A reader comment following a Robert Scheer article this morning is worth quoting. The article, good in itself, takes Obama to task for failing to do more to alleviate the widespread foreclosure crisis that is threatening to stall the recovery, and calls on the President to fire the gang — starting with Summers and Geithner — that got us into this mess in the first place.
One reader said this:
” … the old law of supply and demand is kicking in. When too much of the money supply is accumulated in too few hands demand dies and the wheels fall off the economic train. Until wealth is redistributed and put back into the hands of consumers the economy can not recover.”
This cannot be repeated often enough. It sounds too simple to be true, but it is precisely true: “When too much of the money supply is accumulated in too few hands demand dies and the wheels fall off the economic train.”
Income inequality in the United States has now reached its greatest extent since 1929, on the eve of the Great Depression, and not coincidentally.
Where is the demand that will drive a recovery?
With unemployment high and manufacturing jobs fleeing to low-wage countries, with mortgage equities tapped-out, with the tax code jiggered to shift massive amounts of wealth from the middle class to the rich, where will the money come from for the spending necessary to drive a recovery?
Scheer raps the President for merely hoping the banks will do the right thing and help out distressed homeowners:
“The ugly reality that only 398,198 mortgages have been modified to make the payments more reasonable can be traced to the program being based on the hope that the banks would do the right thing. While Obama continued the Bush practice of showering the banks with bailout money, he did not demand a moratorium on foreclosures or call for increasing the power of bankruptcy courts to force the banks, which created the problem, to now help distressed homeowners.
When homes are foreclosed in a neighborhood the equity of those in the area who have faithfully paid their mortgages is slashed. And when the banks dump those foreclosed properties back on the market, prices drop even lower. Yet the administration has offered the most tepid of responses to stanch the fierce bleeding of home equity worth. A paltry $4.1 billion has been committed to efforts by the states to help the unemployed and other distressed borrowers stay in their homes. Compare that with the trillions spent on making the financial industry super-profitable once again.”
Keep all this in mind when you hear Mitch McConnell and John Boehner complain that the scheduled expiration of the Bush tax cuts for the rich, which Republicans designed into the law ten years ago, now constitutes a tax increase engineered by the Obama administration.
Isn’t it about time that the rich of this country step forward to make a small sacrifice — a return to the Clinton era tax rates — for the good of the whole country, the country for which they are endlessly and ostentatiously parading their patriotism?