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Donald Trump's bankruptcies should be studied in depth by all who think there's something wrong with having nations (or individuals?) survive bad choices. Trust me. You want to do what Trump did, not the other (what Greece and the rest of the world are being encouraged to do).
During the foreclosure crisis, banks and their allies savaged homeowners who “walked away” from mortgage debt. They equated defaulting on payments with failing the duties of citizenship. They warned of “strategic defaults” by conniving homeowners who would deliberately stiff lenders to get a loan modification.
In reality, the highest-profile strategic default of the foreclosure crisis came from the leaders of the Mortgage Bankers Association, a trade group for the lending industry, who walked away from their 10-story headquarters in Washington. Just a few months earlier, their spokesperson argued that borrowers had to keep paying. “What about the message they will send to their family and their kids and their friends” if they defaulted, the spokesman asked. Indeed.
The Tea Party, the very movement whose energy Trump has tapped into so successfully, was founded on the principle of not having to “subsidize the loser’s mortgages.”
Businesspeople defaulting on each other never raised this kind of ire: only if ordinary people wanted to allocate losses in the greatest crisis since the Depression onto the banks who caused it did the rage emerge.
When Congress made an effort to change the bankruptcy laws, these same banks howled in protest. Members of the Obama administration, despite expressing support for the idea of allowing judges to modify primary mortgages during the 2008 campaign, decided to sit on their hands and let senators drowning in bank cash kill the idea, leading Sen. Dick Durbin to pronounce about Congress that the banks “frankly own the place.”*
And they so do.
Long after we the people should have corrected this.
_ _ _ _ _ _ _
Picking up on a comment on this next essay, I see a further crassness in the actions of those who seem to have been deemed the beacons for leading us down the path of iniquity. The David Brookses and George Wills speak in smooth cadences as we are numbed to reality and traipse off blithely to our final servitude.
In America, Only the Rich Can Afford to Write About Poverty
08 August 15
There’s something wrong with the fact that a relatively affluent person can afford to write about minimum wage jobs while people experiencing them can’t
ack in the fat years – two or three decades ago, when the “mainstream” media were booming – I was able to earn a living as a freelance writer. My income was meager and I had to hustle to get it, turning out about four articles – essays, reported pieces, reviews – a month at $1 or $2 a word. What I wanted to write about, in part for obvious personal reasons, was poverty and inequality, but I’d do just about anything – like, I cringe to say, “The Heartbreak Diet” for a major fashion magazine – to pay the rent.
It wasn’t easy to interest glossy magazines in poverty in the 1980s and 90s. I once spent two hours over an expensive lunch – paid for, of course, by a major publication – trying to pitch to a clearly indifferent editor who finally conceded, over decaf espresso and crème brulee, “OK, do your thing on poverty. But can you make it upscale?” Then there was the editor of a nationwide, and quite liberal, magazine who responded to my pitch for a story involving blue-collar men by asking, “Hmm, but can they talk?”
I finally got lucky at Harper’s, where fabled editor Lewis Lapham gave me an assignment that turned into a book, which in turn became a bestseller, Nickel and Dimed: On (Not) Getting By in America. Thanks to the royalties and subsequent speaking fees, at last I could begin to undertake projects without concern for the pay, just because they seemed important or to me. This was the writing life I had always dreamed of – adventurous, obsessively fascinating and sufficiently remunerative that I could help support less affluent members of my family.
Meanwhile, though I didn’t see it at first, the world of journalism as I had known it was beginning to crumble around me. Squeezed to generate more profits for new media conglomerates, newsrooms laid off reporters, who often went on to swell the crowds of hungry freelancers. Once-generous magazines shrank or slashed their freelance budgets; certainly there were no more free lunches.
True, the internet filled with a multiplicity of new outlets to write for, but paying writers or other “content providers” turned out not to be part of their business plan. I saw my own fees at one major news outlet drop to one third of their value between 2004 and 2009. I heard from younger journalists who were scrambling for adjunct jobs or doing piecework in “corporate communications.” But I determined to carry on writing about poverty and inequality even if I had to finance my efforts entirely on my own. And I felt noble for doing so.
Then, as the kids say today, I “checked my privilege.” I realized that there was something wrong with an arrangement whereby a relatively affluent person such as I had become could afford to write about minimum wage jobs, squirrels as an urban food source or the penalties for sleeping in parks, while the people who were actually experiencing these sorts of things, or were in danger of experiencing them, could not.
In the last few years, I’ve gotten to know a number of people who are at least as qualified writers as I am, especially when it comes to the subject of poverty, but who’ve been held back by their own poverty. There’s Darryl Wellington, for example, a local columnist (and poet) in Santa Fe who has, at times, had to supplement his tiny income by selling his plasma – a fallback that can have serious health consequences. Or Joe Williams, who, after losing an editorial job, was reduced to writing for $50 a piece for online political sites while mowing lawns and working in a sporting goods store for $10 an hour to pay for a room in a friend’s house. Linda Tirado was blogging about her job as a cook at Ihop when she managed to snag a contract for a powerful book entitled Hand to Mouth (for which I wrote the preface). Now she is working on a “multi-media mentoring project” to help other working-class journalists get published.
There are many thousands of people like these – gifted journalists who want to address serious social issues but cannot afford to do so in a media environment that thrives by refusing to pay, or anywhere near adequately pay, its “content providers.” Some were born into poverty and have stories to tell about coping with low-wage jobs, evictions or life as a foster child. Others inhabit the once-proud urban “creative class,” which now finds itself priced out of its traditional neighborhoods, like Park Slope or LA’s Echo Park, scrambling for health insurance and childcare, sleeping on other people’s couches. They want to write – or do photography or documentaries. They have a lot to say, but it’s beginning to make more sense to apply for work as a cashier or a fry-cook.
This is the real face of journalism today: not million dollar-a-year anchorpersons, but low-wage workers and downwardly spiraling professionals who can’t muster up expenses to even start on the articles, photo-essays and videos they want to do, much less find an outlet to cover the costs of doing them. You can’t, say, hop on a plane to cover a police shooting in your hometown if you don’t have a credit card.
This impoverishment of journalists impoverishes journalism. We come to find less and less in the media about the working poor, as if about 15% of the population quietly emigrated while we weren’t looking. Media outlets traditionally neglected stories about the downtrodden because they don’t sit well on the same page with advertisements for diamonds and luxury homes. And now there are fewer journalists on hand at major publications to arouse the conscience of editors and other gatekeepers. Coverage of poverty accounts for less than 1% of American news, or, as former Times columnist Bob Herbert has put it: “We don’t have coverage of poverty in this country. If there is a story about poor people in the "New York Times" or in the "Washington Post," that’s the exception that proves the rule. We do not cover poverty. We do not cover the poor.”
As for commentary about poverty – a disproportionate share of which issues from very well paid, established, columnists like David Brooks of the "New York Times" and George Will of the "Washington Post" – all too often, it tends to reflect the historical biases of economic elites, that the poor are different than “we” are, less educated, intelligent, self-disciplined and more inclined to make “bad lifestyle choices.”
If the pundits sometimes sound like the current Republican presidential candidates, this is not because there is a political conspiracy afoot. It’s just what happens when the people who get to opine about inequality are drawn almost entirely from the top of the income distribution. And there have been few efforts focused on journalism about poverty and inequality, or aimed at supporting journalists who are themselves poor.
It hurts the poor and the economically precarious when they can’t see themselves reflected in the collective mirror that is the media. They begin to feel that they are different and somehow unworthy compared to the “mainstream.” But it also potentially hurts the rich.
In a highly polarized society like our own, the wealthy have a special stake in keeping honest journalism about class and inequality alive. Burying an aching social problem does not solve it. The rich and their philanthropies need to step up and support struggling journalists and the slender projects that try to keep them going. As a self-proclaimed member of the 0.01% warned other members of his class last year: “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”
Comments
+2 # 2015-08-08 18:45
But, you vent so well and with eloquence.
I think the pitchforks may well be sharpened but I don't know which disaster will get us first: global warming, Isis, economic meltdown, nuclear conflict with the Russians. The republicans are without a clue re these crises. I guess that's what comes from living in a bubble. They can't lead but they sure can block
Re journalists and jobs, back in the Thirties there was a federal program that provided jobs for out-of-work writers. Maybe, we need something like that once again.
+1 # 2015-08-08 21:10
Thank you. I appreciate your comments as well.
Playing the Vegas guy, I'd say we're facing a "perfect storm" of several threats all coming to a head at once. Here are 3 I think are pretty important:
-global warming (which will lead to starvation and economic meltdown like the world hasn't seen since the Dark Ages).
-inhumane technology threatening to destroy every facade of privacy, threatening our sense of human worth, threatening our control over our destiny, and threatening our Free Speech. This technology will make some people live well over 200 years, while others starve. Some "people" will be sort of "replicants". This technology will also continue the trend of weakening human creativity (e.g. "smart phones, dumb humans")
-further crassness (for lack of a better word) in our society. We're witnessing a complete destruction of our culture. A hundred years ago, Pop songs were much more sophisticated (in general). The average person felt more connected with the community around them (this negative trend is accelerating). People are becoming complacent, cynical and obnoxious. Our only concerns seem to be pecks, boobies, abs and asses.
*
Going Bankrupt Like Trump Did Is for High Rollers, Not Homeowners
08 August 15
onald Trump took advantage of the nation’s bankruptcy laws four times in the last 24 years, and if ordinary Americans in this country were allowed to do the same, the country would be in markedly better shape economically, with a far stronger post-recession recovery.
Asked during Thursday night’s Republican presidential debate whether his four corporate bankruptcies were a black mark on his economic stewardship, Trump sounded a bit defensive. “I have never gone bankrupt,” he said, making a distinction between a personal and a corporate bankruptcy, and anyway it was only four times among “thousands” of deals.
But he said flatly: “I have used the laws of this country just like the greatest people that you read about every day in business have used the laws of this country, the chapter laws, to do a great job for my company, for myself, for my employees, for my family, et cetera.”
Trump is absolutely correct. Every lending contract in America has the potential for bankruptcy lurking in the background. Lenders — who as Trump said “aren’t babies” but “total killers” — are sophisticated enough to know about this option when they lend people money. In fact, they not only assume the risk of bankruptcy, but price it into the deal when they lend Donald Trump or anyone else money.
Morals do not enter into the equation. No lender thinks less of Donald Trump for the using the bankruptcy process. They simply take their losses and move on.
In fact, only one group gets hit with this stigma. Only one group of people in America are denied this fully legal, fully rational, fully American opportunity to wipe the slate clean, and decried as deadbeats for even thinking about it: The homeowner of a primary residence, who by law cannot get mortgage debt discharged in bankruptcy.
During the foreclosure crisis, banks and their allies savaged homeowners who “walked away” from mortgage debt. They equated defaulting on payments with failing the duties of citizenship. They warned of “strategic defaults” by conniving homeowners who would deliberately stiff lenders to get a loan modification.
In reality, the highest-profile strategic default of the foreclosure crisis came from the leaders of the Mortgage Bankers Association, a trade group for the lending industry, who walked away from their 10-story headquarters in Washington. Just a few months earlier, their spokesperson argued that borrowers had to keep paying. “What about the message they will send to their family and their kids and their friends” if they defaulted, the spokesman asked. Indeed.
The Tea Party, the very movement whose energy Trump has tapped into so successfully, was founded on the principle of not having to “subsidize the loser’s mortgages.”
Businesspeople defaulting on each other never raised this kind of ire: only if ordinary people wanted to allocate losses in the greatest crisis since the Depression onto the banks who caused it did the rage emerge.
When Congress made an effort to change the bankruptcy laws, these same banks howled in protest. Members of the Obama administration, despite expressing support for the idea of allowing judges to modify primary mortgages during the 2008 campaign, decided to sit on their hands and let senators drowning in bank cash kill the idea, leading Sen. Dick Durbin to pronounce about Congress that the banks “frankly own the place.”
In fact, everyone would have benefited from relieving primary mortgage debt, the absence of which led to at least 6 million foreclosures. Economists Amir Sufi and Atif Mian have shown how the post-recession recovery was markedly slower because of the failure to discharge debt, which depressed consumer spending. This huge policy mistake created an unnecessary drag on the economy and made miserable the lives of millions, all so banks didn’t have to bear some of the pain of the post-housing bubble fallout.
Millions of lives were ruined by that asymmetry. When politicians rigged the bankruptcy game against ordinary people and refused to change it, many Americans felt cheated and used. Many turned against politicians who sell hope and lead them only to misery. Many get lured into thinking a non-politician armed with bumper stickers and snake oil, like Donald Trump, offers a refreshing change of pace.
If politicians didn’t make one set of rules for real estate tycoons and another for people who were fraudulently sold homes they couldn’t afford, maybe the public would trust them more. Maybe they wouldn’t look anywhere and everywhere else for leadership.
Unless you've experienced it for yourself, there's really no way to know what it's like. And, if you've been poor from birth, you also don't really have a perspective on it, because you don't realize how much you're missing.
Just venting.