Foreclosures point to systemic crisis

Economic processes are not seasonal, one-night stands or an act of nature or God. Although all those factors can appear in stories about the economy, and be parts of the equation, economic processes are human-made and are controllable.

Since 2001, Michigan has lost 305,000 jobs, with automobile corporations and supply companies slashing 122,000 of those jobs or about 40 percent of the total. In one year, July 2005–July 2006, 65,000 people left the state.

Last month, University of Michigan research specialist Donald Grimes told The Washington Post, “There’s a structural shift going on that’s undermining the unionized, industrialized states, and Michigan is leading the way.”

When Gus Hall, then national chairman of the Communist Party, used to deliver speeches to steelworkers in Youngstown, Ohio, and many other meetings of workers throughout the Midwest, he called it the “structural crisis of capitalism.”

For sale, foreclosures

Economists add numbers to what most families already know — what they can afford to pay for housing depends on wages and the stability of a job. If Ford, Adelphi, GM or DaimlerChrysler take a meat cleaver to the workforce to increase their profit margins, for sale signs spring up like crabgrass.

Although overshadowed by abstract discussions of the Federal Reserve, interest rates, the ever popular tax code and new so-called lending “products” like sub-prime mortgages and adjustable rate mortgages, families packing scrap books, kids’ trophies and grandmother’s handmade lace into the trunk of their car late at night is the reality.

The outlook for 2007 is bleak. According to the Center for Responsible Lending, 2.2 million families across the country may lose their homes this year. In 2006, 1.2 million families lost their homes, a 42 percent increase over 2005.

The Center for American Progress calls on the federal government to grant families money to hang onto their houses as well as expert assistance to help refinance mortgages. Democrats in Congress are calling for new regulations on banking and lending.

Structural crisis

Michigan is not alone. The once Steel City of Pittsburgh lost more residents between 2000 and 2006 than any other metropolitan area except New Orleans. But Hurricane Katrina was not responsible for 60,309 families packing up and moving out of this six-county area.

The former industrial metropolitan areas of Cleveland, Dayton, Toledo and Youngstown, Ohio, along with Buffalo and Rochester, N.Y., and Scranton, Pa., also witnessed an exodus.

It is hard to make a house payment when corporations decide to take their profits and run to the stock market or overseas. The families who produce those profits do not make those decisions. Banks and corporate boards do, and get rich beyond the wildest dreams of Henry Ford, Andrew Carnegie, John D. Rockefeller or even Bill Gates.

The collapse of the house price bubble has sent a wave of foreclosures across the country, with the Midwest states amongst the hardest hit. As the economy slows toward recession this year, other communities throughout the nation could start to look like Detroit, with boarded-up houses alongside the boarded-up factories and businesses.

When the steel corporations moved out of Pittsburgh area 26 years ago, then Allegheny County Sheriff Gene Coon refused to foreclose on homes.

We need more sheriffs like that today, along with public officials at all levels who will fight to put the burden of this crisis on the banks and Wall Street investors, instead of on hard-working families.

dwinebr696 @ aol.com