Sunday, December 09, 2007

HRC's economic stance, in a nutshell

I was reading HRC's speech to Wall Street on the mortgage meltdown. It's a good speech overall, more critical in tone than I would have expected, given the audience. She has a set of paragraphs in the middle part of the speech that are very good:

As we’ve seen the home foreclosure crisis these past few years build, the ripples from Wall Street we know, can have a significant impact on families far away in Pahrump, Nevada, where I recently was and other places that might never give much of a thought to what goes on here, but whose daily lives will be impacted. As we’ve seen with the home foreclosure crisis, too many American families are not sharing in the growth that is created and driven from this city.

Now, productivity has risen 18 percent among American workers over the past six years, yet wages have stayed flat, and family incomes have fallen by nearly $1,000. There are five million more people in poverty here in our country than there were in 2000.

On top of stagnant wages, we’ve seen a rise in economic anxiety. Students struggling with the skyrocketing cost of college, families burdened by health care costs, premiums have doubled in the last six years, and we see the increasing role that energy prices play in people’s lives.

Gas prices have doubled in the past seven years. Home heating costs continue to rise. In fact, the typical family is paying $2,000 more for energy this year than in 2000. That’s like a $2,000 energy tax - more than 3 times what the typical family got under the Bush tax cuts.

We’ve seen people hit hard by a deepening housing crisis. Families who’ve worked hard, thought they were doing the right thing. Who’ve spent years scrimping and saving to buy a house, but their dream of homeownership has turned into a nightmare of escalating payments and threatening letters.

In short, we’ve seen too many middle class families struggling in an economy that is simply not working for them right now. An economy that, in recent months, has been the subject of increasingly worrisome headlines about weakening consumer confidence, about a declining dollar and ballooning national debt.

Now these economic problems are certainly not all Wall Street’s fault - not by a long shot. But the reality of our interconnected economy is that what happens on Wall Street impacts main streets across America. It happens sometimes within minutes, sometimes over the course of months or even years.

If we’re honest, we need to acknowledge that Wall Street has played a significant role in the current problems, and in particular in the housing crisis. A "see no evil" policy that financed irresponsible mortgage lending. A bond rating system riddled with conflicts of interest. A habit of issuing complex and opaque securities that even Wall Street itself doesn’t seem to understand.

I believe we need a new beginning in our economic policy - one that strengthens our middle class and ensures that prosperity is widely shared, and is based on an ethic of shared responsibility. A new beginning that makes Wall Street shoulder its responsibility for this crisis, and that gives homeowners the breathing room they need. One that makes the most well-off among us pay our fair share and gives the middle class the help it needs for education, health care, and retirement security.

Our economy has been at risk by investment schemes aimed at making not just a few, but many extra dollars, and we need to start insisting on the right rules and transparency so this doesn’t happen again.

So I’m here today to call on Wall Street to do its part - to help end the foreclosure crisis that is devastating middle class families and threatening the health of our economy.

Notice the theme - New Beginning. She hits solidly on the fact that real income is not rising, higher education is more difficult to get and that ordinary living exspenses (exemplified in fuel costs) are growing. She also smacks Wall Street for mismanaging the mortgage situation, whcih echoes Tanta's argument on Calculated Risk that the people with the greatest access to industry information have a greater level of responsibility in this mess than ordinary borrowers.

Health care, education and retirement security. Be well, give your kids a good start, grow old with dignity. Not bad. As I've argued before, no one wants to give hand outs to "the poor" because, in today's America, the poor are non-whites and illegal immigrants. The successful social programs in America are those that are for "the middle class". And we just make sure that the middle class is a damn large and inclusive niche. Make the other guys argue for exclusion rather than single out groups for help that they can demonize.


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