The significance of American real estate values is now being witnessed as major banks colse to the world have joined the U.S Federal retain to pump cash into our banking principles in hopes of preventing a worldwide economic catastrophe. Wall Street's cave-in has resulted from declining real estate values precipitated by our foreclosure crisis.
John McCain, in televised comments on Cnn September 19th located the blame for the financial crisis squarely on the backs of the poor and minorities by claiming that Fanniemae and Freddymac, the quasi-governmental mortgage giants, are to blame for approving sub-prime mortgages to habitancy that couldn't afford them in areas that were at one time red-lined. This is a thinly veiled reference to the mandate given by Congress to Fanniemae and Freddymac to increase the opportunities for home rights in minority communities. African-American and Hispanic borrowers are represented in the subprime shop at nearly triple their rates in the accepted market. Never mind that 61% of subprime borrowers would have distinguished for accepted loans or, according to Freddymac, minorities and the poor pay mortgage rates on the order of one to two-and-one-half division points higher in the subprime market.
Trickle Up Poverty
The Wall street Journal did a study confirming what experts like Martin Eakes at the center for Responsible Lending has been saying for so long - a majority of subprime borrowers had credit scores worthy of a prime accepted mortgage. By the end of last year that division rose to over 61 percent. according to their study many subprime borrowers may have been tricked into unaffordable loans by unscrupulous brokers.
Real estate estimate methodology has long failed to adjust for racial discrimination, selective bias, and since George W. Bush has been in office his administrations version of provide Side economics. Does, "The human condition" illustrate why current real estate estimate methodology fails to recognize and adjust for the lower values caused by the effects of Selective Bias, provide Side economics and racial discrimination on the estimate process? Can lower appraisals, for properties in minority communities, primarily be attributed to these factors and, if so, can the loss be measured in real dollars? Is the failure of appraisers to adjust for these factors responsible for the slow or non-existent increase of real estate equity in these communities? Was this failure a contributing factor in the misrepresentation of value in Wall Street's mortgage backed securities and therefore shares blame for the new meltdown?
The phrase, "The Human Condition" is well worn and refers to the ages old conflict of standard ideals like cooperation, loving and selfless behaviors contrasted with human nature which is invariably competitive, aggressive and selfish. We are capable of heavy love and sensitivity, but we have also been capable of greed, hatred, brutality, rape, murder, slavery and war. The human race demonstrates a social sense of guilt and agony from being unable to illustrate our duel personality. This has been seen by many scholars as the burden of human life or, "The human condition."
A great deal of what we believe is true depends on our perceptions; the first part of my pathology begins with a brief test of the economic theories which currently dominate our national political debate. I will later divergence the dominate principles espoused and implemented by our current President and his Party with those of his political rivals. In part two of the pathology the role of racial discrimination, selective bias and provide Side Economic principles as former reasons for lower real estate appraisals in African American communities is discussed. In part three, I will effort to measure the economic loss to the minority society specifically and to the larger society generally, which suffers a far greater loss in societal peace, wasted talent and loss of credibility colse to the globe. It is not surprising the inability of American leaders to generate a fair and just society has dimmed the beacon of hope among the economically disenfranchised habitancy of the world.
Since what we believe in affects our perception of reality this argument begins with my (the author's) statement of why I believe in the realities or truthfulness of the conclusions derived from this analysis.
My personal crusade for truth in answering the question, "why current estimate methodology fails to recognize and adjust for the effects of racial discrimination, Selective Bias and provide Side Economics on the estimate process" begins with a brief test of my beliefs, as an personel in American society, and the role culture and upbringing has played in helping to formulate those beliefs.
I have been a principle, either Senior Appraiser, Chief Appraiser or owner operator in small real estate estimate fellowships for the past 28 years. I was born during the administration of Harry Truman a Democrat and a man my dad vilified for dropping the atomic bomb on the Japanese when, according to him, World War Ii was essentially, over. Truman was the author of the famous, "Fair Deal" a 21 point schedule he presented to Congress which expanded social Security, created a full-employment program, a permanent Fair Employment Practices Act, and in case,granted for social housing and slum clearance. Even though Truman's "Fair Deal" helped the poor, we were poor as dirt, my father and grandfather remained devout Republicans.
My grandfather was born a slave and my dad was born, in 1902, just 39 years after President Lincoln signed the Emancipation Proclamation, which freed slaves in the United States. Dad was a sharecropper (a free slave) on the land of the family who had owned his father when news of Henry Ford's promise of equal pay for equal work came to him; he made the decision to move to Detroit.
Through work in the automobile factories of the northern United States my parents and many thousands of the descendant children of old slaves were able to come to be homeowners, buy automobiles and send their children to college. relaxation meant all things to my dad and grandfather and they felt indebted to the Republican Party for the rest of their lives. When I asked my father, during the 1961 Presidential campaign, why he favored Nixon over Kennedy, his response was, "the Republican Party is the Party of Lincoln." The example of my father and grandfather partially explains why I've only voted for one Democrat in my whole voting life. My parental examples are only a partial think since the political beliefs I hold now have been formulated by my perception of the larger culture and my lifelong role as a small business owner.
In 1981 Ronald Regan began his presidency. He ushered in the," Reagan Revolution", which aimed to reinvigorate the American habitancy and sell out their trust upon Government. "Reagan was able to push straight through legislation to stimulate economic growth, curb inflation, increase employment, and strengthen national defense. He cut taxes and Government expenditures, refusing to deviate from it when the strengthening of defense soldiery led to a large deficit. In 1986 Reagan obtained an overhaul of the income tax code, which eliminated many deductions and exempted millions of habitancy with low incomes. At the end of his administration, the Nation was enjoying its longest recorded period of peacetime prosperity without stepping back or depression.Overall, the Reagan years saw a rehabilitation of prosperity, and the goal of peace straight through vigor seemed to be within America's grasp." (whitehouse.gov)
Unfortunately, many in the Republican Party ascribed Regan's success to "Supply Side" or "trickle down" economics. This economic principles is based on the trust that reducing tax rates, especially for businesses and wealthy individuals, stimulates savings and venture for the benefit of everyone. provide Side economics only works if you have an economically strong middle class, because consumer spending by a wholesome middle class is, undeniably, the motor that drives our economy. Regan understood this fact as his overhaul of the tax code reflects.
Supply Side economic principles is the direct opposite of Keynesian Economic Theory, which appears to be a basis for the Democratic Party's economic plan. Keynesian Economic theory, which is named for economist John Maynard Keynes, advocates government intervention, or demand-side administration of the economy, to perform full employment and garage prices. (investorwords.com )
The current economic platform of the Republican Party failed because it did not adjust for the lack of potential job creation, as a necessity to maintaining strong consumer spending, in the provide Side equation. Add to this their past and current tax proposals to provide billions more in tax benefits to Big Oil and Pharmaceuticals while proposing little relief for the middle class. Another good example is the fact the Republican Party has no plan for national health assurance except to offer more choices beyond employer-based health assurance coverage. Under McCain's health assurance proposal families not receiving employer-based coverage will receive a direct refundable tax credit - effectively cash - of ,500 for individuals and ,000 for families to offset the cost of insurance. With Michigan families averaging 00 per month for secret assurance coverage (not straight through an employer) and health assurance premiums rising 4 times faster than wages, over the past 6 years, McCain's offer of ,000 a year is grossly inadequate. Source: National Coalition on health Care. Catlin, A, C. Cowan, S. Heffler, et al, "National health Spending in 2005." Health Affairs 26:1 (2006).
In contrast, the Democratic Party has proposed a health assurance plan that will provide affordable premiums, co-pays and deductibles with guaranteed eligibility. No American will be turned away from any assurance plan because of illness or pre-existing conditions. Financial subsidies will be in case,granted to individuals and families who do not qualify for Medicaid or need financial assistance. These families will receive an income-related federal subsidy to buy into the new social health assurance plan or purchase a secret health care plan. This proposal goes much additional toward helping the middle class because the think millions of Americans lack health assurance is cost, not availability. Source: National Coalition on health Care. Catlin, A, C. Cowan, S. Heffler, et al, "National health Spending in 2005." health Affairs 26:1 (2006).
Additionally, employers that do not offer or make a meaningful gift to the cost of potential health coverage for their employees will be required to contribute a division of payrolls toward the costs of the national plan. Small businesses will be exempt from this requirement, and will receive a new Small business health Tax credit that will help to sell out their health care costs.In 2007, employer health assurance premiums increased by 6.1 percent - two times the rate of inflation. The each year selected for an employer health plan surface a family of four averaged nearly ,100. The each year selected for particular coverage averaged over ,400.These costs are startling to rise at similar levels for the next decade. Source: National Coalition on health Care. Catlin, A, C. Cowan, S. Heffler, et al, "National health Spending in 2005." health Affairs 26:1 (2006).
The Republican Party has been thriving in defeating the Democratic Party, in the past, by labeling them as the tax and spend Party. However, under the current Democratic tax proposal only those with each year incomes over 0,000 will taste a tax increase. They will pay at the same rate they paid during the Clinton Presidency of the 1990's, a period of economic prosperity for most Americans.
Based on the Republican Party's current version of provide Side economics, from a purely self-interest standpoint, no one earning under 0,000 a year should be voting Republican in the advent election. according to the U.S Census Bureau 2006 Economic observe income Data description only 19.26% of American households had incomes exceeding 0,000. That means over 80% of American families earn less than 0,000 annually. The Census Bureau observe was completed in 2006 and uncut incomes have declined since then. according to the Treasury division and Congress' Joint Committee on Taxation, joint returns with more than 0,000 adjusted gross income and particular returns with more than 5,000 adjusted gross income together are estimated to make up only 3.1 percent of households in 2009. Let that sink in... More than eighty percent of American families earn less than 0,000 a year and only 3.1 percent of American families earn more than 0,000.This means that practically 97% of Americans are earning less than 0,000 and will receive a tax credit under the Democratic tax proposal.
The spreading failure of our largest banks and Wall street brokerages suggests that the financial hardships of the middle class are trickling up to the wealthiest Americans. The goose that laid the golden egg in America was its strong middle class not it's wealthy. The result of Republican provide Side economics has not only destroyed our middle class but eroded international trust in the dollar. This is a fact that will make the road back more difficult.
Despite eight years of failed, Republican Party, provide Side economics the Presidential selection in November is seen as a toss-up by most political pundits. Why? What pre-conditioning convinces Americans to vote against their own economic self interest? For my father and grandfather it was their sense of being indebted to the Republican Party for their freedom. But why would Americans in the year 2008 vote against their own economic self interest? Put simply, its race.
I am aware that political observers with far more taste and scholarly study will argue that race is not the extraordinary think the contest for the White House is a dead heat. These pundits and observers cite the fact that habitancy have not warmed to Obama because he is unknown and comes off as an elitist. Anyone who was editor of the Harvard Law reveal has to be an elitist, right? Obama's detractors also point out that he lacks experience, that he is a Marxist, a Muslim and the most liberal member of Congress. Most thoughtful, unbiased, voters don't believe any of these statements is true or can be given greater weight than his plan or Platform for America, distinct excellent intellect, strong family values and pragmatism. He seems to understand, that in the evaporative markets of today, all options must remain open.
I was bred to be a Republican but when I ask myself do I want four more years of the same failed economic policies, the riposte is a resounding "No". How could I vote for person who offers more of the same economic and foreign policies that have brought us to this place in our history?
People do not knowingly select to sow the seeds of their own destruction. Unless they are among the 3.1% of Americans who earn more than 0,000 a year, there must be Another schedule that is more prominent to them.
Since many of the polls, as of September 16th, had McCain with a lead, or the mathematical equivalent of a dead heat, most of his supporters, from a numerical standpoint, have to be Americans who earn less than 0,000 a year. This means that habitancy who over the last eight years have lost all of their economic security, as a result of McCain backed economic policies, (he voted with Bush 90% of the time), are supporting a continuation of those policies. Many Americans revealed during former exit polling they could not vote for Obama, a man of color, regardless of his apparent intellect, moral integrity and potential to lead. "About one in seven Pennsylvania voters said race was an issue and that group voted overwhelmingly against Obama." (David Wiessler, reuters.com) Based on Census voter registration figures the one in seven extrapolation, if applied to the electorate as a whole, could translate to more than seventeen million votes. In a tight selection that would ensure four more years of the same or similar policies that now define America's national economic landscape.
Based on my pathology of this selection cycle and the clear choices presented to Americans it appears the Republican lead in the polls is a prime example of, "The human condition." The possibility that millions of American voters will select to allow a continuation of policies that have robbed them of their homes, savings, jobs and the potential to provide a college education for their children as a result of hatred, fear and distrust of a worthy individual, because of his skin color, is numbing.
Americans are demonstrating a social sense of guilt and agony from being unable to illustrate the power of racial hatred and distrust in our politics and in every aspect of our day to day lives. The resultant emotional anxiety has created a duel personality in our national identity at home and to the rest of the world. The racial divide in America has been seen by many scholars as the burden of life in the United States or as discussed here, "The human condition."
The Human health - How It Has Crippled Economic growth And Political understanding In America Part 1
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