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| Tarot cards. From master reader Jane Stern. |
Premise 1 is a graph we've never seen before, apparently since nobody ever thought of making it before, mapping changes in corporate profits against changes in private home equity during post–World War II recessions. Stoller hasn't made it very accessible, at 300 X 300 pixels, but the red line is houses and the blue line is profits and guess what? Home ownership is nowhere near recovering from its unprecedented plunge at the end of 2008, while profits, whose plunge was also fairly unprecedented, are zooming into the stratosphere! So, nu?
What I believe we learn from this chart is that if you think the crisis was caused by a sudden collapse in corporate greed, like an epidemic of poverty vows all over Wall Street, you would be mistaken. The housing bubble was, in fact, a housing bubble; and, while corporate greed has recovered magnificently, the total value of owned household real estate remains stuck. (And tulip prices in the Netherlands have never gotten back to where they were in 1637, either.) As I thought we all kind of knew already.
This split represents more than money. It represents a new kind of politics, one where Obama, and yes, he did this, officially enshrined rights for the elite in our constitutional order and removed rights from everyone else (see “The Housing Crash and the End of American Citizenship” in the Fordham Urban Law Journal for a more complete discussion of the problem).I'm sorry, no. I'm not going to go to the trouble to get a Lexis password so I can look at the Fordham Urban Law Journal, either. If you want to argue that "Property rights for debtors simply increasingly exist solely at the pleasure of the powerful," go ahead (I would advise you to get rid of one of the adverbs, preferably "simply", because the sentence is awfully hard to read). If you want to claim that Democratic presidents, Clinton and Obama, have not paid sufficient attention to the problem, be my guest. But if you're telling me that Obama "officially enshrined" something in "our constitutional order" you've go to either show me some paper or admit that you've dived into metaphor.
Premise 2 is a Barney Frank anecdote about the housing crisis as the Bush administration was dealing with it, between Obama's election and his inauguration. Frank told New York magazine,
I tried to get them to use the TARP to put some leverage on the banks to do more about mortgages, and Paulson at first resisted that, he just wanted to get the money out. And after he got the first chunk of money out, he would have had to ask for a second chunk, he said, all right, I’ll tell you what, I’ll ask for that second chunk and I’ll use some of that as leverage on mortgages, but I’m not going to do that unless Obama asks for it. This is now December, so we tried to get the Obama people to ask him and they wouldn’t do it.Stoller interprets this to mean that Bush's secretary of the treasury Henry Paulson offered Obama a deal to use TARP funds to write down troubled mortgages and Obama refused. Once again, no: that's not even possible if you accept Frank's story, since the story says explicitly that Obama was not asked. It's Rahm Emanuel, or someone like that, who is being accused of refusing to bring it to the president-elect for consideration.
Nor, even if it were true, would it constitute anything like Stoller's scenario:
Obama had a handshake deal to help the middle class offered to him by Paulson, and Obama said no. He was not constrained by anything but his own policy instincts. And the reflation of corporate profits and financial assets and death of the middle class were the predictable results.
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We are even seeing, as I showed in an earlier post, a transition of the American economic order toward a petro-state. By some accounts, America will be the largest producer of hydrocarbons in the world, bigger than Saudi Arabia. This is just not an America that any of us should want to live in. It is a country whose economic basis is oligarchy, whose political system is authoritarianism, and whose political culture is murderous toward the rest of the world and suicidal in our aggressive lack of attention to climate change.Really? Like Mexico, Brazil, and Norway?
And the graphs for this one (an operatic sequence of four), if they show anything, show that the US has become a real estate–state, with real estate representing an overwhelmingly larger proportion of private investment, even after the crash, than any other sector—including oil and gas, which lags just behind manufacturing and the information industry.
Anyway, it's just nonsense. Economic charts are not tea leaves or Tarot cards, to have interpretations teased out of them hermeneutically; they are merely evidence, and they don't mean a thing unless there is a coherent hypothesis for them to test. That Obama is the diabolical mastermind of a plot to impoverish the suffering middle class is not a coherent hypothesis. He may not be a very good president, in the end, and his aims are certainly not quite the same as ours; I may like to think he's more of the left than he himself realizes, and that he was sincere in the promises he was making four years ago, but I could easily be wrong; but he's definitely not a figure out of a comic book (as Romney really is in some ways, in his Magooishly confident unfamiliarity with normal life). This analysis of Stoller's is not the fruit of thought but of some deep, strange distress.
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