Sunday, July 31, 2016

She Stoops to Conquer: Notes From the Democratic Convention





























+ First things first. I want to apologize to the Sandernistas for any impolite things I may have written about you in the past 10 months. I especially want to apologize to those of you who rose up after your leader abandoned you, after Bernie wiped out your votes and muted your voices, after he turned you over to the DNC’s thuggish floor managers and security guards, after he sat passively as your brave chants of “No More Drones” were drowned out by the fascist war-cry of “USA! USA!!” I want to apologize for doubting your resolve. I want to apologize without qualification. You didn’t cry when Bernie betrayed you. Not for long. You marched right back into the Wells Fargo Center intent on spoiling the party. You didn’t sour on your ideals. You refused to be domesticated. You pissed on their carpet. You shouted down their war criminals. You made this squalid affair fun for a few precious hours. And that ain’t bad. Somewhere Abbie Hoffman is cracking a smile (though perhaps not at the spectacle of Meryl Streep ripping off his wardrobe during her bewildering performance, an act so incoherent it made one long for the Absurdist theater of Clint Eastwood and his empty chair routine.)

+ I woke up this morning with a hangover that has defied the usual remedies. Too much mezcal from the Kaine Drinking Game (one shot for every reversal of a long-held position). Too many hours of tedium, dread and bombast. For relief, I turned to the Holy Text itself, Fear and Loathing on the Campaign Trail: ’72 and drank in HTS’s savage denunciation of lesser-evil voting:

“How many more of these goddam elections are we going to have to write off as lame but ‘regrettably necessary’ holding actions? And how many more of these stinking double-downer sideshows will we have to go through before we can get ourselves straight enough to put together some kind of national election that will give me at least the 20 million people I tend to agree with a chance to vote for something, instead of always being faced with that old familiar choice between the lesser of two evils? I understand, along with a lot of other people, that the big thing, this year, is Beating Nixon. But that was also the big thing, as I recall, twelve years ago in 1960—and as far as I can tell, we’ve gone from bad to worse to rotten since then, and the outlook is for more of the same.”

[…]

+ Trump took to Twitter early this morning, as his hair was being replastered into place, and denounced the All Star lineup at the Democratic Convention last night as an orgy of “empty rhetoric.” He wasn’t wrong. The whole affair had the feel of one of those rock concerts featuring bands from the 1970s. The first few phrases were thrilling, then it all started to fade away into a nostalgic stream of familiar hooks and licks you’ve heard a thousand times before on Classic Rock AM radio. All played very well with magnificent staging and a dazzling light show, yet utterly antiseptic. The curious Tim Kaine interlude was the lone exception. It was hard to tell if his performance was camp or kitsch.

+ Here’s another reason to like Harry Reid and lament his looming retirement from the Senate. Shortly after his speech at the Democratic Convention, Reid laid some wood on the DNC. He said he was appalled by the DNC’s efforts to sabotage Bernie Sanders’ campaign, saying “Sanders didn’t get a fair deal.” Reid was asked if the Democratic Party has a back-up plan if further damaging emails emerge that might cripple Clinton. He shrugged his shoulders and said flatly, “No.” Then again maybe Bernie deserved his fate. After all, he went along with the crushing of his campaign willingly enough, kind of like Al Gore in 2000, when he refused to challenge his own stolen election. Bernie basked in the spotlight of his great betrayal, a surrender marketed as “unity.” He savored each small, patronizing mention of his name last night by Kaine, Biden and Obama. Meanwhile, Sanders capitulated to demands from the DNC that he agree to prohibit own of his most ardent supporters, Nina Turner, the black former state senator from Ohio, from appearing on stage to place his name in nomination. “If it were BeyoncĂ©,” Susan Sarandon fumed, “they would’ve made it work.” It’s even worse than that, Susan. The DNC is giving prime time slots on the stage to lesser talents than BeyoncĂ©, including Carole King and Katy Perry.  Turner’s crime? She’s refused to kneel down and endorse Clinton. Bernie’s crime? He choose Hillary or Nina Turner. I tell you again: there’s a reason so many blacks were suspicious about Sanders from the very beginning.

+ The New York Times reports that after spending most of the spring in hiding, mega-donors are flocking back to the Clinton campaign. With Bernie vanquished and pacified, it is now safe for the powerbrokers of the Clinton cash machine to re-emerge, after being asked by the campaign to be discreet during the primaries. Now hedge funders, insurance execs, Big Pharma lobbyists and securities traders can get back to the business of wining and dining the Clinton Team with style. Don’t worry though. This is their last hurrah, before Hillary, you know, Citizens United and slums shut the access door on them permanently (wink, wink)…

+ Ned Sublette, author of the monumental American Slave Coast, writes to remind me that Bill Clinton did a 180 on Cuba policy. He campaigned on a pledge to normalize relations with Cuba, then in 1996 did the opposite when he signed the vicious Helms-Burton Act, which tightened the embargo on Cuba nearly to the point of strangulation. The man who prodded Clinton to do so? Leon Panetta. Hit the replay button and shout him down again, in Spanish this time.

+ We will no doubt be bombarded tonight with a cluster bomb of references to Hillary’s brittle little book, It Takes a Village, which Cockburn savagely reviewed in The Nation, earning him a raft of rebukes from the feminist lobby. Here’s a nugget that sums up the Clintonian approach to the exploitation of children for their political advantage:

“The Clintonite passion for talking about children as ‘investments’ tells the whole story. Managed capitalism (progressivism’s ideal, minted in the Teddy Roosevelt era) needs regulation, and just as the stock market requires—somewhat theoretically these days—the Security and Exchange Commission, so too does the social investment (a child) require social workers, shrinks, guidance counselors and the whole vast army of the helping professions, to make sure the investment yields a respectable rate of return.

“The do-good progressives at the start of the century saw the family—particularly the immigrant family—as a conservative institution. So, they attacked it. Then their preferred economic system—consumer capitalism—began to sunder under the social fabric, and so today’s do-gooders say that the family and the children, our ‘investment,’ must be saved by any means necessary. When the FBI was getting ready to incinerate the Branch Davidians they told Janet Reno the group’s children were being abused. Save them, she cried. They went at it and all, including the children, were burned alive.”

It will come as no surprise to seasoned Clintonologists that Hillary didn’t actually write the book herself. It may, but shouldn’t, come as a surprise that Hillary (like Trump) stiffed the ghost-writer of the It Takes a Village out of the final payment. For the gory details see Doug Henwood’s book My Turn.

+ Chuck Schumer: “I’m not worried about the white working class voters. For every blue collar white male we lose, we’ll gain two college educated women voters in the suburbs.” I’d put my money on the TPP passing before Christmas.

What else would you expect from Schumer? The only regular interaction he has with working class people is the elevator operator at Citibank when he rides up to the executive suite to pick up a campaign check.

I’ll give Schumer this much. Though the Senator looks a little awkward, he must be a remarkable athlete. All these years racing from one TV camera to the next and not even a sprained ankle.

+ I used to admire Laurence Tribe. I don’t remember why now. I have a vague memory of him as a fierce defender of free speech and civil liberties. But here he is serving as a Clinton attack dog for the red-baiting of Donald Trump. In lockstep with the National Security elites, Tribe ludicrously said Trump’s snarky remarks asking Russia to return Hillary’s missing emails may have violated US law. If so, then you’d expect someone like Tribe to rush off to court to have such a law stricken down as unconstitutional. He knows it’s all bullshit, but is apparently happy to play his role in the new McCarthyism. Perhaps Tribe thinks he’s finally going to land on the Supreme Court. I’d support a Rand Paul-led filibuster against him. Have you no shame, professor?

+ Expect some flood warnings as the tears begin to flow when the nation celebrates its own enlightenment in finally nominating a woman for president. The rest of the world will view this “historic moment” as something of a participation trophy. Eighty-five women from 54 different nations have already been elected or appointed as heads of government starting in 1960 with Sirimavo Bandaranaike of Ceylon (Sri Lanka). Women have led governments in: India, Israel, Central African Republic, UK, Portugal, Dominica, Norway, Pakistan, Lithuania, Bangladesh, France, Poland, Turkey, Canada, Burundi, Rwanda, Bulgaria, Haiti, Guyana, New Zealand, Mongolia, New Zealand, Northern Cyprus, Senegal, South Korea, Sao Tome and Principe, Finland, Peru, Mozambique, Macedonia, Ukraine,  Liberia, Bahamas, Germany, Jamiaca, Ukraine, Moldova, Haiti, Iceland, Croatia, Madagascar, Trinidad and Tobago, Australia, Slovakia, Mali, Thailand, Denmark, the Philippines, Guinea-Bissau, Slovenia, Latvia, Transnistria, Poland, Namibia, Greece, and Myanmar.

+ Terry O’Neill, head of Now, was asked about the tardiness of the US in relation to the rest of the world in electing a female head of state. Her response was a strange, almost misogynistic putdown of other women world leaders. “Many of them weren’t feminists. Hillary was a born feminist. It was a harder road for her.” USA! USA!

If Elizabeth Dole or Sarah Palin had somehow been elected president, I wonder if NOW would have put an asterisk by their names?

+ Working class hero Sherrod Brown, the Ohio senator who was snubbed for the VP slot, told CNN that: “We’re going to win in part by showing that Trump is a hypocrite on trade.” Did he run this message by Hillary and Kaine?

+ So far it’s 6 for 6. 6 speakers 6 “God Bless Americas.” There goes Tammy Duckworth. Make that 7 for 7. Despite the allegation by Ben Carson that Hillary communes with Lucifer, it’s looking like it will be another big night for God.

+ Here comes Elizabeth Warren to give yet another testimonial to her new BFF, HRC: “Hillary is a fighter who never gives up for the people who need her most.” Like Goldman Sachs, Monsanto and Benjamin Netanyahu. You can take it to the bank.

+ Joaquin Castro, the rising political star from Texas, is now on stage talking about how sensitive Hillary is to the plight of Mexican immigrants and undocumented aliens. This wasn’t always the case and who really knows if it is now. During the NAFTA debates, the Clinton administration went hard after the perils of Mexican immigration, using language that Trump may have cribbed. Al Gore even went so far as to blame Mexican immigrants for the spread of Satanic abuse in the US. This was a double lie. First, Mexican immigrants weren’t practicing Satanic abuse (or Santeria, as the Clinton people also alleged). And second there was NO Satanic abuse epidemic. Hard to document even a single real case. But these pernicious and racist lies helped sell the deal that continues to debilitate people on both sides of the border.

Remember that Hillary strongly backed the cruel Obama administration policy of rounding up thousands of immigrant children and sending them back to Mexico, El Salvador and Honduras. When Sanders confronted her once or twice, she essentially pulled a Madeleine Albright and said it was the right thing to do. All for the children, you understand.

+ Chris Cuomo is giving a tribute to his father Mario Cuomo, both of whom worked as lawyers for…Donald Trump. Trumps and Cuomos go way back. In fact, Donald encouraged Mario to run for president in 1988 (he hated Bush) and Mario urged Donald to run for governor of NY, after he stepped down. Bi-partisanship you can believe. (See Wayne Barrett’s Trump: the Deals and the Downfall)

Cuomo is attacking Trump for “selling fear,” as he simultaneously sells fear of Trump. The Republicans sell a dark dystopian fear. While the Democrats sell fear with a smile and a drone strike.

+ Melania Trump’s petty crime of word theft was much less noxious than the Democrats flagrant cribbing of the GOP’s rabid USA! USA!! chants.


+ Nancy Pelosi, defender of the poor & alleged inside stock (Visa) trader. Net Worth: $58 million. Who says West Coast liberalism doesn’t pay?

Pelosi mumbles unintelligible syllables into the microphone for five minutes and flies off to check her portfolio to Wagner’s “Ride of the Valkyries.”

+ Ted Danson and Mary Steenburgen have shown up to talk about how Hillary practices the “poetry of doing.” Doing what, one might ask? Steenburgen, a native Arkansan, is the woman Bill Clinton reportedly took out to dinner the night he executed the brain-damaged Ricky Ray Rector to boost his poll numbers in the 1992 campaign. There’s ice running through those Clinton veins. Mary Steenburgen, the woman Bill Clinton took out to dinner the night he executed the brain-damaged Ricky Ray Rector to boost his poll numbers in the 1992 campaign. It’s one thing to mock the disabled; it’s something else entirely to put them to death for your own political advancement.

+ Have the speakers tonight been instructed to be boring in order to make Hillary seem livelier by contrast? Or are they just flatline boring by nature?

+ I said last night that Obama’s speech was written in the key of Reagan. Now here is one Reagan’s speechwriters, Doug Elmets, giving a full-throated & unconditional endorsement of Clinton, as the true heir of the Reagan legacy. Can anyone prove him wrong?

+ Yet another cop at the Mic, a moment of silence for the fallen police and speeches from relatives of dead officers. The Democrats have featured more cops as prime time speakers than the GOP, all of them lecturing about how “violence isn’t the solution” to anything. Since January 1, 668 civilians have been killed by police.

+ DNC Convention Motto for Coronation Night: “God, the flag and drones.”

There seem to be more flags in the hall tonight than at Arlington Cemetery on Memorial Day. Curiously, despite the non-step odes to the dead, none are being waved at half-staff. Thanks for the memories…

+ Rev. William Barber: “Jesus, a brown-skinned, Palestinian Jew…” Can’t wait to see how Bill O’Reilly explicates that tomorrow night.

Whoops, he said Palestinian again! They may have to pull Rev. Barber off the stage to keep him from saying the word “Palestinians” once more. By a special order of the convention rules, “Palestinians” are only allowed two mentions for the week.

+ The chants of USA, USA!! during Khizr Khan’s moving and powerful speech about his slain son is revolting. Do you have to be a “patriotic” American Muslim to enjoy the rights of the constitution that Khan showed? If you are a “patriotic Pakistani” does that protect you from a CIA drone strike?

+ Gen. Allen’s deranged speech could have been written by Donald Rumsfeld. Perhaps it was. I feel like I’ve just watched the first 45 minutes of Full-Metal Jacket again.

+ Trump has really gotten under the skin of the military-security establishment. His repeated swipes at NATO did it. They’ve united behind HRC. You’ve got to give him that. On the other hand, it gives an ominous new meaning to “Stronger Together.”

+ Who knew the Democratic National Convention would turn into a military recruitment video?

+ How can they possibly top this? A live drone strike on the big screen?

+ Two parties, both proto-fascist. How to choose?

+ If I were the Iranians and North Koreans, I’d be hardening my bunkers, pronto. Assad should probably book a room at the nearest Ecuadoran Embassy.

+ Gen. Allen just annihilated every humane sentiment expressed in Rev. Barber’s powerful sermon. Perhaps that was the point.

+ We begin to see the outlines of Hillary’s economic plan: military Kaine-sianism.

+ Bernie, how do you like your party now?

+ I wouldn’t be shocked if those super-charged delegates goose-step out of the Wells Fargo Center tonight to invade Delaware, waving their flags and chanting USA, USA!!! all the way to Dover.

+ Boomer, our Australian Shepherd, still hasn’t emerged from the closet where he fled during Gen. Allen’s war rant. Who can blame him?

+ Hillary has already out-Thatchered the Iron Lady and she hasn’t been elected yet. She’s made the complete metamorphosis from a Goldwater girl to a McGovern woman to a Reagan granny.

+ Mission Impossible: Chelsea trying to humanize her mother after the blood-thirsty madness of the previous 30 minutes.

+ Chelsea says her mother lost the fight for “universal health care.” Not true. Her plan wasn’t for “universal health care”, another market oriented scheme called “Managed Competition” and she fucked up that through her own incompetence and hubris, setting back the cause of single-payer by at least a generation. No wonder Chelsea decided not to go to med school.


+ “How many times will she leave her mark? How many ways will she light up the world?” the disembodied voice of Morgan Freeman asks. Well, how many drones and cruise missiles can Lockheed and Boeing manufacture in four years?

+ The word of the night is fight, fight, fight, fight, fight. I don’t know if the children are scared, but I am.

+ I am Woman, hear my missiles ROAR!

+ People in the audience are crying. I’m crying. I don’t think we’re crying for the same reasons.

+ Hillary looks and sounds more and more like Cersei Lannister with each new speech.

+ Hillary once again embraces Reagan to bash Trump. Reagan left the Democratic Party in the 1950s, but the Party apparently never left him.

+ I’m getting a weird vibe that they might actually bring out Qaddafi’s head on a pike.

+ HRC says the “service part” always came more naturally to her than the “public part”. Well, that explains the private email server…

+ In her brisk recitation of the Rodham family history, Hillary somehow left out the fact that her father was a John Bircher. Of course, by the end of Hillary’s 2nd term her father may seem as meek as George McGovern.

+ Does Hillary cough every time she lies, or does she cough every time see stumbles into the truth?

+ Note the repeated emphasis on “believe” instead of “know” in Hillary’s description of her political ideology. My friend John Trudell used to warn against the “believers.” “Think more, believe less” he said. In Hillary’s case, “believe” is likely shorthand for “make-believe.”

+ The comparisons of HRC to Lady Macbeth are grossly unfair…to Lady Macbeth. Lady Macbeth had a conscience.

+ She says she loves to talk about her “plans.” Has she started yet? I haven’t heard one specific plan. Maybe she’s talking about her invasion plans. Oh, yes, she getting around to that now…

+ Pledge fealty to Israel. Check.
Defend NATO. Check.
Bash Russia. Check.
Destroy ISIS (by funding Al Qaeda?). Check.
Praise the Generals. Check.
Hail our military (and its defense contractors) as a national treasure. Check.
Salute the troops. Check.
America is great. Check.
America is good. Check.
America is not a bully. Check.
Manifest Destiny. Check.
God bless America. Check.

+ Unlike Hillary’s idol Ronald Reagan, there was no pledge to eliminate nuclear weapons. Just a vow to have a more stable hand on the button than Trump. Like that Harry Truman. Duck and cover.

+ How appropriate that it all ends with Hillary and Kaine standing before a golden (or is it, Goldman?) shower raining down on America!

+ As a final blessing, Hillary’s preacher has come out to confirm at last what we’ve long suspected: there’s a Methodism to her Madness.

+ All Sandernistas should leave the Wells Fargo Center before they lock the exits. (See Red Wedding.)

+ Hillary passed her audition. She’s the authentic Queen of Chaos and when she stoops, she stoops to conquer.

Notes From the Democratic Convention










































Hillary’s Convention Con























The 2016 Democratic Convention in Philadelphia was a multi-layered, raucous display of political theater. A host of delegates loyal to Senator Bernie Sanders were inside in large numbers exclaiming “No more war” during former Secretary of Defense Leon Panetta’s speech and raising all kinds of progressive, rebellious signs and banners against the Hillary crowd. Although Hillary addressed them directly in her acceptance speech, “Your cause is my cause,” those dissatisfied delegates in the hall saw her rhetoric for what it was: insincere and opportunistic.

She said she’d tax the wealthy for public necessities, but declined to mention a sales tax on Wall Street speculation that could bring in as much as $300 billion a year to support such initiatives. She opposed “unfair trade agreements,” but remarkably omitted saying she was against the TPP (the notorious pending Trans Pacific Trade Agreement backed by Obama that is receiving wide left/right opposition).

She paid lip service to a “living wage” but avoided endorsing a $15 an hour minimum wage, which would help single moms and their children – people she wants us to believe have been her enduring cause. Few people know that it took until the spring of 2014 before candidate Clinton would come out for even a $10.10 minimum wage. News reports noted that Clinton, a former member of Walmart’s board of directors and Arkansas corporate lawyer, was wrestling with how to support $10.10 per hour without alienating her Wall Street friends.


“Caring for kids” doesn’t extend to encircled Gaza’s defenseless children, hundreds of whom were killed by American-made weapons wielded by the all powerful Israeli military. Gaza is the the world’s largest open air prison and under illegal blockade. Remember, as Secretary of State, Hillary fully backed war crimes, condemned by almost all countries in the world. On the stage in Philadelphia, she spoke of backing Israel’s security without any mention of Palestinian rights or the need to end Israel’s illegal occupation of the territories.

It is true, as numerous speakers repeated, Clinton is “most qualified and experienced,” but her record shows those qualities have led to belligerent, unlawful military actions that are now boomeranging against U.S. interests. The intervention she insistently called for in Libya, with Obama’s foolish consent, over-rode the wiser counsel of Secretary of Defense Robert Gates (and his generals), who warned of the chaos that would follow. He was proven right, with chaotic  violence now all over Libya spilling into other African countries. This is but one example of what Bernie Sanders meant during the debates when he referenced her “poor judgement.”

The media coverage of political conventions tends to sink to the level of the circus. The PBS/NPR coverage with some half dozen reporters and two commentators proved to be thin, light, soft and superficial. Otherwise smart media communicators were reduced to very heavy focus on exactly what the Party’s manipulators wanted. “What is Hillary really like?” Of course the stage was filled with frothy admiration, awe and acclamation. But why didn’t the media point out some of the factual omissions, the contradictions to the endless sugarcoating of the nominee?

To her credit, NPR/PBS reporter, Susan Davis, did blurt out that the Convention program was mostly about personality and character with little policy. Reporters did, however, point out that unlike all other candidates, Hillary Clinton has not had a news conference since last December to showcase her supposed experience, qualifications and knowledge!

Why wouldn’t Hillary Clinton, in her attack on Donald Trump, demand the release of his tax returns? Hillary and Bill have regularly released their tax returns. Maybe because Trump would demand Hillary release her secret Wall Street transcripts of her $5,000-a-minute paid speeches to big bankers and other businesses.

To her verbal credit, Hillary Clinton raised the “unpatriotic” charge against too many U.S. corporations (not all she added) when it comes to our country. Born in the U.S.A, grown to profit on the backs of American workers, bailed out by American taxpayers and occasionally by the U.S. Marines overseas, these giant companies have no allegiance to country or community. They are, with trade agreements and other inducements, abandoning America’s workers and escaping America’s laws and taxes.

Hearing the word “unpatriotic” applied to those companies I could imagine these firms’ executives and P.R. flacks shuddering for the only time during her 55-minute address. The stigma of being “unpatriotic” to their enabling native country can have consequential legs for turning public opinion even more deeply against these monetized corporate Goliaths.

Stung by the consistently high “untrustworthy” ratings since polling started asking that question (only Trump exceeds her in most polls), she declared again that no one achieves greatness alone, that it takes us working together, that it “Takes a Village,” alluding to her earlier book. If that is true, then Together must have more power than the Few. “Together” should include workers, consumers, small taxpayers, voters and communities who are excluded from power, from the tools of democracy – electoral reforms and clean elections, more unions and cooperatives, access to justice for wrongful injuries and against crony capitalism and corporate crime and greater citizen empowerment. Does she have an agenda for a devolution of power from the few to the many so that we can be “stronger together,” (her slogan for 2016)? No way. Mum’s the word!

This immense gap has been the Clinton duo’s con job on America for many years. Sugarcoating phrases, populist flattery, getting the election over with and jumping back into the fold of the plutocracy is their customary M.O.

An anti-Hillary campaign button sums it up. Imagine a nice picture of Hillary with the words “More Wall Street” above her head and the words “More War” below her head.

Alert voters could see it coming at the Convention: the militarism for Hillary the Hawk on day four in Philadelphia and the arrival of the corporate fat cats. Or, as the New York Times headlined: “Top Donors Leave Sidelines, Checkbooks in Hand.”

The best thing Hillary Clinton has going for her is the self-destructive, unstable, unorganized, fact and truth-starved, egomaniacal, cheating, plutocratic, Donald Trump (See my column “Cheating Donald”).

That’s where our nation’s two-party political leadership is today. When will the vast left/right majority rise to take over and reverse the eviscerating policies and practices of this political duopoly?

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 























Saturday, July 30, 2016

US Home ownership at Lowest Level in Over 50 Years




























Posted on July 29, 2016 by Yves Smith

Yves here. Richter describes the consequences of turning homes into a financial asset, combined with policies that have neglected job and wage growth.  If you look at his chart, you’ll  see a rise in home ownership during the stagflationary 1970s. That was also financialization of residential real estate. Properties were an inflation hedge, while equities were flagging.

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street

Something happened on the way when the concept of “home” transmogrified to a financialized “asset class” whose price the government, the Fed, and the industry conspire to inflate into the blue sky, no matter what the consequences. And here are the consequences.

The Census Bureau, which has been tracking homeownership rates in its data series going back to 1965 on a non-seasonally adjusted basis, just reported that in the second quarter 2016, the homeownership rate dropped to 62.9%, the lowest point on record.

It matches the low point in Q1 and Q2 of 1965 when the data series began. At no time in between did it ever fall this low. And it was down half a percentage point from 63.4% a year ago.

The relentless slide has lasted for 12 years, from its peak of 69.2% in Q4 2004, which was when the Greenspan Fed’s low interest rates were boosting speculation in the housing sector, and prices were going haywire. At the time, the concept of “home” had already become an asset class that can never lose money, financialized and later shorted by Wall Street, subsidized by government agencies, and backstopped by the Fed.

And this is what happened to homeownership rates afterwards:



US-homeownership-rate-1965-2016-Q2 

The 1.9 percentage point drop from Q3 2014 (65.3%) to Q2 2015 (63.4%) was the largest two-year drop in the history of the data series. It also coincided with steep increase in home prices.

On a seasonally adjusted basis, the homeownership rate dropped to 63.1% in Q2, the lowest in the non-seasonally-adjusted data series going back to 1985.

There are numerous reasons for this, some known and others still to be guessed at, including:

Rising home prices in an economy of stagnant wages (for the lower 80%) have pushed entry-level homes out of reach for many people.
Lower priced homes in many urban areas entail a huge and costly ($ and time) commute every day. And even then, these homes may be too much of stretch for big parts of the population in expensive urban areas.
First time buyers are having trouble saving for a down payment since they spend their last available dime to meet soaring rents.
Millennials have been blamed. They always get blamed for everything. They saw their parents deal with the American Dream as it turned into the American Nightmare, and they learned their lesson early in life.
The super-low interest rate environment hasn’t made homes more affordable because home prices, in response to super-low interest rates, have soared, and in the end, mortgage payments are higher than they were before.
Higher home prices entail other costs that are higher, including taxes, brokerage fees, and insurance.

The fact that Housing Bubble 2 in most urban areas is now even more magnificent than the prior housing bubble that blew up with such fanfare, even while real incomes have stagnated for all but the top earners, is a sign that the Fed has succeeded elegantly in pumping up nearly all asset prices to achieve its “wealth effect,” come heck or high water. In this ingenious manner, it has “healed” the housing market.

It’s two-year bout of flip-flopping about raising rates just puts some lipstick on these policies that include the purchase of agency mortgage-backed securities, which the Fed continues to buy to replace those that mature and roll off its balance sheet.

Just today, as part of its routine, it acquired $2.6 billion in agency mortgage-backed securities. On July 26, it acquired $2.0 billion. On July 25, $1.9 billion; on July 22, $1.3 billion, on July 21, $2.5 billion; on July 20, $1.9 billion…. and so on.

As MBS mature and are redeemed, the Fed takes this money and goes to its primary dealers (list) and buys more of them, which puts downward pressure on mortgage rates and prevents the free market from playing any kind of role, all in the religious believe that inflating home prices beyond all recognition is somehow good for the economy and Wall Street, despite the consequences, such as plunging homeownership rates, as America turns from a country of homeowners into a country of renters, often dwelling in a corporate-owned financialized asset class.

At the luxury end, something new is hitting the housing market: Manhattan and Miami are already getting mauled. Now it’s expanding to San Francisco, Silicon Valley, Los Angeles, San Diego, even Texas! Read…  US Government Mucks up Money-Laundering in Real Estate, Puts Luxury Housing Bubbles at Risk