House Call
The “Election 2012 Housing Health Check,” issued by the online real estate marketplace RealtyTrac in October, reported that 65 percent of local housing markets nationwide are worse off today than they were four years ago. Since January 2009, more than nine million homeowners have entered the foreclosure process or lost their homes outright. Over 12 million more are seriously underwater, owing at least 25 percent more on mortgages than their properties are worth. Behind these statistics are struggling households facing personal ruin, households that are unable to contribute to the nation’s elusive economic recovery.
By all accounts, restoration efforts for homeowners in the United States have been underpowered. Other countries have shown greater audacity in responding to the housing meltdown, and their economies are already enjoying the fruits of early and astute interventions. Iceland’s economy and its housing market have substantially recovered since the government implemented widespread debt forgiveness for homeowners, easing the debt burden for more than 25 percent of its population.
The Obama administration’s latest initiative to assist homeowners, a revision of the Home Affordable Refinance Program, known as HARP 2.0, is showing promise. But more creative initiatives would be welcome, and more pressure needs to be applied on banks to expedite loan revisions.
At press time, the nation was still juggling presidential prospects. Whoever wins on Nov. 6 needs to stop pretending that the “worst” of the housing crisis is behind us. Millions of U.S. homeowners know that is not the case; they can see it each month in boldface type right at the top of their mortgage statements.
War Against Want
In 1963 the late Senator George S. McGovern put forward a novel idea. By cutting the military budget by 10 percent, the government could expand the program known as Food for Peace. Senator McGovern was the first director of the program, which sought to distribute U.S. food surplus to impoverished nations abroad. He was also a strong critic of runaway defense spending. As early as 1963 he spoke against the buildup of U.S. military forces in Vietnam. His antiwar stance did not prove popular with the American public, who soundly rejected his candidacy in 1972 in favor of President Richard M. Nixon. Yet his stands against defense spending and on behalf of the world’s poor were prophetic.
Annual U.S. military spending now stands at nearly $700 billion. Meanwhile, aid programs both at home and abroad are threatened by Congressional plans to cut discretionary spending. These programs could be saved by reductions in the defense budget, but the military fiercely resists any cutbacks. Late in his public life Senator McGovern spoke against both the wars in Iraq and Afghanistan. A B-24 bomber pilot in World War II, he was an unlikely leader of the antiwar movement. Yet he knew from experience how war undermines the fiscal and moral health of a nation.
After losing his Senate seat in 1980, Senator McGovern continued to lobby on behalf of the world’s poor. He helped set up the United Nations World Food Programme and, with Senator Bob Dole, established an international school feeding program. With time, perhaps, the late senator will be recognized not for a historic election loss but for these momentous gains.
Now the Scouts
The following statement about perpetrators of the crimes of sexual abuse may sound familiar to Catholics: “That was a different time.... That was a time when people thought—the medical community thought—there was a potential for rehabilitation.” This is not a bishop apologizing for a priest. It is Wayne Perry, the president of the Boy Scouts of America, apologizing after the release of a cache of documents detailing accusations of abuse of “many thousands of victims,” according to The New York Times, allegedly committed by 1,247 scout leaders between 1965 and 1985. The parallels between the Catholic Church and the Boy Scouts are striking. Both of these institutions were seen as moral institutions charged with caring for children; both were organized in clear-cut hierarchies; and both instinctively tried to prevent the documents from being released. The B.S.A. called these records the “perversion files.”
The terrible revelations about the scouts, however, do not let the Catholic Church off the hook. Nor do they let Penn State off the hook. Child abuse occurs in a variety of settings: families, schools, social service agencies—indeed any setting that includes children. Even organizations that do not deal directly with children are prone to cover-ups: the British Broadcasting Company is embroiled in a case of ignoring the abuse of hundreds of young girls by a popular television host. The scope of these crimes points to the need for greater vigilance, continued transparency and further education about sexual abuse. The Catholic Church has made great strides in the prevention of abuse, but much work remains. In the future, the “perversion files” of every organization should be empty.
The current comment, “War Against Want,” has been revised to reflect the following correction:
Correction
An earlier version of this current comment misidentified the nature of the late Sen. George S. McGovern’s military service during World War II. Mr. McGovern served as a B-24 bomber pilot, not a fighter pilot.
Hopefully all this outing will raise what appears to be a dulled moral sense of the nation.
Regarding "House Call," ('Current Comment', Nov. 12, 2012), once again the magazine seems to betray an ignorance of its namesake nation's founding principles.
While it isn't said outright, it appears that the editors would love to see the federal government step in and somehow mandate large-scale mortgage forgiveness (or make it effectivley the only option). They might do it in Iceland, a more socialistic nation, but, come ON.... You have to realize that banking is a business. It is subject to regulations as are all businesses to one or another extent. Beyond this, it is not the government's place to interefere at will with its most basic core activity (taking in deposits and lending them out). Nor can it make whimsical ad hoc adustments to contract law, which says one contracted for these particular terms, which if unmet carry certain understandable consequences.
One may always attempt to re-negotiate on his or her own, and certainly no bank should get a pass for genuine deception or misconduct. But as far as merely noting that the housing sphere is depressed, and, understandably, wanting to help, well, to paraphrase an old saw, Iceland is a different country. They do things differently there.
These are some abiding principles of our civil society. But If the government wants to incentivize banks to re-negotiate, the most acceptable way is by offering to leave them alone to varying degrees more than it does now as a "reward." This it should do. Here there is room for the creativity you seek, on the part of the government. But much more so, when the correct chains are loosened (not all of them), we will see great creativity by the banks in becoming accomodating and using benign refinance policies as competitive weapons. That's our way.
re: "War Against Want," ('Current Comment,' Nov. 12, 2012) -
Agree or disagree with him, George McGovern was a genuine man of peace, and one with real credentials to speak out. Hopefully he is or will soon be enjoying the treasure he has stored in Heaven.
That said, why is defense spending hated so much? There is no argument that the Pentagon is as susceptible to waste, fraud, and redundancy as any other agency, and this must be ever more diligently ferreted out and extirpated. But there appears to be an almost visceral dislike of the concept of defense spending past artificial markers that have no validity in reality (e.g. we spend more per GDP than this or that group of other nations, or we spend this percentage of GDP vs. the percentage we spend on other items). The only condition that matters in defense spending is what we need in the way of defensive items.
Think of it this way.... There is a poor woman living in a leaky, roach-infested, crime-ridden apartment building in the "projects," with fear of getting robbed or worse every time she goes out of the apartment itself (or even if she doesn't), and then one day she meets a genie who can magically cure just one of these conditions, but not all. Which would the majority choose? Probably to get rid of the crime and threat of violence. Then one can actually look at her home as a shelter, if a poor one, and can think straight, and begin to use her creative gifts to better the other conditions. When one is under threat, that takes all one's mental function.
So it is with nations. We are a big place, and face many threats. We need a large, robust, and flexible defense. How would it benefit our society to spend half the defense budget on other items, only to appear weak (and we would; do not kid yourselves), emboldening those who would threaten. Peace through strength is all about deterrence by not firing a shot!