and a roof over our heads… and absolutely nothing else.

But these real estate ills are not all our wonderful Fed has bestowed on us in its desire to please the White House; as if that weren’t enough, they have marched us into an era of stagflation.

© 2007 Ben Tanosborn
www.tanosborn.com

Tags: economics, economists, economy, plastic, policy, politics, social responsibility
Categories: Commentary, Economics, Politics, social responsibility
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Countdown towards an economic bloodbath has already started!  For those required by their religion to accept the mystery of the Holy Trinity, some wisdom should come from the unraveling of the other (financial) “holy trinity”: debt, price of oil and value of the US dollar.  Father, Son and Holy Spirit are three distinct, different persons in one only God according to Roman Catholic dogma; while that god in doctrinal American capitalism is represented by debt, oil and a “fleeting dollar;” all distinct, different… yet, intertwined. 

A few contrarian-apprentices in Wall Street are beginning to question whether the sheer strength of our economy, and the globalization of our major corporations, will be able to sustain current Wall Street market figures, or even 2007 closings without any gains this year for the DOW, S&P 500 or the supremely and ever-volatile NASDQ.  Naysayers are still but few – or at least appear reserved in their comments – afraid they may be treated with similar disdain as those biblical prophets of doom who, although wise-appearing to generations in the future, often seemed as laughable goats to their contemporaries.  

Worry not, we are told; things are hunky-dory in every respect!  Yeah, we are surging in unstoppable ways, militarily and economically; if we don’t believe that, let’s ask the man who lives in the White House, our Soothsayer-In-Chief.  Things are just bushy-swell!  

Just four hours ago I was listening to Fed Chairman Bernanke giving Congress’ Joint Economic Committee another diluted version of things to come… from the same bucket of bullshit that his predecessor Greenspan often brought up from that Econophoria well during two decades.  Both always appearing so convincingly honest… except that what we are being fed by the Fed is nothing but a teaspoon of truth diluted in a large bowl of liquefied bullshit.  Bottom line: we are up to our waist in economic doo-doo; and making such declaration would be tantamount to a confession of persistent criminal silence and lies inflicted by our political leaders, and their advisers, for over a quarter of a century.  

All we seem to need is just another fix, or two, or three, or ten more… from that soother of pain, the Fed; another round of borrowing, or two, or three, or ten more… from our children, grandchildren, great-grandkids, and even those twice-great grandkids, so that merrily we may continue enraptured in our permanent state of blind Econophoria. 

Econophoria… the state of grace in which we, Americans, are born, naturalized into, or even “illegally” adopted.  Just as other poor souls are said to come into the world with an “original sin,” or all too often the curse of poverty, we’ve been born with an “original exceptionality” and blessed with self-multiplying wealth… as if manna from heaven. 

Now we are rolling the carpet of pain for the upcoming recession and putting the blame in the “sub-prime” problem of the housing market, and the inability of capitalism sans controls to police itself.  But that is only the beginning, the first layer of a putrid onion-market in housing and commercial construction that has added trillions of dollars of non-existing value to an economy that has cannibalized itself, or rather the future well-being of generations to come, asking them to pay for all the phony consumption-growth we’ve managed to have in the United States and, by imitation, in other parts of the world. 

We have been misusing most of the existing eleven leading indicators for domestic economic performance to the point of utter ridicule.  Does it make any sense to have our Gross Domestic Product overly inflated in terms of consumption?  Or, that the CPI and the way we measure inflation give not just an imperfect way to weigh what should be a representative bundle of goods, and a way to track rising prices, but an unfunny, crude joke?  Or, that the employment indicators measure raw numbers of ever lower paying jobs, instead of a change in payroll constant dollars relative to population?  Or, that the Consumer Confidence Index is totally meaningless for a population being kept ignorant, in the dark, or even lied to? 

And to top it all, we continue to live in the stupor of Econophoria! 

It remains to be seen whether or not we’ll be going into another series of rounds propping-up the economy, just keeping the faux façade for another year until the next presidential election is over.  But just how many generations can we enslave: two, three… a dozen?  Our good chairman of the Fed doesn’t seem to think there is any harm in shifting the wealth of the working class to keep the castles of cards of the super-rich from tumbling; or even switching corporate responsibility to additional government guarantees which would bankrupt this nation, leaving us with just one asset that we would fully, unencumbered, own: a nuclear stockpile to tempt us with mass suicide.   That brings up the question: would China be interested in buying this stockpile in exchange for all our treasury notes in their possession? 

Well, the sooner the economic bloodbath comes around, the sooner we’ll come to the realization of what this government is all about, bringing up the possibility of true reform: a true conservative domestic policy to march alongside a totally revamped foreign policy that can permit us to live in peace and harmony with all our global neighbors. 

© 2007 Ben Tanosborn 

www.tanosborn.com     

Tags: economics, economy, policy, politics
Categories: Commentary
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As much as I’ve always enjoyed Ogden Nash, the poet, I must confess that many of his writings have impacted me as if coming from the wisdom of a philosopher rather than the wit of an accomplished light verse mechanic. And, among his many vignettes, there is one that seems to have stayed inscribed on my head, as if sentry in eternal vigilance.

“There is only one way to achieve happiness on this terrestrial ball,” says Nash, “and that is to have either a clear conscience or none at all.” As hard as I search for another type of accommodation where happiness can reside, conscience needs to be part of it, either by its presence or by its absence; conscience and the state of well-being appear irremediably intertwined. Of course, such conclusion in my part stems from defining conscience as the awareness of a moral-ethical aspect to
one’s conduct together with a forceful desire to prefer right over wrong.

And therein lies the problem; we all claim ownership of a conscience… but what we are obviously lacking is a common conscience. How else can you explain a nation of over 300 million people, one would guess happy for the most part – if consumption is at the very least a low level indicator of that happiness– allowing their leaders to commit high crimes against humanity day after day of their lives? Directly, via orders carried out by the military in Iraq, Afghanistan and lesser known locations; or indirectly, via outright threats to groups and nations,
or via bully resolutions most often inflicted as sanctions; economic punishment, as a rule, on undeserving peoples or nations, such as Cuba, or Iran, just because we judge the political behavior of their leaders out of step with ours.

Two happenings this past week give us a telltale of what political America is all about, at least with reference to its foreign relations component. On Wednesday, our
Lecturer-In-Chief decided that it was high time – after four years – that he tell those loyal Cuban-Americans that populate Florida plus a splattering elsewhere, and who for the most part are die-hard Republicans, that Castro and his revolution remain anathema to this
US. Then, on Saturday, the dove in America’s conscience had been scheduled to spread its wings for peace, at least in some major population centers. Sadly, what a telltale on both counts!

Hollow in moral authority, here is George W. Bush  lecturing the world about a sovereign nation just a
hundred miles away, in a preface to a wake for Fidel, submitting to the people in Cuba, as well as the rest of the world, the need for a regime change; and, in a shameful act, urging peacekeepers of the nation – police and military – to turn their backs to those in charge. Something reminiscent of America’s ever presence in
other nations’ internal affairs, not out of idealistic friendship for people of those nations, but solely to serve the interests of powerful groups in this United States – wasn’t that what we told Chile’s police and military to help bring down Allende and install Pinochet?

If America wishes for other nations’ governments to evolve and perhaps resemble our own – which is beginning to look more and more like a joke or even a death wish – why is it that our government’s efforts always seem to be directed in a counterproductive way? Why must America resort to military threat, or economic sanctions that kill and impoverish people, but do
absolutely nothing to enlist minimal change or even low level accommodation? Our decades-long sanctions against Cuba, not Castro, have made us only enemies of 11 million Cubans, even if one-quarter million hard-core anti-castristas exiles command some attention because of their votes in Florida. The latter, something that might soon change, as Cuban-American voters, chiefly
Republicans, have become a minority (45%) among Hispanic voters in Florida, where they represented 80 percent just a decade ago.

And non-Cuban Hispanic voters tend to vote with equal fervor… but for Democratic candidates.  US-instigated UN sanctions in the 90’s against Iraq, not Saddam Hussein, only did succeed in the hush-hush infanticide of at least one-half million Iraqi children, doing absolutely nothing else. And the sanctions imposed against the Palestinians post-Hamas victory in the 2006 elections… by the US,
Israel and the me-too Europeans only brought pain and suffering, while also being instrumental in a fratricidal conflict and territorial fragmentation; and a resumption of a exclusionary peace process that is invalid and destined to fail. Now it’s sanctions against Iran,  America’s enemy-du-jour!

Of course, the peace marches on Saturday did not amount to much. They never do. It’s the same decent people with conscience, few others bothered to join.
Just because in these last four years Bush’s popularity ratings have plummeted from 80 to 30 percent, that doesn’t mean that 50 percent of the people have developed a common conscience towards peace and goodwill; only that they don’t care for the Current
Occupant of the White House, as Garrison Keillor would say.

Decency doesn’t seem to be contagious. Have you ever asked yourself how many of your “happy” neighbors have a clear conscience… and how many just don’t have a conscience at all? I bet Ogden Nash knew about the conscience-status of his neighbors.

Ben Tanosborn

www.tanosborn.com

Tags: policy, political parties, politicians
Categories: Commentary
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by Bill Templer

The figures are not yet in for CEO salaries stateside in 2005.  In 2004, CEOs of America’s 500 biggest companies got a whopping aggregate pay raise of 54 percent, with the average CEO of a major company receiving $9.84 million in total compensation. According to Forbes magazine, their total compensation as a super economic elite was US$5.1 billion, up wildly from 3.3 billion in fiscal 2003.

The remuneration pyramid is something working class people know is abominable. And apparently as ‘American’ today as apple pie.  People are well aware: that pyramid, with most workers and families pretty much at the bottom, is getting higher and higher. In 1980, the average CEO in a major American firm was making about 42 times as much as non-supervisory workers at the bottom of the Great Pyramid. By the mid-90s, that had increased to a multiple of 160.  Five years ago, the estimate is that CEOs were paid salaries on average 460 times (!) as much as the ordinary bottom rung of workers in their own firm. Meanwhile, the highest echelons of corporate America are awash with criminality and fraud. Hard to count the number of CEOs who have pillaged their companies while workers have paid the price. Most of the largest bankruptcies in American history have taken place since 2001.

And who is paying for executives’ errors? Right: the workers.  As David Zweifel recently noted in The Progressive Populist:

Unionized workers at Delphi Corp. are being asked to take a two-thirds pay cut while the once-healthy auto parts maker deals with bankruptcy. GM workers have voted to pay at least a billion dollars more of the corporation’s health care costs. Indeed, companies across the land are asking for and receiving wage reductions from workers in every field from the airlines to the grocery business.
(Vol. 11(20), Nov. 15, 2005, http://www.populist.com/05.20.html )

Companies dare to claim these cutbacks are “essential to stay competitive” in a globalizing economy.  Zweifel spotlights another facet in this bundle of contradictions:

Further, a new survey by the Kaiser Family Foundation and Health Research and Educational Trust reveals that the percentage of businesses that offer health insurance to their workers has dropped to 60 percent, compared to 69 percent in 2000 and 66 percent in 2003. Heaven knows what it will be next year.

And he wonders: “It all seems backward, doesn’t it?”

Backward, yes. But none of this is a secret. Under the impress of our great Dream Machine, such knowledge often gets smothered by the incessant spin of the Spectacle, the mind-numbing inundation with images, the subtle kind of brainwash into conformity that is ‘hegemony.’ As linguist Julian Edge phrased its chemistry:

that we act in ways that reinforce the power structures that control us because, in the end, we see it as being in our interests to do so. We may do this consciously or unconsciously. …  We have choices, albeit constrained by the over-arching systems and power structures of ‘the way things are.’
(http://www.developingteachers.com/articles_tchtraining/intlpolitics_julian.htm )

‘The way things are’: a handful of giant corporations own or control nearly all newspapers, TV networks, radio stations, sports teams, movie companies, book publishers, and other sources of information, ‘infotainment’ and distraction, engineering our vast depoliticization  constructing and reproducing our alienation.

Yet ordinary working people can cut through the fog and doubletalk. They understand that this Great Pyramid of inequity in pay and possessions is the ugly face of their own exploitation. Maybe they don’t use that word, but call it unfair, unequal. The scales of pay in a populist economy will be a lot fairer, looking far more like the plains of Kansas than the slopes of Mt. McKinley.

America in 2006 is more polarized economically than maybe ever before. Though the contradictions may remind some of the 1880s and 1890s, when the first Populist movement emerged as a powerful force of protest, especially across the American Midwest.  The gap today is pretty mind-boggling. And anything but democratic: the top 1 percent owns more than 40 percent of total wealth in this country, and over 80 percent of assets like stocks and bonds. In 2002, the top tenth of 1 percent, the wealthiest 130,000 households, had some $505 billion in income,  averaging a cool $4 million a piece. Meanwhile, some 25 percent of all wage workers earned less than the official minimum hourly wage.

Along with some nine million workers officially unemployed in the U.S., there are maybe another five million not counted, considered “discouraged” and hard-core unemployed, not looking for work anymore. Another  25 million are working part-time, most for low pay and few benefits. Median household income over the past few years has been falling, especially in the Midwest, due to job losses in manufacturing and the relentless dynamo of outsourcing. Real wages have generally stagnated or even declined since the mid-1970s, and American workers have been compelled to work longer and longer hours just to pay their bills.

Have working hours for the average full-time worker really increased over that same period? You bet they have: statistics indicate up from 1,720 a year in 1973 to about 1,900 hours a year in 1998. That’s a rise of nearly 180 hours, or the equivalent of more than four additional weeks (!) of work per year if you average it out. Universities and public schools today are full of a growing mass of ‘adjunct’ or ‘contingent’ teachers, with low pay and no job security. 

In Europe, this ballooning phenomenon in the workplace in industry and the service sector is now known as ‘precarity’ in labor, and is spreading fast. The British call it ‘casualisation of the workforce’ 
(http://www.anarkismo.net/newswire.php?story_id=1828 ).

Everywhere it means massive new job insecurity under the impact of neo-liberal capitalist agendas. And people often holding down more than one ‘contingent’ job just to make ends meet.  Working people, blue-collar and white-collar, know this. Many college graduates have joined that club.

Their anger is palpable, often expressed in a refusal to even bother to get involved in anything political, let alone vote — a vast sense of political impotence. And disempowerment in the workplace, no unions or totally co-opted ones, though the struggle for worker-controlled unions continues
(http://www.ainfos.ca/ainfos336/ainfos22174.html ). 

The Populist Party has to speak to that gut awareness, that disaffection, and build on it, become a vehicle for its articulation, as its predecessor sought to become over a century ago. The July 1892 platform of the Populist Party stated it well:

The conditions which surround us best justify our cooperation; we meet in the midst of a nation brought to the verge of moral, political, and material ruin. … The people are demoralized … The newspapers are largely subsidized or muzzled, public opinion silenced, business prostrated, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists. … The fruits of the toil of millions are badly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the Republic and endanger liberty. From the same prolific womb of governmental injustice we breed the two great classes—tramps and millionaires.
(http://www.wwnorton.com/eamerica/media/ch22/resources/documents/populist.htm )

Sound familiar?  The party needs to project an alternative vision of a democratic people’s economy beyond this exploitation, these steep Great Pyramid differentials in income and wealth – and voice.  Populist proposals for greater self-determination have to be drafted. Workers need an economic bill of rights. In firms run by workers’ committees and not ridiculously overpaid CEOs. Some useful ideas on remuneration within a “participatory economic vision” can be found  in Michael Albert’s Parecon: Life After Capitalism  (Verso 2003).  Pay scales are at the core of economic democracy: the “economic bill of rights” 2000 platform proposal from the Greens/GPUSA, the smaller and more radical, now almost defunct wing of the stateside Green movement, is worth  discussing, reinventing (http://www.greenparty.org/program/econbor.html ). Populist economic thinking can tap past progressive imagination and analysis, while forging new conceptions that speak to people’s needs and dreams.

We would do well to remember the vision of the Populist orator Mary Elizabeth Lease, the ‘People’s Joan of Arc,’ speaking to women in Kansas in 1890, urging them to join the ‘Alliance.’ In the interim, less has changed than some think:

Let no one for a moment believe that this uprising and federation of the people is but a passing episode in politics. … We seek to enact justice and equity between man and man. We seek to bring the nation back to the constitutional liberties guaranteed us by our forefathers. … Crowns will fall, thrones will tremble, kingdoms will disappear, the divine right of kings and the divine right of capital will fade away like the mists of the morning when the Angel of Liberty shall kindle the fires of justice in the hearts of men. “Exact justice to all, special privileges to none.” No more millionaires, and no more paupers; no more gold kings, silver kings and oil kings, and no more little waifs of humanity starving for a crust of bread. No more gaunt faced, hollow-eyed girls in the factories, and no more little boys reared in poverty and crime for the penitentiaries and the gallows. … when we shall have not a government of the people by capitalists, but a government of the people, by the people.  
(http://historymatters.gmu.edu/d/5303/)

Tags: ceos, corporations, democracy, economy, labor, policy, populist
Categories: Commentary, Economics, Democracy, Labor, Corporations
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