Wednesday, January 26, 2011

We Face a Deep Crisis but the Word "Foreclosure" Didn't Appear in Obama's State of the Union Address

The word "foreclosure" -- and other words related to the housing crisis -- appeared neither in the president's speech, nor in the responses offered up by the GOP and the Very Silly Party (which you can read here).

Of course, pundits griping about how little attention was paid to their favorite issues during the annual SOTU pageant has long been a dull sport. This isn't like that. I'm not complaining about the president saying the wrong things about some domestic policy or ignoring the plight of the people of Tajikistan or wherever.

No, I'm talking about ignoring one of the most painful economic issues facing the country during the worst downturn we've suffered in 70 years. And the context here is that this was billed as a speech that would focus heavily on the economy, articulating a coherent narrative for getting out of the sinkhole.

For his part, Paul Ryan, R-Wisconsin, the GOP's boy-wonder wonk, was supposed to be giving a "serious" response to that proposal.

And the thing about this crisis is that the worst is yet to come. Because of a lull in foreclosures forced on the banks by the revelation of their fraudulent robo-signings, 250,000 of them that should have been completed last year were effectively shifted to 2011, which is now projected to be a record year for American families losing their homes. That's right, this year's going to be even grimmer than 2009, the current record-holder.

After a period of recovery last year, home values are declining again -- they have for 4 straight months -- in a "double-dip" in the market. That means that more homes are heading under water. And now we're seeing banks walk away from those properties because it's not worth it for them to sell, which is just adding more stress to already vulnerable communities.

All of this is threatening to drag the whole economy down into a double-dip recession. That none of our leaders, spanning the ideological spectrum, felt it worthy of comment, but did think it necessary to prattle on about deficits and earmarks and national greatness, is really telling. It certainly speaks to why more people identify themselves as independents these days than as fans of either of the major parties.

I guess I can understand why all three of them avoided it. Obama was trying to paint a picture of relentless optimism, and his HAMP program -- which was supposed to keep people in their homes -- has been a miserable failure. Paul Ryan has a plan to drive up the deficit by cutting taxes for the wealthy by more than he'd save privatizing Medicare and slashing Social Security. But it doesn't address the foreclosure crisis -- the GOP has no ideas about that. And Michele Bachmann was too busy explaining how the Founding Fathers killed Hitler and put a man on the moon.

But it's a tragedy nonetheless. We have long been sold on the idea that owning a home is an integral part of the American Dream. We've been told we live in an "ownership society." And yet at a time when a record 2.9 million American homes are in foreclosure, our leaders aren't even talking about it.

PS: On a lighter note, Roy Edroso's take on the evening is a snarky must-read. For very good, and decidedly less fluffy analysis, check out the Institute for Policy Study's blog (for which they should come up with a catchy name already), where IPS' experts weighed in on various aspects of the SOTU.

1 comment:

Randall L said...

When you see what is going on with the banking system it says little for human values or really any kind of compassion for the human race. I'm in agreement with your suggestions if nothing more than from a personal point of view. I would like to think the problems are just with megabanks but with the consolidations and buyouts a number of smaller banks have now taken the job of emulating the failures of big banks. The system is in such dissarray that those coming close to foreclosure must game the system to have any chance of surviving. The biggest disappointment during Obama's presidency thus far is his failure to even show passion for people in foreclosure or many of the struggles of the middle class which he made so evident during his campaign. There must be a something about the Whitehouse that makes presidents see everything behind rose colored glasses. To be taken advantage of, without a job and without protection of your elected representatives leaves many Americans anxious and wanting.