From Tom

November 29, 2011
Tomgram: Steve Fraser, "De-Fault Is Ours"

Change a single letter in what is and, lo and behold, you get what if.

Here’s just a taste of what is:

Foreclosures on houses with delinquent mortgages have doubled since 2010, with housing prices expected to drop another 10% before stabilizing.  Meanwhile, the executives of government-backed mortgage giants Fannie Mae and Freddie Mac, institutions bailed out by taxpayers to the tune of $169 billion, are offering next to no significant relief to mortgage-holders in trouble.  For such “work,” the top six executives of the two outfits raked in “$35 million in compensation, including millions in bonuses.”

One in every three Americans is now considered either poor or “near poor,” according to recent census data; that is, 49.1 million Americans are below the poverty line and another 51 million perilously close to it.  This, of course, represents a significant increase in downward mobility.  According to the New York Times, “over half of the near poor in the new tally actually fell into that group from higher income levels as their resources were sapped by medical expenses, taxes, work-related costs and other unavoidable outlays.”

On the upward mobility front, the news has been anything but upbeat.  Recent evidence indicates that, if upward mobility happens to be your urge, you better move to Canada -- or to “aristocratic” Europe, where they still have it (though for how long, given the Euro crisis, is anyone’s guess).  One thing is clear: given what’s happening to American education, the next generation’s fate is likely to range from immobility to downward mobility.  The average graduate who takes out loans to pay for college now emerges from his or her subprime education with a debt burden of more than $25,000 dollars, a figure growing by the year.  Meanwhile, at state colleges, once the portals to an upward-mobile future, students are paying ever more for ever less educationally as tuitions rise and state support shrinks.

As for wealth in this country, from 2005 to 2009, median wealth among Hispanics fell 66% to $6,235, among African-Americans, 53% to $5,677, and among whites, 16%, to $113,149.  These figures represent the largest wealth disparities in the quarter century the Census Bureau has been collecting data on the subject.  As for income, between 1979 and 2007, according to a recent report from the Congressional Budget Office, the after-tax earnings of the top 1% of Americans grew by 275%, while those of the bottom 20% rose by only 18%.  Meanwhile, American corporations are sitting on “record amounts of cash,” even as job-creation has been next to nil, capital investment in new plants and infrastructure stagnates, and companies are happy to invest their multibillions instead in stock-buyback deals.

Here’s the financial overview: the top 1% of Americans now take in more than 25% of the nation’s income and control at least 40% of its wealth.  (A quarter of a century ago, the figures were 12% and 33%.)  To make it into that top 1%, according to economist Emmanuel Saez, your family needs to make a minimum of $368,238 a year (based on 2008 income figures); for the 15,000 families that make up the top .01%, average annual income is $27,342,212.

In other words, if you aren’t in the top 1% right now, it’s all what is, and never what if -- no dreams allowed.

When it comes to what is, the news is terrible.  When it comes to what if, who knows?  TomDispatch regular Steve Fraser, our preeminent historian of Wall Street and author of Wall Street: America’s Dream Palace and Every Man a Speculator: A History of Wall Street in American Life, offers his own ideas about how, here in the U.S. of A., what is might be challenged and turned back into what if? Tom

Comments

[warren]

DeFault is in the Hypocrisy ....

http://foro.univision.com/t5/Barack-Obama/Lifestyles-of-the-Rich-and-Liberal-Democrats/td-p/405378884

... or Do not expect any Help from the Rich Socialists, er "Socialites"? The Thing that is more Valuable to Them than Their Wealth, and after which They seek, is Raw POWER.

http://www.youtube.com/watch?v=Rp6-wG5LLqE

.... Do not be Fooled in the First Place.

[warren]

Some more on Fannie and Freddie,

http://www.redstate.com/moe_lane/2010/09/08/democratic-hypocrisy-on-fannie-maefreddie-mac/

[Wing Nut]

Rocky,

I completely disagree that many of the top earners in the country inherited their wealth. Many of them worked hard to achieve their wealth. In fact, I would argue that most of them did so. Case in point; Lynn Tilton. Imagine if that particular 1 percenter didn't help save Fraser Paper mill.

Your point of view is as twisted as our Presidents. Do you know how to think for yourself?

Take care,
WN

[Rocky]

WN, it's truly unfortunate that your comments always have to turn personal, it's not that I can't take it, it's just that I believe that we have some serious issues facing our country and all of us. If you think my thinking is twisted you can imagine what I think about yours! At least I know what's in my best interest, I'm not sure you do. Back to my point, we should be talking about the issues, the fact that 1% is setting the agenda for 99% of us. Is that ok? Is that what the American dream is all about? Is the fact that we now have a corporate democracy and not a government of/by/for the people acceptable? Whether or not we think each others thinking is twisted is quite subjective and material for a useless argument and a waste of time.

[warren]

Right Rocky, I do not see where WN got the "Inherited their Wealth" bit from. I believe if we must oppose a 1%, then it should be the Rats who want to Destroy Our Constitutional Republic. Many of whom Occupy the 535 seats on Capital Hill.

[Antonio Andolini]

Freddie and Fannie needed a bailout, why?
http://www.youtube.com/watch?v=w-YtqVIKTTE&feature=related
Bye, Bye, Barney, bye bye!

[toonist]

"Freddie and Fannie needed a bailout, why?" Ask your Repubilcan frontrunner Newt.

[Antonio Andolini]

Doom and gloom, doom and gloom, a bunch of disappointing statistics and a pitch to buy some books. Is that all there is? Reminds me of those who sit around and ask, "Why did the mill close?" Learning from history is productive; wallowing in it is not. "What if" can be useful;"what will" needs to be the focus.

[toonist]

Nice post warren! Somehow my first reply to it never made it here. Bravo!

[warren]

No toonist, A.A. nailed it! Ask Barney Frank about Home Ownership for those who could not pass a Credit Check! Barney should have been thrown out in '86/87 after the Steve Gobie fiasco ... wait a sec, What Barney helped to do to Our Economy DOES bear a LOT of resemblance to that sordid story ... LOL!

[toonist]

Hmmm I thought for sure Gingrich was a lobbyist for them and making big bucks off them???

[warren]

I'm no fan of Newt, I think He is a part of the Problem. He may have had a small..er.. "part" in the Democrat's Home Loans to the Unqualified Fiasco. But as A.A. has pointed out, Barney was "Star of the Show" in his typically flamboyant fashion!

[warren]

John McShame was a member of the Keating Five S & L mess, the ONLY republican... can You find anything on Newt, toonist?

[Antonio Andolini]

At the (rotten) core is the Community Reinvestment Act. A prime example of government gone awry, meddling in the private sector. Well intentioned, poorly executed. But, hey, those wonderful folks at the Fed are on it. Don't worry, be happy.
http://www.federalreserve.gov/communitydev/cra_about.htm
Granted, the recent amendments could put more funds into Neighborhod Stabilization Programs, a huge help for Berlin.

[Antonio Andolini]

It's no secret that Newt worked as a lobbyist for a firm whose clients included Freddie and Fannie.

[Antonio Andolini]

Ron Paul looks wiser all the time.
http://www.lewrockwell.com/paul/paul504.html

[warren]

"Granted, the recent amendments could put more funds into Neighborhod Stabilization Programs, a huge help for Berlin."

Interesting how We are all FOR Govt. Pork when there is something "in it" for us.

- I hear Kommandant Schultz has compleated the Hireing Process...

[warren]

We Agree on Ron Paul, AA. I met Him back in 2001, here in New Hampshire ( and again here in Berlin ). And was for Ending the Fed., AND for Getting U.S. Out of the U.N. even earlier.

[Antonio Andolini]

Actually, just Freddie.
http://www.foxnews.com/on-air/on-the-record/2011/11/18/gingrich-i-never-lobbied-fannie-mae-freddie-mac-while-holding-public-office

[Antonio Andolini]

There you go again, Warren, cherry-picking quotes and trying to put words in people's mouths.
"Still, a man hears what he wants to hear
And disregards the rest." Paul Simon.

[warren]

They're your words A.A.

This makes better reading than Any Tomgram...

http://www.ronpaul.com/category/texas-straight-talk/

[toonist]

Ron Paul is going nowhere....He's like the crazy uncle everybody has. I like him but he's going nowhere.

[toonist]

http://dailycaller.com/2011/11/16/gingrich-reportedly-paid-between-1-6-and-1-8-million-by-freddie-mac/

[Antonio Andolini]

Having fun, Rocky?

[warren]

Going nowhere fast...

http://www.thenewamerican.com/usnews/politics/9906-poll-shows-ron-paul-in-firm-lead-in-iowa

http://rt.com/usa/news/latest-poll-ron-paul-425/

toonist, Barney and Newt were just working the dog from differant ends... Barney and the Dems created the Housing Loan Fiasco, and Newt helped bail afterwards. Now doesn't Ron Paul look even better?