For the last five years my next door neighbor has been a very nice early middle-aged Black woman. She bought the three bedroom 50-year-old house next door after the previous owner died. She has been very good about keeping it nice and has grown really a really nice set of flowers and hedges out front. So it surprised me when suddenly there was a "For Sale by Owner" sign out front and then she got a bunch of people over and moved all her stuff out.
The "Owner" who put the signs up, it seems, was the investor who bought her home in foreclosure. I later learned that my neighbor had bought the house for about $60,000 (prices are low in Texas - that is a 1300 square foot house with front and back fenced yard.) Some rip-off artist put her in an adjustable rate mortgage. She had been paying $650 a month, and last Summer the rate reset. The new monthly payment was about $1050 a month.
She couldn't pay it, and the out-of-state mortgage holder simply would not work with her. That was silly because they had $58,000 in the mortgage and the house sold for $38,000. By not working with her, they walked away from a third of the value of the mortgage when Dallas-Fort Worth has been the second most stable metropolitan area in the U.S. after Charlotte, North Carolina.
Now the investor is getting worried. They buy foreclosed homes and flip them quick for a fast profit. Only they have had several very good potential buyers, and none of them can get a home loan.
Now I have an empty home next door, and my property resale value has dropped because of the value of the foreclosure next door. I'm still about 50% above what I paid in 1999, though - assuming that I could find a buyer. But there are two other homes in this same short block with For Sale signs and no occupants. I'm probably trapped here until the economy improves nationally.
The rogues gallery of my enemies includes George Bush, Alan Greenspan and his fellow Libertarian, Phil Gramm, and I have begun to understand why the Depression was simply another very predictable result of unregulated banking running the economy. Boom and bust; boom and bust; each time a bigger boom, each time a bigger bust. Economic stability is the direct result of effective bank regulation; Boom-and-bust is the direct result of unregulated banks.
With economic stability you get a thriving middle class, but the get-very-rick-quick boys are frustrated. Since Reagan was elected we have seen a rapid growth in the number of American billionaires together with a reduction is the percentage size of the middle class as big business and the banks shift the risk of loss to individuals and keep the profits to themselves.
Industrial nations build a stable economy and a strong hard-working middle class. America has been shifting towards the Latin American model of a small, very wealthy elite, an anemic middle class and a large number of very poor people. Why not? That's the Republican wet-dream. A few very wealthy people who own most of the country, a desperate and ununionized powerless work force, and a few favored proles who are allowed to pretend they are being paid what they are worth as long as they suck up to the wealthy owners and the bankers.
McCain is running on the Reagan Revolution and the Bush war. If he wins America is in deep shit.
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