Tag Archives: bankruptcies

I Just Want My American Dream Back – A conversation from 1981 to 2011 (revised)

Factory worker (1981): Ever since the Walmart moved into town, management has been pressuring labor to take pay cuts. Half the work force has been laid off. Thank goodness for low cost goods from Walmart to make up for my lower wages but I still need more money to make ends meet.

Savings and loans banker (1985): Hey, home values have been rising and new laws allow us to lend out up to 100 percent of the value of your home. Sounds risky? I know it does but not to you. If we have troubles, the FSLIC will protect your deposits now up to $100,000 so you might as well get started on your American dream.

Stock broker (1995): I hear the bankers that absorbed the savings and loans from the crash of its bubble are offering not only no money down loans, but now you don’t even have to prove your income and they have some pretty decent rates on home refinancing. With this new internet sensation, the stock market is on fire. Why don’t you just refinance your home and use part to make up for lost wages, but put some into this raging market and you will get ahead.

Factory worker (1999): But the market is up 300 percent when corporate earnings are only up 40 percent. I understand that you think the new fangled dot.com start-ups are going to sky rocket, but why are traditional brick and mortar businesses selling at such high price to earnings ratios?

Real Estate Broker (2001): So the Stock broker talked you into taking a home equity loan to get into the stock market? I am sorry you lost so much of your life’s savings. But perhaps you can make it back in the housing boom. I can show you houses that may seem beyond your reach but they are investment gold mines, trust me. Their prices are going up at 20% a year. In the mean time, just grab a few of the credit card offers being mailed to you each week to get by while you are recovering your retirement savings in your new home investment.

Factory worker (2003): Seems logical but housing prices no longer make sense. It used to be with a 20 percent down payment, rental rates would cover the remaining principle, interest, taxes and insurance but they no longer cover the loan amounts. My income hasn’t gone up and will not cover such a high mortgage.

Mortgage broker (2005): It’s a new economy. We no longer require rents to cover mortgages because equity is rising at 20% per year. And you can qualify for whatever size home you want. I will tell you what income you must claim to me and I can get you an introductory low rate on a no income verification loan. In fact, unlike the ’90s, you can get pretty low interest rates for the first 2 to 5 years of the loan, and I can even qualify you with credit scores as low as 600. You don’t even have to show that you have cash reserves. Criminy, you don’t even have to be self employed anymore. This surely can help you reach up to participate big in this boom, and you truly need to participate big with all you’ve been through. In the meantime, use your multiple, no income verification credit cards to get by until you flip your house investment in a couple years for a profit.

Real estate broker (2006): Oooooh, umm, yeah, after a couple years you want to sell now. After you bought, the market slowed a bit and I really can’t sell your home for more than you paid for it. In fact, there are three brand new homes on the street that have never been lived in and they are on the market for 10 percent less than you paid. If you want to discount your home 15%, perhaps we can entice buyers to buy yours instead of the new homes that have been on the market for more than six months.

Factory worker (2007): I can’t afford to take a 15 percent hit on my home so I will have to keep it on the market awhile and max out my credit cards to make ends meet in the mean time.

Banker (2008): I am sorry to inform you but when you maxed out your credit cards, they triggered the universal clause and your interest rates are now going to be raised from their original 10 percent up to 32 percent.

Factory worker (2008.5): Now what can I do. I cannot sell my home, I have maxed out my home equity line, and my credit cards. I have no more credit because as I pay off my cards, the banks cancel them. My introductory home loan interest rate has expired and my home loan has risen 50%. The local government, hurting for more taxes, is considering raising the mil rate. I am going to have to delay some consumer purchases and not make others. And because I have to survive, I may have to miss a few credit card or home mortgage payments.

Banker (2009): When you missed payments on your credit card, we did lower your credit rating to protect other creditors from your misfortune, and we did demand immediate repayment of your balance on your credit cards. I know it exacerbated your inability to pay us back on your home loan. But a result, I am afraid we will have to initiate foreclosure.

Factory worker (2009.5): I keep lowering my price trying to sell this house but it has now been on the market for over a year. To make matters much worse, my employer just told me that because most other Americans have lost credit, home values, or jobs, they have been unable to buy our company’s products. As a result, I was told that I am being laid off to join 20 million others. And in my hour of misfortune, my real estate broker has informed me that my house value is now worth 40 % less than I paid for it.

Foreclosure lawyer (2010): Let me understand this better, so the banker said he would work with you to comply with government assistance programs, but after asking you four times to send in your paperwork to determine if you qualified, he “misplaced” it each time until the bank finally filed bankruptcy proceedings. I have filed in court on your behalf to delay the inevitable, but because your state is a recourse state, the bank will ultimately take your house, sell it at a fire sale price, and afterward the banker will come after you for the difference, forcing you to file for bankruptcy and to lose your life’s savings.

Bankruptcy lawyer (2010.5): Unfortunately the bank took your house and your credit cards and the court took your newer car, your savings, and your “excess” belongings. I understand that Chinese factories are building the widgets you used to make, you haven’t been able to find a job for over two years and have been turned down in countless interviews. Your savings are gone, your credit is ruined, and your self esteem is crushed. Congress has left you without unemployment compensation, yet is about to pass trade agreements that will leave even more Americans unemployed. Congress will not cut expenses so unfortunately their failure to do their job means even more Americans will lose theirs and America’s interest rates will go up costing Americans even more in higher interest payments that will be passed through to consumers in higher prices. But on the brighter side, I was able to ensure that even though you have nothing, your debts have been discharged.

Occupy Wall Streeter (2011): I know police officers are bloodying us with batons and spraying us with pepper spray, that they are waking us in the middle of the night to take our generators and our tents, that they are throwing tear gas in the middle of our peaceful demonstrations, and arresting us for acting on our right to assemble, but we are voicing our urgent need for change in Zucotti Park. Before you lose all hope, join us.

Employed Middle American (2011): Is this park thing the right thing for the factory worker to do? I dunno. My unemployed college graduate son is down at the park and I am watching every brutal act of policeman on my baby. I am holding Wall Street and Congress responsible for this senseless brutality and I will remember at the polls. But I didn’t demonstrate during Vietnam Nam. Instead, I went to war. And the factory worker is no hippie.

Our leaders tell me that they are doing what they can for America, but they can’t pass a budget even when the world tells them our credit rating will suffer. They can however pass a law that makes pizza a vegetable when big business wants a greasy snack to be called healthy, but they can’t compromise to help America back to work!

Factory worker (2011): I have decided to go down to the park. Be patient with me. I know there are instigators down there but I want a better America and need to do something more. I don’t have the answers to what the banks and Congress should do to fix what they have done but I am going to ask questions. Support my right to assemble with others to debate the potential answers in a democratic way.

If America’s unemployment rate rose to 15 percent, would you lose your job? Some economists are warning of 50 percent unemployment if drastic changes aren’t made. I don’t know whose predictions are right, but please wish me well in doing my part to reverse our fate now. I just want my American dream back.

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Filed under American Governance, American Media, American Politics, Economic Crisis, Jobs, Occupy Wall Street

Hey Third Party, Rise Up and Meet the Challenge!

Is this the political message Bob the electrician hears?

Republican Plan for America:
• Get rid of Obama
• Make a “simpler” tax code that lowers taxes for the Rich and increases taxes on the poor
• Let the housing debacle take its course, foreclose on millions of Americans and put millions more through bankruptcies to stabilize the banks
• Make a million jobs through drilling
• Reduce business costs by eliminating regulations and unions
• Cut government spending and start America on austerity
• Pass trade bills that loses millions more jobs

Democrat Plan for America:
• Tax the rich
• Tax the middle class
• Spend billions more stimulus to keep union jobs intact
• Keep government big and federal budgets big
• Propose jobs plan that won’t pass Congress, and that will create far fewer jobs than needed.
• Offer housing solutions that won’t stop foreclosures and bankruptcy
• Start a trade war with China that could cost millions of jobs

Bob now must decide which of these two political bags of trash needs to be put to the curb. With such a rotting smell coming from both camps, it will be hard for poor Bob to choose. Can’t he throw out both in favor of another? Will an independent rise up to either force at least one party to turn populist, or to take the White House on behalf of the Great Middle America? 2012 would be easier for a third party candidate to win outright than any post WWII.

Both parties seem intent on not angering the election gods who fund their re-elections, those one percent of Americans whose capital is at risk from any real solution to turn around America. The Republicans are casting their nets toward the one percent by bold, almost irreversible statements like those made by Challenger Mitt Romney who said, “Don’t try and stop the foreclosure process. Let it run its course and hit the bottom.” In so doing, the Republicans aren’t even hiding their intent from the 99 percent, almost blatantly admitting to the rest of America that elections are won by those that favor the gods.

The Democrats, however, recognize they need the one percent just as much as the Republicans. They know that programs that could turn around America could also put the wealth of the one percent more at risk. Therefore, President Obama’s plan seems to merely demagogue against the Republicans while offering meager fringe plans that sound like the right direction but that go only as far as the one percent will allow. Both parties have set their course for 2012 and it is a rough one for the 99 percent.

Tell me Bob the Electrician, which one of these plans is going to help you stay in your house, fix your credit, get a decent paying job, put your kids in college, and help you prepare for retirement? If you guessed neither, you are more right than wrong, so trust your instinct. If you are leaning toward, President Obama, you will probably be in the winning majority because a vote for words that sound like they are at least in the right direction will beat blatant, irreversible words that shout to the one percent “I am your Republican Guard” any day of the week.

Yet, America should not have to choose between meekness and arrogance. We can turn around our country without an all out class war. Housing debt can be fixed with an equity for debt swap that keeps banks intact, that doesn’t trigger credit default swaps, and that keeps America’s families in their homes. Business and consumer credit ratings can be salvaged with credit amnesty. All able Americans can be placed in jobs through a job voucher plan that immediately sets America back on course. We can begin to dig our way out through increased competitiveness, government can be right sized, and America’s business environment can be made more attractive. Hey, Republicans and Democrats, any takers? How about you Mr. Trump or Mr. Bloomberg?

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Filed under American Politics, Job Voucher Plan, Jobs