Bush Recession Cuts Deep

America has yet to reach rock bottom.  We’re beyond playing games blaming “W” for all our problems.  Yes, this recession belongs to George W. Bush, in spite of the “W” administration’s lame attempts to preemptively blame the Clinton Administration for any and all economic woes to come.

History will judge Bush 43.  We need to look forward and help each other through this mess.

Economic Survival Rule Number One: Ignore all conservatives henceforth.  Their time has come and gone, and they have left this country in shambles.

From our friends at The Nation:

Garry Wills says Americans think of government only as a “necessary evil,” a last resort. Well, folks, all the other resorts are boarded up. In November, America shed more than 500,000 jobs, the worst single-month record in thirty-four years. We lost more than 2 million over the course of 2008–and the crash is accelerating across the globe.

At the same time, America is falling apart, literally. We’ve witnessed the ghastly spectaculars: failure of the levees in New Orleans, collapse of the I-35W bridge in Minneapolis, bursting of the steam pipe that shut down ten square blocks of Manhattan. But these tragic catastrophes are a small part of the growing costs of a conservative-era failure to invest in our future.

Conservative scorn for government has produced a crippling public-investment deficit. America’s core infrastructure–roads, bridges, sewers, airports, trains, mass transit–is overcrowded, outdated and crumbling. The evidence, assembled by Eric Lotke in The Investment Deficit in America, issued by the Campaign for America’s Future, is stark. Poor road conditions cost Americans billions in repairs and countless hours in delay. Though China opens a new subway system every year, and Europeans travel from Paris to Frankfurt on high-speed rail, American railroads don’t have the funds needed even to maintain their outmoded infrastructure. Cities are suffering an epidemic of broken pipes and sinkholes, with the Environmental Protection Agency estimating more than 40,000 discharges of raw sewage into our drinking water, streams and homes each year from collapsing and overwhelmed sewage systems. The Education Department found that one-third of our schools are in such a severe state of disrepair that it “interferes with the delivery of instruction.”

These are only some of our challenges.  500,000 jobs lost.  The worst single-month record in thirty-four years.

What lies ahead?

We must move forward unfettered by the ideologies of the past eight years, and several years before that.  The erstwhile Republican Contract with America died a miserably bloated death, choking on pork and fat.  It was a joke.

Remember the great Republican promise?

Like Lincoln, our first Republican president, we intend to act “with firmness in the right, as God gives us to see the right.” To restore accountability to Congress. To end its cycle of scandal and disgrace. To make us all proud again of the way free people govern themselves.

How did that work out?

We stand together poised on the brink of an economic Depression: abnormal increases in unemployment, restriction and collapse of credit industries, bankruptcies, reduced trade and commerce, the devaluation of the dollar.

We must stand together and resist the urge to panic.  This is not the time to cry foul at any and all forms of government.  Remember, President Ronald “government-is-not-the-solution-to-our-problem-government-is-the-problem” Reagan grew the Federal Government as no liberal would have dared dream.  His 1983 $165 billion bailout of Social Security was a huge paradigm shift for The Gipper, but it was necessary.

Consider this blast from the past from Joshua Green:

It’s conservative lore that Reagan the icon cut taxes, while George H.W. Bush the renegade raised them. As Stockman recalls, “No one was authorized to talk about tax increases on Ronald Reagan’s watch, no matter what kind of tax, no matter how justified it was.” Yet raising taxes is exactly what Reagan did. He did not always instigate those hikes or agree to them willingly–but he signed off on them. One year after his massive tax cut, Reagan agreed to a tax increase to reduce the deficit that restored fully one-third of the previous year’s reduction. (In a bizarre bit of self-deception, Reagan, who never came to terms with this episode of ideological apostasy, persuaded himself that the three-year, $100 billion tax hike–the largest since World War II–was actually “tax reform” that closed loopholes in his earlier cut and therefore didn’t count as raising taxes.)

Why the stroll down memory lane?

As liberals, we need to remind conservatives that staunch ideology breeds mindless idiocy.  As liberals we need remind ourselves as well that staunch ideology breeds mindless idiocy.

The crises of the current moment demand we seek solutions beyond our level of comfort.  We won’t make it through these crises simply because we are Americans. The only way to confront the current crises head on is to embrace the inevitable — everything we have known before is now different.  There are industries in this country we risk losing entirely unless we change our thinking and reinvent ourselves.  We can’t transplant solutions from bygone eras.

Everything now is different.  Talk about your moment of Zen.

Change has come to America.  Change always comes to America.  It’s only when we resist or ignore change that we suffer.  Resist change, and our infrastructure — spiritual, economic or concrete — can indeed collapse.

Obama’s Radio Address – December 13, 2008

Remarks of President-elect Barack Obama
Radio Address on the Economy
Saturday, December 13, 2008

Good morning.

Earlier this week, we learned that the number of Americans filing
their first claim for unemployment insurance rose to a nearly 30-year
high. This news reflects the pain that’s been rippling across our
entire economy. Jobs are being cut. Wages are being slashed. Credit is
tight and people can’t get loans. In cities and towns all across this
country, families enter a holiday season with unease and uncertainty.

To end this economic crisis, we must end the mortgage crisis where
it began. This all started when Americans took out mortgages they
couldn’t afford. Some were reckless, aware of the risks they were
accepting, but many were innocent, tricked by lenders out to make a
quick buck. With banks creating securities they could not value, and
regulators looking the other way, the problem began infecting the whole
economy, leading to the crisis we’re now facing.

One in ten families who owns a home is now in some form of distress,
the most ever recorded. This is deeply troubling. It not only shakes
the foundation of our economy, but the foundation of the American
Dream. There is nothing more fundamental than having a home to call
your own. It’s not just a place to live or raise your children or
return after a hard day’s work — it’s the cornerstone of a family’s
financial security.

To stem the rising tide of foreclosures and strengthen our economy,
I’ve asked my economic team to develop a bold plan that will
dramatically increase the number of families who can stay in their
homes. But this plan will only work with a comprehensive, coordinated
federal effort to make it a reality. We need every part of our
government working together — from the Treasury Department to the
Federal Deposit Insurance Corporation, the agency that protects the
money you’ve put in the bank. And few will be more essential to this
effort than the Department of Housing and Urban Development.

From providing shelter to those displaced by Katrina to giving help
to those facing the loss of a home to revitalizing our cities and
communities, HUD’s role has never been more important. Since its
founding, HUD has been dedicated to tearing down barriers in access to
affordable housing — in an effort to make America more equal and more
just. Too often, these efforts have had mixed results.

That is why we cannot keep doing things the old Washington way. We
cannot keep throwing money at the problem, hoping for a different
result. We need to approach the old challenge of affordable housing
with new energy, new ideas, and a new, efficient style of leadership.
We need to understand that the old ways of looking at our cities just
won’t do. That means promoting cities as the backbone of regional
growth by not only solving the problems in our cities, but seizing the
opportunities in our growing suburbs, exurbs, and metropolitan areas.
No one knows this better than the outstanding public servant I am
announcing today as our next Secretary of Housing and Urban Development
— Shaun Donovan.

As Commissioner of Housing Preservation and Development in New York
City, Shaun has led the effort to create the largest housing plan in
the nation, helping hundreds of thousands of our citizens buy or rent
their homes. Prior to joining Mayor Bloomberg’s administration, Shaun
worked both in business, where he was responsible for affordable
housing investments, and at one of our nation’s top universities, where
he researched and wrote about housing issues. This appointment
represents something of a homecoming for Shaun, who worked at HUD in
the Clinton administration, leading an effort to help make housing
affordable for nearly two million Americans. Trained as an architect,
Shaun understands housing down to how homes are designed, built, and
wired.

With experience that stretches from the public sector to the private
sector to academia, Shaun will bring to this important post fresh
thinking, unencumbered by old ideology and outdated ideas. He
understands that we need to move past the stale arguments that say
low-income Americans shouldn’t even try to own a home or that our
mortgage crisis is due solely to a few greedy lenders. He knows that we
can put the dream of owning a home within reach for more families, so
long as we’re making loans in the right way, and so long as those who
buy a home are prepared for the responsibilities of homeownership.

In the end, expanding access to affordable housing isn’t just about
caring for the least fortunate among us and strengthening our middle
class — it’s about ending our housing mess, climbing out of our
financial crisis, and putting our economy on the path to long-term
growth and prosperity. And that is what Shaun and I will work to do
together when I am President of the United States.

Thank you.

Todd Stroger Wants Your Money

We’ve long realized that spending in Cook County is out of control.  Perhaps I would personally have more confidence in President Stroger if he had made a better entrance on a public elevator instead of insisting on a personal elevator.

We know we’re in recession that’s likely to get worse before it gets better, but Stroger is fooling himself that his a budget that borrows $740 million in bond issues is free of additional taxes.  Bonds need to be paid somehow.  Where’s the new sustained revenue stream in the budget to pay the debt service on these bonds?

Some wise voices on the board agree:

“There’s an economic crisis just short of the Depression, so for us to suggest that nothing’s changed and it’s OK to borrow our way through this problem is foolhardy,” Commissioner Mike Quigley said.

“This is a re-election budget for Todd Stroger,” Commissioner Forrest Claypool said. “It is designed to give him hundreds of millions of dollars of borrowed money to get through the elections and then after the election, [there will be] tax increase No. 2 from Stroger because that money has to be paid back.”

Stroger has other ideas, claiming his budget demonstrates a continued “pathway of reform, efficiency and modernization.”

But Stroger refused to release the proposed budget in its entirety.  That’s a huge mistake from a public relations standpoint, but characteristic of Stroger’s much-less-than-transparent style of governing.

I’d love to see what Commissioner Forrest Claypool saw when he read the first draft of Stroger’s Not-Ready-For-Prime-Time budget. Mark Konkol has the story:

“I’ve never seen a government that put out a budget so chock full of errors, inaccuracy and misinformation. I don’t even think they know their own financial picture,” Commissioner Forrest Claypool said. “It shows remarkable ineptness and is symbolic of general mismanagement of county government that taxpayers pay a heavy price for.”

On Wednesday, Stroger’s staff “demanded” some commissioners return the error-riddled copies while corrected versions are being made.

According to Konkol, the errors in the budget amount to very, very bad math:

The biggest problem with the budget document was in calculating the difference between 2009 budget line items and the 2008 spending plan. The 2009 proposed funding levels were subtracted from what individual departments requested rather than last year’s appropriation.

Cook County residents deserve much, much better.  I hope voters who were so hungry for change will remember the call to the polls when primary season rolls around again.

Cook County desperately needs change.

My money is on Forrest Claypool.  I hope he considers another run.

And Stroger needs to release his draft budget now so we can all have a look.  Maybe we can help him with his math.

No Walgreens for Tinley Park

The news is not good in general for the economy, and even worse for the south Chicagoland area when Walgreens drops plans from building in an economic powerhouse like Tinley Park.

The proposed construction site at 171st Street and 84th Avenue is certainly busy enough to sustain a pharmacy and convenience store.  According to the Sun-Times, however, the proposed 14,000-sqare-foot Walgreens and an adjacent 6,000-square-foot retail center will not be built.

The developer just pulled the plug, leaving LeMonnier and his neighbors stuck with a mess.

Orland Park-based Gemini Cos. announced last week during a village court hearing on several ordinance violations that it had sold the site of the planned Walgreens store, Trustee Tom Staunton said Tuesday night.

Not even the village knows who the new landowner is. Gemini didn’t tell the judge, Staunton said.

Mayor Ed Zabrocki and other village officials are understandably upset at the decision of the developer to abandon the site:

Several trustees and Mayor Ed Zabrocki first heard the news at a Tuesday night village board committee meeting.

“(Gemini has) put the government and residents through this for three years,” an angry Trustee Greg Hannon said.

If Walgreens isn’t built, Tinley Park will level the site and go after Gemini for any money it owes the village, officials said.

“If necessary, we could lien the property for any work the village does,” Zabrocki said.

It sounds like the village board overshot on this one, and Tinley Park residents must be furious with village officials on this one.  According to the Sun-Times, the village demolished seven homes for this failed project, twice rejecting recommendations from its own plan commission:

Two years ago, the village plan commission rejected the development because it thought it would set a dangerous precedent to tear down homes for a business project. Seven homes in Plum Court were demolished to make way for the drugstore chain.

But village trustees overrode the commission, approving the Walgreens and the retail center with several stipulations, including that the strip mall could not house a tavern or frozen-food locker, among other types of stores.

But Gemini did not proceed on the project within the required time period and had to go back before the plan commission, which again rejected the development. Again, the village board rejected the commission’s recommendation and approved the project in June.

Frankly, I hope Walgreens and other developers realize there is more economic potential further south.  I don’t feel sorry for Tinley Park, which is already overbuilt.  Zaborcki and his board got greedy, over-controlling and, frankly, a bit sloppy.  They rejected twice the wisdom of their own plan commission to force a project that was doomed to fail.

Developers and retailers would be wise to look to Park Forest and surrounding areas for future projects.  The area there is ripe with untapped potential, the residents hungry for local businesses.

The sleeping economic giant of the Chicagoland area lies south of I-80.  The business community ignores that at its own peril.

Meet the Press – November 9, 2008

Enjoy Meet the Press, Sunday, November 9, 2008.

Nov. 9: A look ahead at the Obama presidency with Valerie Jarrett, the newly appointed co-chair of the president-elect’s transition team. Plus, former RNC Chair Sen. Mel Martinez (R-FL) & House Majority Whip Rep. James Clyburn (D-SC) and a political roundtable with Doris Kearns Goodwin, Jon Meacham & Mary Mitchell.

Predatory Lenders in Illinois Target Elderly, Minorities, More

The Chicago Sun-Times is running three articles today detailing different instances of predatory lending: here, here, and here.  Some of these loans financed by supposedly reputable lending institutions.

Take Anna Nelson, age 90:

In 1994, she made her first mistake, she admits.

She and her late husband owed just $5,000 on her house in the Roseland neighborhood. But a mortgage broker called and asked her to refinance — and roll in a few thousand dollars of credit.

She was stuck with something unbelievable — an $83,000 loan.

She didn’t know how it happened or how to repay it.

Another broker told her they’d help her get out of it by refinancing.

The loan grew again.

And that’s how it went for the last 15 years. Nelson had people virtually lined up to sell her new mortgages.

She refinanced at least four times, finally left with $125,000 in debt, of which she said she has only seen $5,000.

Dorothy Davis ended up owing $125,000 on a house worth $40,000:

“He came here and told me: ‘Sign the paper, sign it now.’ He kept insisting me to sign it.” Davis said. “Ever since then, I’ve been with no money.”

She didn’t know then that the loan was saddled with fraudulent fees. She barely made her payments.

Another broker came to the rescue, promising lower loan payments — and new aluminum siding.

Undergoing cancer treatment at the time, she was desperate to get out of a bad situation.

But Davis was scammed again.

The new loan took up to 80 percent of her income. “I couldn’t buy any groceries. I could hardly pay even half of my utility bills,” she said. “I prayed and prayed. Some nights, I couldn’t sleep.”

Before she knew it, she owed $135,000 on a home worth $40,000 that was paid off 20 years earlier.

What possible value would a foreclosure be to a lending institution in a situation like this?  According to the Sun-Times, the issue of minority targeting has brought hundreds of lawsuits and the FBI has taken notice.

Perhaps even more tragic is the case of Rosa Dailey, 66, who now owes $154,000 on a loan she took out to repair her garage.  “A broker on behalf of Argent Mortgage noticed her garage needed fixing and started calling her incessantly,” the story says.  She explained that she couldn’t sign the loan without her sister, who was terminally ill.

Here’s where the broker went for the kill:

“No problem,” she said the broker told her.

He drove Dailey to the hospital with the papers.

“No sooner than did she sign it, she was dead,” Dailey said.

Now Dailey owes nearly $154,000 from a loan she claims was saddled in duplicate fees and a falsified income. The mortgage payments left her with little extra money. So she couldn’t fix her furnace after it went out last winter, and she huddled near a space heater in her bedroom, she said.

Can there be any doubt that deregulation has failed miserably?  The unadulterated greed of the lending institutions is ruining people’s lives.

Underemployment in Illinois Tops National Average

According to our friends at Progress Illinois, a surge in underemployment in Illinois has kept the the Prairie State higher than the national average for seven of the last eight calendar years.

Underemployment figures in Illinois for the year 2007 were at 8.6%, while the national average was 8.1%, according to figures released by the Economic Policy Institute.

According to the EIP:

At 11%, the underemployment rate in September was at its highest in more than 14 years. The underemployed currently includes about 9.5 million unemployed workers, 6.1 million involuntarily part-time workers, and 1.6 million workers only marginally attached to the workforce.1 The fact that one out of every nine U.S. workers is now either unemployed or underemployed is clear evidence of the need for a second stimulus package targeted at job creation.

Illinois was only better than the national average in 2006, when the nation saw an 8.2% underemployment rate and Illinois sat at 8.1%.

Now, indeed, might be a good time for a second stimulus package.

Debate 3: It’s the Economy Stupid

The third and last presidential debate is underway, and Topic A is the economy.

Right now Barack Obama is talking, and John McCain looks like he’s in pain, staring at Senator Obama.

John McCain is talking about “Joe the Plumber” in Ohio.

I’m sure we’ll hear from Joe the Plumber tomorrow from the major media.  Obama’s back to policy, talking about his tax cuts.  McCain is staring off in to the distance, now returning back to Joe the Plumber.

Obama stresses again that he’s going to cut taxes for 95% of all Americans.

McCain is hammering taxes, but no plan yet.

Ah, here it is.  McCain wants to cut taxes even more.

How will McCain pay for his new programs?