Why Can’t the U.S. Move Forward?

“Your dearest wish is for our state structure and ideological system never to change, to remain as they are for centuries. But history is not like that. Every system either finds away to develop or else collapses.” Aleksandr Solzhenitsyn wrote that in 1974, in his famous “Letter to the Soviet Leaders.” But it could just as easily be addressed to President Obama, Congress, members of the media, corporate chiefs, and others who lead and maintain the power structure in the United States.

The United States is as ossified as the USSR was before its collapse.

Shortly after the start of the financial meltdown which began in 2009, polls found American citizens disgusted with the capitalist system. Tens of millions said they would prefer socialism. When the Occupy Wall Street movement took off in 2011, mainstream pundits began using the “R” word, revolution – but only to ask a question with a predetermined answer. Regime change, they said, was neither desirable nor possible.

Too bad.

We used to be a growing country. Not any more. We used to welcome new states into the Union. It’s been 53 years since we added a star to Old Glory; Puerto Rican statehood isn’t a subject of serious consideration. We used to amend the Constitution to suit changing mores. The last major amendment, granting the vote to 18-year-olds, was ratified in 1971. Apparently equal rights for women is too much to ask.

We don’t build anymore. Think about infrastructure. The last major public works project in U.S. history was the Interstate Highway System, built in the 1950s – not coincidentally when the economy was booming.

Our political system is ossified too. The massacre at Sandy Hook Elementary School in Connecticut prompted calls for tighter gun control. But nobody – not even liberals, the traditional enemies of gun rights – argued for getting rid of the Second Amendment which, depending on your interpretation of the prefatory comma, allows us to join a militia or carry guns in our waistbands. “I have no intention of taking away folks’ guns,” President Obama has said.

Well, why not? Personally, I’m against gun control and I’m glad that very little is going to change. Yet I find it disturbing that the Second Amendment is considered sacrosanct, even by the 24% of Americans who want to ban handguns. Pointing out that the country is very different now than it was in 1789 seems reasonable. Maybe we don’t need guns any more. A smart country, one willing to weigh the alternatives when trying to solve a problem, should be able to discuss the possibility of repealing the Second Amendment.

Look at our national political dialogue, which ranges from center-right (Democrat) to right (Republican). Whole strains of ideology – communist, socialist, nationalist, libertarian – are off the table. We pretend most of the ideological spectrum doesn’t exist. Not smart.

Our national unwillingness and/or inability to have a wide-ranging debate reminds me of New York City, where I have lived for many years. There are no public restrooms. Restaurants and other businesses post “Restrooms for Customers Only” signs on their doors. Yet peeing outside is against the law; in fact, it’s public exposure, a sex offense that can land you on a Megan’s Law-style pervert registry. So where are you supposed to go?

A child could tell you this is insane. You know what’s even more insane? That we New Yorkers don’t even talk about it. Like Germans on their way to work in the early 1940s, wondering what that funny smell coming from the camp down the road might be coming from, we pretend that this is all perfectly normal.

As a recent New York Times article by Louis Seidman pointed out, we have foolishly elevated the Constitution to the status of a sacred text, fetishizing a supposedly “living document” that in truth has been dead for years. (Congress, for example, has the sole right to start wars. President Bush ignored the U.S. Supreme Court’s decisions concerning POWs at Guantánamo. And so on.) The result, Seidman argues, is endless petty bickering about what the meaning of “is” is – and what that stupid comma was supposed to be for.

The question for any society is not how to figure out how to conform ourselves to rules and assumptions laid down by our forebears, but to come up with the smartest solutions to our problems and the best systems to make things run smoothly now and in the future. If we were revolutionaries, if we were inventing the United States from scratch, would we create the Electoral College? Doubtful.

The people of the United States are changing all the time, but the United States government and power structure are stuck. The political “culture wars” date to the 1960s and 1980s. Our military thinks the Cold War is still going on.

Our economy reflects our national congealing.

Once a “land of opportunity,” the U.S. is now anything but. If you’re born into a poor family, your chances of elevating yourself into the middle or upper class are lower in America than in other industrialized countries. “It’s becoming conventional wisdom that the U.S. does not have as much mobility as most other advanced countries,” says economist Isabel Sawhill of the Brookings Institution. “I don’t think you’ll find too many people who will argue with that.” Aside from the unfairness and the instability caused by inequality and lack of social mobility, we’re losing the talents of tens of millions of Americans who will never be able to live up to their potential, share their ideas and contribute to the making of a more perfect union.

We haven’t had a major social or political revolution since the 1960s. It’s been too long. Like the Soviet Union, we must develop – scrapping long-held assumptions and reconsidering everything from scratch – or collapse.

I think we’re headed toward collapse.

(Ted Rall’s website is His book “After We Kill You, We Will Welcome You Back As Honored Guests: Unembedded in Afghanistan” will be released in November by Farrar, Straus & Giroux.)


First, Assess Blame

As everyone argues about who’s to blame for the mess, the economy continues to implode. I know, I know–this isn’t a party-line take. To which I say, I’m not a party-line guy.

Fix the thing first. Jail CEOs second.

SYNDICATED COLUMN: Stop the Bleeding

A Plan to Bail Out Scared Homeowners

  • Evictions must stop
  • Feds should bail out troubled homeowners
  • Government would take equity stake in home mortgages
  • Cost less than Iraq War

  • Unemployed and desperately worried about losing his home in a California gated community, Karthik Rajaram shot his wife, kids and mother-in-law before turning his new handgun upon himself. “We believe this individual had become despondent recently over his financial dealings and the financial situation of his household,” Los Angeles police said. One of his sons, age 19, was a Fulbright scholar.

    The previous week, a 90-year-old Ohio woman tried to commit suicide when cops tried to evict her from her foreclosed house. Fortunately, the gunshot wound wasn’t fatal.

    The financial crisis has claimed a number of lives, but few as poetically as that of Ian Beach of Halifax, Nova Scotia. Like a character in a Kate Chopin novella, the 47-year-old father of two “apparently took painkillers, drank a bottle of whisky and walked into the sea,” reported The Daily Mail in 2006, when the current epidemic of home foreclosures began to ramp up. “My trade in electronics gradually faded away and profit margins collapsed,” Beach explained in his suicide note. “I was not able to get another trade going to support us in time, and meanwhile debt built up. Bankruptcy was an option but the house problem was the last straw.”

    He figured his wife could use his life insurance to keep their family home. Guess again. Death by suicide is usually exempt.

    It’s time to stop the bleeding. It’s time to stop the evictions.

    We don’t want to repeat the Great Depression, when at least 23,000 Americans killed themselves. Moreover, foreclosure-related evictions destroy neighborhoods and further erode the economy. As newly homeless families wander the streets or couch surf with relatives, their empty residences become irresistible temptations for drug users, looters and vandals. Studies show that the average foreclosed home reduces the value of 48 neighboring houses by at least $5,000–in many cases, as much as $15,000. That’s a net total of nearly $250,000 in lost value for each foreclosed home.

    The median value of an American mortgage for 2005 (the most recent year data was available) was $93,000. Let’s look at how foreclosures are bad for everybody. If the guy next door is facing foreclosure, making your payments on time isn’t enough. It’s cheaper to team up with your neighbors and pay off your neighbor’s mortgage than to let his empty house lower your equity.

    Some people took out subprime mortgages they couldn’t afford. Do they deserve foreclosure? I don’t know. What I do know is that evicting homeowners hurts society so badly–in terms of increased homelessness, higher crime and healthcare costs, unemployment benefits paid to evicted people forced to move away from their homes, and reduced real estate values–that it ends up costing more than the amount of money owed.

    In Chicago, the Cook County sheriff has ordered his deputies to stop foreclosure-related evictions. “It’s one of most gut-wrenching things we do, seeing little children put out on the street with their possessions,” said Sheriff Thomas Dart. He said there has been an increasing number of renters–who have done nothing wrong and paid their rent on time–being thrown out of their homes as banks seize buildings from landlords who are in default. But his edict protects owners as well.

    Sheriff Dart is an American hero. Now we need a President Dart for the rest of America.

    It isn’t going to be John McCain. McCain’s proposed solution is the same tired litany of help-the-rich reductions of capital gains and dividend taxes Republicans have been pushing forever. Trust me on this, John: people getting evicted for defaulting on their mortgages don’t have capital gains or dividends to tax.

    There’s more hope with Barack Obama. The Democratic candidate has been apparently been cribbing from my 2004 book “Wake Up! You’re Liberal: How We Can Take America Back From the Right,” and I like it. He’s promoting my then-derided ideas for a tax break for companies that hire American workers rather than ship jobs overseas, and to abolish the despicable tax on unemployment benefits imposed by Ronald Reagan.

    On foreclosures, however, Obama is weak. He wants a 90-day moratorium on evictions. A nice start, but what happens after that? It’s not like the economy is going to recover any time soon.

    The right answer, the long-term solution, is to replicate the Wall Street bailout for individuals. It took a few weeks to get it right, but securities markets seem to like the coordinated effort by the European nations and the U.S. to pump cash into troubled banks in exchange for equity stakes–in effect, partial nationalization.

    And they said socialism was dead.

    The federal government should offer people (homeowners–not flippers, speculators, or owners of second vacation houses) the same deal as the banks.

    Let’s say you fall behind on your mortgage payments. A new government homeowner bailout agency–can we call it Teddie Mac?–offers you a choice. Option one: deal with the tender mercies of your lender’s Mumbai-based customer service reps. Option two: Teddie Mac pays your mortgage. Your lender gets paid. You stay in your home. The same offer applies to property taxes–we don’t want any “House of Sand and Fog”-type evictions either.

    What does Teddie Mac get? Equity in your home equal to the value of the payments you miss. If and when you sell your property, you settle up with Teddie at the closing. If the economy recovers and real estate prices resume their long-term climb, Teddie and the taxpayers make a profit. If prices stagnate or fall, it’s still worth it because society saves all those foreclosure-related expenses we talked about earlier.

    As of 2005 there were about 50 million home mortgages worth roughly $4.6 trillion. According to the experts, only about $1.4 trillion of that is at risk of foreclosure–and that’s the total, not the amount it would cost to stop evictions. If the feds were to take over payments in exchange for equity stakes in people’s homes–the same “partial nationalization” approach being applied to the big banks, remember–the net downside risk would be significantly less, probably a couple hundred of billion or so.

    In the worst-case scenario, bailing out homeowners would cost less–a lot less–than the cost of the war against Iraq. It’s less–a lot less–than the $700 billion-plus Wall Street bailout. It’s a hell of a lot less than the $5 trillion George W. Bush has added to the federal deficit.

    Otherwise, prepare yourself for more grisly tales of desperate homeowners with easy access to handguns.


    The Last American Job

    In 1945, with the Allies closing in on all sides and the regime crumbling, leaders of the Third Reich accelerated the Holocaust, assigning trains that could have been used for the war effort to carry tens of thousands of Jews to their deaths. Dying regimes, you see, have their priorities.

    At Tuesday’s debate, neither candidate dared to suggest that getting out of Iraq might help alleviate our current financial difficulties.

    Real Estate Hero

    McCain doesn’t only have an economic plan. He’s leading the way to recovery!