America faces a housing crisis that it has not seen the likes of since the great depression. Hundreds of thousands of families have lost their homes due to the mortgage crisis in the past year and more are at risk if we don't act now. That is why the US Senate must support some version of the Foreclosure Prevention Act, which passed this past week in the US House. This legislation, which is on its way to the Senate next week has been threatened with veto by President Bush.
As usual, the President is wrong. The President has said that he would veto the legislation if it comes to his desk because he doesn't believe that certain types of people should be rewarded for their bad decisions. What the President means is that poor people shouldn't be protected from predatory lenders and that the government shouldn't have any regulatory responsibilities when it comes to mortgage lenders.
The fact is that this housing crisis could have been avoided. It is the result of twenty-five years of federal deregulation across the board combined with a speculative investment industry gone haywire. A rational person would conclude that after seeing so many foreclosures, maybe there is something wrong with the system. But when it comes to the role of the free market and the responsibilities of the government to legislate for the common good, the Republicans just don't get it. Their belief is that the free market is always the best solution to every problem. Just this week, House Representative Marcia Blackburn of Tennessee said that the foreclosure legislation would "provide a safety net for irresponsibility."
Tennessee's Republican constituency wants to live in the good old days when the poor people knew their place and didn't try to do anything irresponsible like own a home or expect a living wage. Their response to this legislation clearly shows the misdirection of the Bush administration and his Republican supporters. In contrast to that is the message of the progressive left in this country, which has real solutions to the housing crisis, some of which are contained in the legislation currently making its way to the US Senate and some of which is not included. As Americans on the verge of a grave financial crisis, it is important to get a grip on why we are in this situation. It is in large part due to the deregulatory nature of federal policy, which has been encouraged by twenty-five years of conservative and neoliberal administrations.
In a deregulated free market without proper government oversight, poor people are victimized by predatory lenders and cannot count on the government to provide regulatory oversight. This is at the root of the mortgage crisis and the federal government has an ethical responsibility to step in now and attempt to remedy the damage that it could have avoided by placing stricter limits on what lenders can and cannot do in order to get a poor person to sign on to a mortgage.
But in order to really address the root of the housing crisis, the federal government must take steps to address the root causes of poverty, unemployment, low wages and homeless in America. We must take steps now to raise the federal minimum wage to a living wage, which is about $10.50 an hour plus benefits. We must invest in job training and invest in our education system to ensure that all Americans have a chance to attend college. We must invest in affordable housing for all Americans. Finally, we need to invest in quality, affordable, single payer health care.
I believe that we can build a community where all Americans can live with hope. If we stop investing hundreds of billions of dollars on war and violence and invest in our domestic infrastructure, we can begin to rebuild this country. We must begin by paying Americans a wage that a family can reasonably expect to live on. We must ask those who have received the most benefit from our system to give the most by rolling back the Bush tax cuts. We must use the government as an agency of good and regulate the more ruthless elements of a free market. If we fail then we must ensure that the government is there, as a safety net, to make sure that no one falls through the cracks.
My name is Chris Lugo and I am a candidate for the US Senate seat in Tennessee. I am running as a progressive because I believe that the time has come to end the war in Iraq, ensure that all Americans have access to affordable, quality health care and to restore common sense and decency to our national dialogue. For far too long we have neglected the needs of the poor in America, allowing hundreds of thousands in Tennessee to go without healthcare and millions nationally. For far too long we have let our education system be a secondary priority to the military industrial complex.
As a result of these misguided funding priorities we have a graduation rate in Tennessee of only about 60% statewide for high school students and only about one quarter of all Tennesseans graduate from college. We must take solid steps to ensure that all Americans have safe and affordable housing, that we live in a clear and healthy environment, and that we take steps to address the deep divisions of inequity that still persist in our society.
I believe in the American dream and I believe that all Americans deserve the opportunity to have a rich and meaningful life, but the only way to ensure that these priorities are addressed is to make certain that our government makes this a priority, that our elected representatives make peace and social justice a priority on a national scale.
We are at a crossroads in history, and Tennessee faces a choice which we all face. Do we choose to continue down the path of abandonment, of hopelessness and fear or do we choose to embrace the compassionate, hopeful elements of our national identity? I for one, choose to hope. I believe that the government is here to serve the people and our elected leaders are here to serve you.
Can someone please explain to me how chicken AWOL Dybua is now the hawk War Of Terror president?
How walking away from a failed CEO oil company guilty of insider trading, then steals land to build a baseball stadium?
How 9/11 and his administration culpability enrich the military-industrial-complex while draining the US treasury of much needed finances to support domestic programs?
Many of those who were suckered into a sub-prime loan shouldn't have been eligible in the first place for a home loan.
And if Bu$h wasn't born into a family of privilege, he wouldn't have had the ability to get away with what he has.
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Stanimal (0 articles, 0 quicklinks, 10 diaries, 331 comments)
on Sunday, May 11, 2008 at 1:24:51 AM
...what you believe to be the constitutional basis for the federal government to unilaterally and forcibly change the terms of a contract between consenting parties?
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Joe Reeser (0 articles, 0 quicklinks, 0 diaries, 23 comments)
on Sunday, May 11, 2008 at 6:05:20 PM
The federal government has a compelling interest to enact legislation which is in the interest of the common good. This is my opinion about the role of government. I believe this and it is my opinion. If you think it is okay to have an unregulated business market where there are no rules regarding trade, finance and securities transactions that is your right to have that opinion. I simply believe that having some rules and regulations in place, some limits on the excesses of the more ruthless elements of markets is good for the stability and well being of society.
Chris
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Chris Lugo (36 articles, 0 quicklinks, 2 diaries, 12 comments)
on Monday, May 12, 2008 at 8:29:14 AM
Actually the term used in the US Constitution is "general welfare" but then I knew that would be your answer when I asked the question. Anytime I have ever asked a liber..., I mean, progressive to constitutionally support a particular piece of legislation that is the answer I have received. One could almost believe progressives have failed to read any other part, but I digress. You can also try to explain how the United States currently practices an "unregulated business market where there are no rules regarding trade, finance and securities transactions" if you wish but I don't believe you actually believe a word of that.
You made the statement in your original piece that "poor people are victimized by predatory lenders and...[are] at the root of the mortgage crisis", yet you offer nothing to support such a conclusion. I have little doubt "predatory lending" has played a role. That it is as ubiquitous as some (you?) would have us believe is highly doubtful, in my opinion. I have read many reports on the 'problem.' From what I have read, the majority of the problem is three-fold: 1) Speculation that housing values in certain markets would continue double digit increases indefinitely, 2) Speculation that interest rates would remain at historic lows indefinitely, and 3) Inexperience with and the resultant overvaluation of mortgage-backed securities.
Speculation in housing values and interest rates is what hit mortgage holders the worst. Many took out loans knowing full well that if the worst happened they could not afford the payments. They essentially "bet the house" and lost. ARMs adjusted upward, of course, and they could no longer afford it. I had an ARM until the summer of '05. I'm no financial genius, by any measure, but I could see the rates were going nowhere but up and probably soon. I refinanced into a fixed rate. Any clear-thinking person could see it coming but many didn't want to see it coming because they were making too much money speculating in the housing market. Many people also bought more house than they could reasonable afford with exotic mortgage products. There is certainly room for more stringent regulation here but to "bail out" the banks or the mortgage holders because they made bad loan decisions is simply bad policy.
To answer my question directly: the federal government has no constitutional authority to unilaterally alter legally binding contracts between consenting parties. But then that's rarely stopped enterprising politicians such as yourself, before, now has it?
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Joe Reeser (0 articles, 0 quicklinks, 0 diaries, 23 comments)
on Tuesday, May 13, 2008 at 7:32:46 PM
Your article is spot on. Deregulation, Wall Street's stranglehold on the power of the purse and political surrender to the ideology of British Toryism are, indeed, social curses. Therein lies the trouble with Congressman Frank's legislation, I believe. I do not see how it addresses any of these issues. In fact, I only see how it ultimately serves the interests behind them.
Are you familiar with the "Rebuilding America's Infrastructure" Act (HR 3400)? It is a great piece of legislation because it is crafted precisely in the same fashion as FDR's Reconstruction Finance Corporation, the agency responsible for putting a bottom in the Great Depression and mobilizing our nation's productive capacity to eventually defeat global fascism.
Best wishes in your run for the Senate. Tell your supporters to read The Risk Averse Alert. They'll have more money to contribute to your campaign when they do.
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GoldenT (6 articles, 1 quicklinks, 1 diaries, 51 comments)
on Tuesday, May 13, 2008 at 6:16:38 PM
