PrintDecember 22, 2007
The Guardian's Nauseating Anti-Americanism
We've seen it on display several times, the Guardian Unlimited's rank anti-American bias is so pronounced in this piece on the housing crisis, it defies belief.
First, the headline:
Tent City in Suburbs is cost of home crisis
The first three paragraphs of the story make it seem as if suburbia in America is shortly going to resemble African refugee camps:
ONTARIO, Calif., Dec 21 (Reuters) - Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.Invoking Steinbeck is classic. Dust Bowl! Farmers fleeing the depression! Homelessness! Crime! Disease! Except - no one in this tent city is there because of the housing crisis:
The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis. The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression.
As more families throw in the towel and head to foreclosure here and across the nation, the social costs of collapse are adding up in the form of higher rates of homelessness, crime and even disease.
While no current residents claim to be victims of foreclosure, all agree that tent city is a symptom of the wider economic downturn. And it's just a matter of time before foreclosed families end up at tent city, local housing experts say."While no current residents claim to be victims of foreclosure..." Then why bother highlighting a tent city to illustrate the housing crisis? Evidently, because some activist pimping for federal money says that eventually, they will be there.
"They don't hit the streets immediately," said activist Jane Mercer. Most families can find transitional housing in a motel or with friends before turning to charity or the streets. "They only hit tent city when they really bottom out."
Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high. "House prices are going down, but the rentals are sky-high," said Steve. "If it wasn't for here, I wouldn't have a place to go."
Hogwash! Most families suffering through foreclosure move into the rental market. As the article points out, that squeezes the price of rentals. But the people who end up on the streets won't be the families foreclosed on but rather people in the lower tier of the rental market. They are the ones who suffer - not the families who have lost homes.
The rest of the article is interesting because it tries to show how pockets of foreclosures are affecting the market. But the situations they describe - blocks where "60-70%" of houses are boarded up and empty - are extremely rare and not the norm at all. Recent surveys show that while foreclosures are a nationwide problem, they are concentrated in the west and southeast - places that not coincidentally experienced the biggest boom in housing during the last decade.
The real worry in this housing crisis is not necessarily foreclosures, although it is a personal tragedy for every family that loses a home. Rather it is what the bad loans are doing to the credit markets. The Fed has tried to pump cash into these markets and is not meeting with much success. And just yesterday, a Treasury Department backed plan involving 3 big banks who would have bought endangered mortgage backed securities was shelved:
One of the federal government's signature efforts to ease financial instability caused by the subprime-mortgage crisis collapsed as the nation's three biggest banks gave up on a fund intended to rescue tens of billions of dollars in troubled investments.Clearly, the crisis is not over and shows no sign of bottoming out. But that doesn't mean that families are going to flock to tent cities in suburbs once they lose their homes. That is nonsense and the Guardian reporter probably knows it.
The banks had been trying since September to set up a fund that would buy securities tied to mortgages and other assets that were controlled by banks in off-balance-sheet funds.
But events overtook the effort. By the time it began to try to gather assets, banks were already handling the problem themselves. Benn Steil, senior fellow at the Council on Foreign Relations, a nonpartisan think tank, said the plan was based on the flawed notion that the fund would pay more for tainted securities than would the banks themselves.
"I'm not surprised that this didn't happen," he said. "I never believed the proposal made much sense."
