Thursday, October 08, 2009
Sadly, people like Fatooh and her family are being victimized by the global recession in precisely the ways anticipated here and elsewhere in 2007:
It's a testament to something sad and strange that we're no longer shocked by the stories of people like Kassy Fatooh.
Not long ago Fatooh was living an ordinary middle-class life. A mother of two, the San Anselmo native was working as a grant writer and copyeditor. Her husband worked at a hotel. The monthly mortgage payments on their Cazadero home were decidedly reasonable, less than many in those parts pay for rent.
What happened next was at once an unlikely constellation of bad luck, and an all-too-common illustration of how the threads of a stable existence can so easily unravel these days. Fatooh's husband lost his job. The two divorced. She and the kids came down with mono. The bills piled up as the illness worsened -- she and her teenage son were diagnosed with Chronic Fatigue Syndrome, triggered by the mono. Finally they joined the ranks of millions: The bank took their house.
As with so many other Americans lately, misfortune cascaded for Fatooh and her family. Too ill to work, she can now no longer afford rent; an old friend eventually let her and the kids move temporarily into a house in Inverness that had belonged to his mother. To leave the house just for groceries can deplete her for days. Her son, formerly a kayaker and generally active young man, is bedridden. Fatooh's car has been repossessed.
. . . but what about the people who are losing their homes? What is going to happen to them? The answer, as we all know, is that it is going to be brutal. Many of them are going to be pushed into the rental market for the rest of their lives, and many are going to have to leave the locations where they currently reside because even the cost of rent is going to be too much for them. So, we are looking at the prospect of two migrations, one from houses to rentals, and the other from expensive parts of the country to less expensive ones. Furthermore, quite a number of communities built for home owners will rapidly become rental ones. Some may even resemble ghost towns, as it becomes impossible to fill all of the homes with residents.
Left academics would say that the socioeconomic life of the US will subtlely display more and more features of sub proletarization, as more and more people in the lower middle class and even the middle class find themselves forced to migrate internally within the country (an economically generated group of internally displaced people?) and live under conditions of financial insecurity.
Shockingly, very little has been done to prevent the catastrophe that is befalling people like Fatooh. Direct billions of the financial bailout approved by Congress in October 2008 to prevent millions of Americans from losing their homes? Stabilize the communities in which they live by enabling them to stay in their homes and supporting their local economies so that others, like Fatooh's ex-husband, can stay employed? Forget about it, said Jason Furman, an economic advisor to Obama, after John McCain amazingly proposed it during a debate. After all, as he said with a straight face: The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud. McCain's brief moment of compassionate sanity was thereafter quickly forgotten.
Condition the receipt of bailout funds by financial institutions upon a resumption of lending? Never seriously considered, because, apparently, it was understood from the inception that the purpose of the bailout was to improve the quality of balance sheets of insolvent banks, not facilitate continued access to credit. Permit homeowners to force banks to renegotiate their mortgages in bankruptcy court based upon the current appraised value of their property. No, can't permit that, either. So, the process of driving as many as 7 million Americans out of their homes grinds on. As James Cramer predicted in relation to the predicament of these homeowners back in August of 2007: No one is going to protect the public from rapacious capitalism.
For people like the Fatooh family, the election of a new President and a new Congress is something far removed from the pressures of their difficult daily lives. The collapse of the housing bubble, the ensuing global recession and the remorseless government response is a financial Katrina, with its numerous victims scattered and isolated all around the country. Facing criticism that they don't recognize the severity of the related unemployment crisis, Obama administration officials strain mightily and come up with . . . yes, you guessed it, a proposal for yet another corporate tax credit.
Meanwhile, expect tens of billions to cover losses within the Federal Housing Administration. In the 19th Century, corporations craved the privileges that went with being considered a person under Anglo-American jurisprudence. Now, it looks like we should be seriously considering the opposite, a movement centered around giving people the privileges of corporations. Or, perhaps, we should think even more radically and abandon the concepts of private property and corporate control that turn people like the Fatooh family into collateral damage.