Showing posts with label capitalism failed. Show all posts
Showing posts with label capitalism failed. Show all posts

Saturday, December 06, 2008

While Some of Us Are Hoping for Change, Others Are Literally Starving for It

By Chris Hedges, Truthdig
http://www.alternet.org/story/108622/

Elba Figueroa worked as a nurse’s aide until she got Parkinson’s disease. She lost her job. She lost her health care. She receives $703 a month in government assistance. Her rent alone costs $750. And so she borrows money from friends and neighbors every month to stay in her apartment. She laboriously negotiates her wheelchair up and down steps and along the frigid sidewalks of Trenton, N.J., to get to soup kitchens and food pantries to eat.

“Food prices have gone up,” the 47-year-old Figueroa said, waiting to get inside the food pantry run by the Crisis Ministry of Princeton and Trenton. “I don’t have any money. I run out of things to eat. I worked until I physically could not work anymore. Now I live like this.”

The pantry, which occupies a dilapidated three-story art deco building in Old Trenton, one of the poorest sections of the city, is one of about two dozen charities that struggle to provide shelter and food to the poor. Those who quality for assistance are permitted to come once a month and push a shopping cart in a U shape around the first floor where, clutching a piece of paper with allotted points, they can stock up on items using the pantry’s point system according to the number of people in a household. The shelves of the pantry hold bags of rice, jars of peanut butter, macaroni and cheese and cans of beets, corn and peas. Two refrigerated cases hold eggs, chickens, fresh carrots and beef hot dogs. “All Fresh Produce 2 pounds = 1 point,” a sign on the glass door of the refrigerated unit reads. Another reads: “1 Dozen EGGS equal 3 protein points. Limit of 1 dozen per household.”

The swelling numbers waiting outside homeless shelters and food pantries around the country, many of them elderly or single women with children, have grown by at least 30 percent since the summer. General welfare recipients receive $140 a month in cash and another $140 in food stamps. This is all many in Trenton and other impoverished areas have to live on.

Trenton, a former manufacturing center that has a 20 percent unemployment rate and a median income of $33,000, is a window into our current unraveling. The financial meltdown is plunging the working class and the poor into levels of destitution unseen since the Depression. And as the government squanders taxpayer money in fruitless schemes to prop up insolvent banks and investment houses, citizens are callously thrown onto the street without work, a place to live or enough food.

The statistics are already grim. Our banking and investment system, holding perhaps $2 trillion in worthless assets, cannot be saved, even with the $700 billion of taxpayer money recklessly thrown into its financial black hole. Our decline is irrevocable. The number of private sector jobs has dropped for the past 10 months and at least a quarter of all businesses say they plan to cut more jobs over the next year. The nation’s largest banks, including Citigroup, face collapse. Retail sales fell in October by the largest monthly drop on record. Auto companies are on the edge of bankruptcy. The official unemployment figures, which duplicitously mask real unemployment that is probably now at least 10 percent nationwide, are up to 6.1 percent and headed higher. We have lost 1.2 million jobs since January. Young men of color have 50 percent unemployment rates in cities such as Trenton. Twelve million houses are worth less than their mortgages and a million people will lose their homes this year in foreclosures. The current trends, if not swiftly reversed, mean that one in 33 home owners will face foreclosure.

There are now 36.2 million Americans who cope daily with hunger, up by more than 3 million since 2000, according to the Food Research and Action Center in Washington, D.C. The number of people in the worst-off category -- the hungriest -- rose by 40 percent since 2000, to nearly 12 million people.

“We are seeing people we have not seen for a long time,” said the Rev. Jarret Kerbel, director of the Crisis Ministry’s food pantry, which supplies food to 1,400 households in Trenton each month. “We are seeing people who haven’t crossed that threshold for five, six or seven years coming back. We are seeing people whose unemployment has run out and they are struggling in that gap while they reapply and, of course, we are seeing the usual unemployed. This will be the first real test of [Bill] Clinton’s so-called welfare reform.”

The Crisis Ministry, like many hard-pressed charities, is over budget and food stocks are precariously low. Donations are on the decline. There are days when soup kitchens in Trenton are shut down because they have no food.

“We collected 170 bags of groceries from a church in Princeton and it was gone in two days,” Kerbel said. “We collected 288 bags from a Jewish center in Princeton and it was gone in three days. What you see on the shelves is pretty much what we have.”

The largess of Congress to Wall Street bankers and investors does not extend to the growing ranks of the poor. The U.S. Department of Agriculture’s Emergency Food Assistance Program donated $240 million in surplus food in 2003 to food banks and other programs. Those donations fell last year to $59 million.

States, facing dramatic budget shortfalls, are slashing social assistance programs, including Medicaid, social services and education. New Jersey’s shortfall has tripled to $1.2 billion and could soar to $5 billion for the next fiscal year. Tax revenue has fallen to $211 million less than projected. States are imposing hiring freezes, canceling raises and cutting back on services big and small, from salting and plowing streets in winter to heating assistance programs. Unemployment insurance funds, especially with the proposed extension of benefits, are running out of money. Governors such as Arnold Schwarzenegger in California and David A. Paterson in New York have called special legislative sessions to deal with the crisis.

If Barack Obama continues to turn to the elites who created the mess, if he does not radically redirect the nation’s resources to assist the working class and the poor, we will become a third-world country. We will waste gargantuan amounts of money we cannot afford on our military, our national security state and bloated corporations while we damn the middle and working class to the whims, idiocy and greed of an entrenched, corporate oligarchy. Obama’s appointments of Timothy Geithner as treasury secretary and Lawrence Summers as director of the National Economic Council are ominous signals that these elites remain entrenched.

Dolores Williams, 57, sat in the cramped waiting room at the Crisis Ministry clutching a numbered card, waiting for it to be called. She has lived in a low-income apartment block known as The Kingsbury for a year. Two residents, she said, recently jumped to their deaths from the 19th floor. She had a job at Sam’s Club but lost it. No one, she says, is hiring. She is desperate.

She handed me a copy of The Trentonian, a local paper. The headline on the front page read: “Gangster Slammed for Bicycle Drive-By.” It was the story of the conviction of a man for a fatal drive-by shooting from a bicycle. The paper, as I flipped through it, was filled with stories like these, the result of social, economic and moral collapse. Poverty breeds more than hunger. It destroys communities. There was a report about a 56-year-old woman who was robbed and pistol-whipped in the middle of the afternoon. There was an article about the plight of four children whose two parents had been shot and seriously wounded. “Libraries OK Now, but Future Is Murky” a headline read. Another announced: “Still No Arrests in Hooker Slayings.”

“It is like this every day,” Williams said.

So while our nation crumbles, physically and morally, while our empire implodes, while our economy tanks, the bankrupt elites who got us here play the merry-go-round game of power in Washington. They will continue to oversee our demise, including the obscene drain of our military and security budget, which now accounts for half of all discretionary spending. Pentagon officials have reportedly asked the Obama transition team for $581 billion, an increase of $67 billion. This increase does not, of course, include the $3 trillion for the wars in Afghanistan and Iraq. We will pay these loans later.

Banks, automotive companies and investment firms, all sinking under the weight of their own incompetence and greed, head to Washington, usually in private jets, to engage in the largest looting of the treasury in American history. And Congress doles out our money without oversight in the greatest transference of wealth upwards in modern times.

As this pitiful march of folly rolls forward, children in Trenton and across America go to bed hungry.

Chris Hedges, a Pulitzer prize-winning reporter, is a Senior Fellow at the Nation Institute. His latest book is Collateral Damage: America's War Against Iraqi Civilians.

Saturday, November 22, 2008

Keep it Simple: Stop the Foreclosure Crisis with the Right to Rent

By Dean Baker, TruthOut.org
http://www.alternet.org/story/107572/

Politicians often prefer complex solutions to simple problems. Nowhere is this more apparent than with the long list of complicated and convoluted proposals to address the country's foreclosure crisis.

Millions of people face the loss of their homes over the next few years. While the politicians in Congress have developed a wide variety of complex schemes in order to hold back this flood of foreclosures, including one passed into law last summer that provided up to $300 billion guarantees for new mortgages on homes facing foreclosure, none have had much impact thus far.

The unavoidable problem with these schemes is that it is difficult to design a plan that aids families facing foreclosure without giving an incentive to other homeowners to also default on their mortgage. In addition, it is hard to justify taxing the people who are struggling to keep up with their own mortgages in order to help those who default. It is even harder to justify taxing ordinary people to help out the bank executives, who issued hundreds of billions of dollars of bad loans.

As a result, to date these programs have not prevented a tidal wave of foreclosures and evictions. The number of foreclosure filings (there are typically two or more filing for every actual foreclosure) is now approaching 300,000 per month.

For those not offended by simplicity, there is an easy solution. Congress can temporarily modify the rules on foreclosure to give families facing foreclosure the right to rent their homes at the market rate for a substantial period of time. Rep. Raul Grijalva proposed such a change in the Saving Family Homes Act, which would allow homeowners the option to remain as renters for up to 20 years following a foreclosure.

This bill would immediately give families security in their home, so that if they like the home, the neighborhood, the school for their kids, they would have the option to stay in the house for a substantial period of time. This also has the great benefit for the neighborhood that homes will remain occupied.

Perhaps more importantly, this change in foreclosure rules will give banks a real incentive to negotiate conditions under which homeowners can stay in their homes as owners. Banks do not want to become landlords. The bank will own the house after a foreclosure, but a house with a renter is worth much less to them than a house over which it has complete control.

Giving the homeowner the right to stay as a renter hugely increases their bargaining power with the bank. The result of this change in foreclosure rules is that far more homeowners are likely to remain in their homes as owners.

The beauty of this sort of proposal is that it is simple, can take effect immediately, it requires no taxpayer dollars and no new bureaucracy. It also is not giving anyone a big bonanza. Homeowners are not likely to line up for a process that could end up with them being renters. And the banks will obviously not be thrilled about a rule change that will leave them worse off in trying to squeeze money out of homeowners.

While the basic point of the right to rent is simple, it can be extended in various ways to further aid homeowners. Bernard Wasow, at the Century Foundation, has proposed some additional measures to facilitate the transition to rental status or possibly a return to ownership. Daniel Alpert, of Westwood Capital, has a somewhat different version that creates a mechanism for homeowners to buy back their homes after five years.

In short, if people want to add bells and whistles, it is easy to do so. But, the key to stopping people from being thrown out of their homes is simply to change the law that allows people to be thrown out of their homes. That one is so simple that even a policy wonk should be able to understand it.

Dean Baker is co-director of the Center for Economic and Policy Research.
© 2008 TruthOut.org All rights reserved.
View this story online at: http://www.alternet.org/story/107572/