While I've been busy traipsing around Denver getting sunburned and meeting all sorts of interesting people, Jerry Gettinger, President of NJDC Arizona, has been observing, thinking, and writing. Here's his latest piece...
Notes: It is unedited, except for paragraph structure, and the headline is mine.
I have just returned from a trip to Cleveland, Ohio.
It concerned personal business, so I had some time to drive around the city and its suburbs. My family and I had lived in Shaker Heights in the late 70's through the early 80's so I was in a position to compare the look of the city from then to now. It was sad.
The Cleveland area has the distinction of being number one in the nation in the number of foreclosures. That's no accident. The city was especially suited to be where it is. What I saw was houses boarded-up and neighborhoods that were well-kept, having been transformed into slums. This was city of neighborhoods where the lawns were mowed and the houses were a source of pride. All that is gone.
During the apex of our country being the major manufacturing nation in the world, many eastern Europeans came to work in the steel mills and factories and make Cleveland their home.
These were hard-working people. The unions came and saw to it that they were provided a living wage, good benefits and a secure retirement. In turn, the workers bought houses, secured mortgages and worked the 25 to 30 years to pay off the loan. It was a comfortable retirement. There was the pension from the mills, medical benefits and social security. And while no became rich, neither did anyone become poor. The important aspect was that the house became debt-free and thus the retirement was secure. Pensions. medical, and a fully-paid house. Then came the loan sharks.
They promised that the homeowner could receive money for a vacation, a new car or perhaps a college education for their child. These were simple people and uneducated in the way of finance. Yes, they could have the money and in the few years the house would become more valuable and they didn't have to worry. It didn't work out that way.
The house didn't become more valuable and when it came time to begin making payments there wasn't enough money. So people who once had a secure and comfortable retirement began losing their homes. Not just a few, but many.
For the last 7 years I have heard that the best regulation is the least regulation. Well, don't tell that to the person who just lost his home. There was no one around to see to it that the sharks stayed away and the little guy was protected. I don't want to hear about less regulation. From Wall Street to the homeowner in Cleveland, there was no one around to watch the store. The business channel talks about the number of foreclosures, but not about the families that have been displaced.
Just as we went to war with too few troops, the Government ran the economy with too few watchdogs. The result in both cases was the same. Many casualties and no one to take responsibility.
I don't want to hear about the problem of too much regulation. Our financial system is in shambles. Those who had the responsibility of overseeing the economy just were not there. They had been sent home and told they were not needed. Now it's too late.
Not just to lock the barn after horse has been taken, there is no barn. It will take at least a generation to recover and, if were do avoid financial Armageddon, then let's hope that a lesson has been learned. Simply put, there has to be a referee to see to it that the game is played fairly. Or else? Well just look at "or else" as it is now.
One additional fact: the decline in home values and the number of foreclosures have just about wiped out the middle class. That part of our society has to be rebuilt.