Recession as big as Texas pummels rural America

Image by Amy V. Miller via Flickr

RICHARD PARKER
Texas was slow to be swept up by the Great Recession. But now its pain has come home to big cities and small towns, as the lagging effects of the recession batter the ranchers, storekeepers and families who all withstood — until now.

While Washington's fury is directed toward the Gulf oil pill, it has largely lost sight of the recession. Yet Congress continues to weigh financial reform, and it would do well to remember the human cost of the Great Recession, triggered by the titans of Wall Street but borne heavily by everyday people.

Since the crisis began and through the first quarter of this year, more than $2 trillion in mutual funds have been wiped out, 4.5 million homes have gone into foreclosure and 6.8 million jobs have been lost.

With its art, eclectic character and natural beauty ours is one of the best little towns in the nation to visit; it says so right in the pages of The New York Times and Travel Holiday Magazine.

But for those of us who live here, a quiet crisis whispers of impending poverty. A merchant confides he can't take another year like the last two. A Mexican stonemason tells me that a single project tided his family through winter. A Realtor relays that all over town, people who never took a mortgage they couldn't afford are looking to give up, sell out and move on.

Today in Texas, one in five people struggle to feed themselves and one in five children live in poverty, according to the Center for Public Policy Priorities in Austin, founded by Benedictine nuns. Perhaps Perry's economic prowess will trail him out of the state like a coyote when he seeks the presidency.

However, this is not a Texas story but an American one, told in fiscal crises that stretch from California to Illinois, from Alabama to New York. It is in Washington where the Great Recession will be justly dealt with — or not. Realistically, after all, Congress and the regulators have assiduously polished their reputations as hand-maidens of the banks at least since the repeal of Glass-Steagall in 1999.

It doesn't take an expert to understand that much of the legislation in Congress is mere cover for the politicians and the big banks. It isn't designed to redress the latest crisis or stop the next one. It puts matters in the hands of regulators who consistently failed, to, well, regulate. Regardless of party, the politicians will let the big banks go on gambling with other people's money. The only real solution is to reinstate Glass-Steagall and break up the big banks. Only one senator, Democrat Ted Kaufman of Delaware, railed for that and against something dressed up in the Orwellian costume of "reform." More... loader.js" defer="defer">

Liberal Chomsky: Change we can believe in as long as you're a bank

Noam Chomsky via last.fm

Chomsky: Obama is ‘delivering, but for financial institutions’
Raw Story
Noam Chomsky: Obama is delivering, but for financial institutions. The nature of the current recession has made it clear to most Americans that a new wave of financial reforms is necessary to prevent another crash. MIT professor Noam Chomsky alleged that the Democratic establishment's reluctance to reestablish post-Depression type regulations is reflective of the systemic constraints on policy in America's dysfunctional democracy.

Chomsky, who has written many books detailing the perils of corporate influence in politics, said in an interview that the president and his party are hamstrung by fears that banks will punish them if they implement policies that do not satisfy the industry's desires.

President Obama is delivering, but for the financial institutions, he told Raw Story, which isn't a big surprise, “that was the core of his funding. They preferred him to McCain, in fact by a considerable margin. They expected a payoff, and they got a payoff."

The Obama administration last month walked into a public relations debacle after the president told Bloomberg News in an interview that he doesn't begrudge banking executives making large bonuses for their savvy skills.

That was very revealing, Chomsky said, alleging that Obama was merely heeding the threats from the banking community.

Obama months ago shifted his rhetoric and started talking about greedy bankers and even made some policy proposals the financial institutions didn't like, he continued. And they didn't waste a minute. They told him right off, you continue talking like that and we're going to shift our funding to Republicans. Well they did so.

One day before the interview, the New York Times reported that J.P. Morgan, which has traditionally preferred contributing to Democrats, directed most of its cash to the GOP this year. Campaign finance trends on OpenSecrets.org reveal that financial institutions have gradually shifted their funding away from the Democratic Party and toward Republicans in recent months.

And Obama got the message, Chomsky said. Within days, he said to Bloomberg that the bankers are great guys, I'm in favor of their profits and bonuses and so on; "that that's the way the free market works, and I join the American people in applauding their successes."

These are the same American people who are screaming bloody murder about all this, so that tells you something about how the country works, Chomsy added.

GOP's goal is to win back power by making the country ungovernable.

Chomsky's verdict on Obama and the Democrats may have been damning, but his take on Republicans was scathing.

"The Republican Party has transformed itself, since Reagan but much more extensively now, into a new kind of political operation," he told Raw Story. "It's abandoned really any political programs. Its only goal has been to prevent governability."

The MIT professor said the GOP's posturing as a small-government populist organization has been a disingenuous strategy to capitalize on nationwide anger and defeat Democrats.

"When critics call it the "party of no" they're pretty much correct," he continued. "They basically want to make the country ungovernable so that they can regain power and dedicate themselves to their actual constituency which is not tea party activists but corporate power."

Chomsky predicted the November elections won't be easy on the majority party, as enthusiasm among Republicans is far higher than among Democrats, who are largely apathetic now.