Beware false prophets

By
Gihan Perera                                                                     Read Spanish Version

From
The Huffington Post

Miami
was where it started: the easy financing of endless high-priced
condos without a clue of who would actually buy them. Ninety thousand
of them were built on paper; bought, and traded in the Magic City
before they were even completed. In the boomtown frenzy of quick
cash, high flip rates, the entire housing market went crazy in the
Sunshine State. Speculation got politicians drunk – Miami Mayor Manny
Diaz was on the cover of magazines as his newfound economic engine
heralded a renaissance of the city; the developers had saved us all.
Ballooning property values fattened city and state budgets. With free
flowing campaign contributions from high developers, the governor,
the GOP controlled state legislature, and the complacent Democrats
went along with drastic tax cuts that everyone knew would be
devastating when the bubble burst.

Meanwhile,
low-income communities were the canaries in the coal mine. At the
height of the bubble, low-income black and immigrant communities were
crying out about the disaster underneath. There was an affordable
housing crisis by 2003, as home prices began skyrocketing and both
state and private actors abandoned the preservation and production of
low-income and moderate-income housing. More importantly, real income
and real jobs were growing increasingly out of reach. There are no
"real" jobs that can pay the bills, no wages that can send
kids to college, no work that people can be proud of. While
developers and bankers threw champagne parties on South Beach to
celebrate the newly glitzy towers in downtown, the people of Liberty
City, Overtown, and East Little Havana had hit the downturn first.

Globalization
has finally caught up to America. What’s left is a hollow
de-industrialized economy in the heart land, and cities that were
built on serving the global finance industry or producing media and
entertainment that said it was all okay. The only standing industry
is the military, and even that is overstretched and not quite
providing the spoils that empire demands. For 30 years, the United
States was heralded globally and convinced us internally that this
strategy is flawless, that global free market fundamentalism is the
solution for humanity. For three decades, in rhetoric and in
aggressive policy, the U.S. has championed neo-liberalism where
governments around the world were forced to cut social programs and
taxes to allow corporations to run amok. And like in Miami, where
developers were allowed to make mega profits without any investment
back into community, where there was blind faith in the trickle down
theories, the world saw poverty deepen while the few that were
connected to speculation got fat.

Some
have called this casino capitalism, and for America the game may be
up. The position of the American worker shows the dilemma of U.S.
capitalism. As workers’ ability to make a living diminished, and
social safety nets were cut, Americans’ actual buying power shrank.
Just as easy credit, allowed for the creation of condos that nobody
could afford, borrowing filled the void that real wages once
provided. People began using credit cards and taking loans at an
unprecedented rate. This was not just people’s choice it was official
policy. The federal government fueled and encouraged loose credit,
and finance institutions happily followed. Especially in working
class communities that were strapped for cash, credit was loose.
Cheap loans were financial crack in the community. The economic
depression that is now coming was staved off through fake loans and
fake money, but the longer and bigger that fictitious capital grew,
the bigger the crash.

American
capitalism is in trouble. After decades of deregulation, union
busting, destroying social services, and saying that there is no room
for ‘big’ government, the government is now going to spend more on
the national financial bailout than any other government intervention
ever. The financial bailout would be the largest government
nationalization of an industry in the history of the planet. However,
despite spending all that money, the government, and moreover, the
public, are not going to own the banks. In other words, we are paying
for nationalizing the financial industry without actually owning the
assets that we’re buying. While opposed to big government spending on
education, housing, and social security, $700 billion is a free
welfare check for banks and insurance companies.

In
doing so, the government hopes to stabilize the credit industry in
the short term with overwhelming capital infusion. However, covering
all that fictitious capital does nothing to resolve the fundamental
issues in the U.S. economy. There is a double bottom line. If the
U.S. cannot produce something beyond movies and money managers, it
cannot survive. The strategy of the U.S. being the managers of the
world economy just went bankrupt. If working class people cannot buy
homes, food, and energy, with money in their pockets and not through
lines of credit, then there is no end to the crisis. The economy can
only be saved through those nasty two words: spreading wealth.

It
is time to flip the script.

The
good thing about the bailout is that a $700 billion price tag to save
the economy is now common. So, take that first $700 billion for the
banks and double it. Make it $1 Trillion, or more, which must be
invested in the incomes of normal folks to spark the economy. Scrap
the trickle down philosophy that resulted in inflated CEO salaries
while regular folks continue to suffer. Put the money directly in the
hands of our people and our communities. It’s that simple.

Second,
halt all home foreclosures and evictions. The mortgage crisis is the
largest loss of wealth in communities of color, ever. We must halt
the rapid erosion of wealth and ensure the basic needs of people are
met. Use the money to reestablish wealth in those communities through
underwriting empty homes and producing more housing in the urban
core. Give those assets to people and communities that have a long
term interest in their use and prosperity. Bring social security to
where there was speculation.

Third,
and most fundamental to the long term, we must ground the economy in
producing wealth and value. The emerging green economy can pave the
way to producing wealth again. It is a way out of the double crisis
we are facing: the economic crisis and the energy crisis of oil.
Massive investments must be made where the housing crisis first hit:
Black and immigrant low-income communities. Investing in
job-producing green enterprise in our communities – recycling plants,
alternative energy, and green building supplies – will ground us in
wealth-producing infrastructure for now and the future. And this
time, instead of just handing these assets over to greedy
corporations and banks, we need to imagine a new era of community and
publicly controlled enterprises where the jobs, knowledge, and wealth
stay in the community and serve the people.

Gihan
Perera is executive director and co-founder of the Miami Workers
Center — a dynamic organization which plays a leading role locally
and nationally in the social justice movement. The center has become
a national peer anchor to a number of strategic initiatives including
the US Social Forum, the Right to the City Alliance, and a number of
other efforts to build the theory, practice, and capacity of work
happening at the intersection of race, gender, the economy, and the
environment.