For the last several months,
analysts tied to the U.S. government and major banks and investment firms have
touted a recovery in the economy following the recession that began in late
2007. Citing rises in the stock market and some positive indicators in consumer
data, they have proclaimed that the worst is over, that the economy is back on
track and that capitalism has weathered yet another storm.
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The housing market, though, which
was central to the swindling and speculation that drove the latest economic
crisis, continues to put the lie to such rosy analysis. In fact, for workers,
the capitalist economy remains deeply depressed.
According to data produced by the
Mortgage Bankers Association May 19, more than 10 percent of homeowners missed
at least one mortgage payment in the first quarter of 2010, setting a record
with a percentage that has steadily grown in the last year. Additionally, 4.6
percent of homeowners were in foreclosure, another record.
Put more exactly, 4.3 million
homeowners have missed at least three payments or are in foreclosure.
These figures are placed against
adjusted historical data to suggest that the housing crisis is stabilizing or
even improving, but those claims are disingenuous at best. A touted spike in
new home sales in April, for instance, was tied directly to an expiring home
buyer tax credit, and the median home price that same month was its lowest
since December 2003.
For those millions of families at
risk of losing their homes, government aid has proven to be a dismal failure.
The Obama administration created a $75 billion foreclosure-prevention program
in March 2009—mere months after loaning and guaranteeing trillions to save Wall
Street—but 23 percent of the 277,000 homeowners who enrolled dropped out during
a three-month trial period.
Meanwhile, borrowers who took out
traditional, fixed-rate mortgages, not the risky adjustable-rate and subprime
mortgages at the root of the crisis, are now the fastest-growing group of
workers who face losing their homes. Economic tribulations, such as continued
unemployment and loss of income through furloughs, pay cuts and reduced hours,
are driving even these borrowers into foreclosure.
This creates a brutal circle in
which recession forces workers to lose their earnings, then their homes, which
in turn drives down prices, which prevents refinancing, which leads to
foreclosure, which further depresses prices—all of which places further
downward pressure on economic activity and continues the loop.
Should the prevailing weakness in
the housing market and other sectors of the economy continue, the result may be
a dreaded “double dip” recession, in which an anemic recovery is aborted by
renewed economic contraction. Workers will continue to pay the price for Wall
Street’s malfeasance and greed. Millions more could become homeless.
Economic crisis is endemic to capitalism. While workers’ lives are ruined,
bankers and speculators are bailed out by the capitalist government, using
money provided by the very people they victimize to create new opportunities
for profit. The only alternative is the revolutionary overthrow of this
criminal system, replacing it with one based on meeting human needs rather than
on private profit. Housing is a right! We need socialism!
