Nick Turse
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown. Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up — again.
Laura Gottesdiener from her alarming new article, “The Empire Strikes Back: How Wall Street Has Turned Housing Into a Dangerous Get-Rich- Quick Scheme — Again” at TomDispatch

Here, instead, is the fable we’ve been offered: Sad as it might be for some workers, towns, cities, and regions, the end of industry is the unfortunate, yet necessary, prelude to a happier future pioneered by “financial engineers.” Equipped with the mathematical and technological know-how that can turn money into more money (while bypassing the messiness of producing anything), they are our new wizards of prosperity!

Unfortunately, this uplifting tale rests on a categorical misapprehension. The ascendancy of high finance didn’t just replace an industrial heartland in the process of being gutted; it initiated that gutting and then lived off it, particularly during its formative decades. The FIRE sector, that is, not only supplanted industry, but grew at its expense — and at the expense of the high wages it used to pay and the capital that used to flow into it.

Think back to the days of junk bonds, leveraged buy-outs, megamergers and acquisitions, and asset stripping in the 1980s and 1990s. (Think, in fact, of Bain Capital.) What was getting bought and stripped and closed up supported windfall profits in high-interest-paying junk bonds. The stupendous fees and commissions that went to those “engineering” such transactions were being picked from the carcass of a century and a half of American productive capacity. The hollowing out of the United States was well under way long before anyone dreamed up the “fiscal cliff.”

For some long time now, our political economy has been driven by investment banks, hedge funds, private equity firms, real estate developers, insurance goliaths, and a whole menagerie of ancillary enterprises that service them. But high times in FIRE land have depended on the downward mobility of working people and the poor, cut adrift from more secure industrial havens and increasingly from the lifelines of public support. They have been living instead in the “pit of austerity.” Soon many more of us will join them.

America’s military is astonishingly top heavy, with 945 generals and admirals on active duty as of March 2012. That’s one flag-rank officer for every 1,500 officers and enlisted personnel. With one general for every 1,000 airmen, the Air Force is the worst offender, but the Navy and Army aren’t far behind. For example, the Army has 10 active-duty divisions — and 109 major generals to command them. Between September 2001 and April 2011, the military actually added another 93 generals and admirals to its ranks (including 37 of the three- or four-star variety). The glut extends to the ranks of full colonel (or, in the Navy, captain). The Air Force has roughly 100 active-duty combat wings — and 3,712 colonels to command them. The Navy has 285 ships — and 3,335 captains to command them. Indeed, today’s Navy has nearly as many admirals (245 as of March 2012) as ships.
pulitzerfieldnotes:

(Photo: Radha Devi Swar stands in her family compound in Ridikot, Achham, Nepal. Photo by Allison Shelley. Nepal, 2012.)
MIGRATION MEDITATION
We arrived in Achham, a distant ripple of mountains in far western Nepal, only to find everyone else heading the other way.
Dotted along the terraced hillsides are homes in the traditional style, intricately carved wooden window frames, multiple stories built of stones covered in red, brown or white earth. The ceilings are low enough for tall visitors to stoop, the walls thick enough to insulate against the nightly chill. 
Three three-story homes, one more dilapidated than the next, share a single courtyard. Stately and elegant in structure, the houses look nearly haunted now. Rounded mud corners; saplings growing through the window.
In the yard, Radha Devi Swar surveys the remnants of her family compound. She points to the first house, owned by a lawyer, the second a doctor; four brothers had lived here with their families before trickling off, one by one, to the cities. 
Radha has the wizened wrinkles of a rural working woman. Toes stained and calloused from walking in the dirt, face molded from squinting against the sun.
She walks stiffly and apologizes for the state of the house; busy caring for a dying relative, she has had no time to re-plaster. The brothers return sporadically, when the temple behind the house needs attending, but not every year. So Radha battles entropy to maintain the estate. “If no one stayed here,” she said, “it would be destroyed.”
All along the twisting footpaths of Achham, houses stand half vacant. Achhami men, and increasingly the women, seek schooling, jobs and urban luxuries somewhere—anywhere—else. They venture to the plains, the capitol, Mumbai, the Gulf.
One hill over from Radha Swar’s home, another weathered woman, also named Radha Devi, but of the Kunwar family, is preparing her own departure. “Everything is nice here, fresh vegetables, fresh water, fresh air, good food,” she says, bittersweet, “but I like Kathmandu…you can travel on a bus, you don’t have to walk everywhere.”
She too will leave her tidy courtyard, the cows, the goats, the papaya trees, the spinach fields to join her sons and husband in Kathmandu. And the homestead? The farm? “We are planning to lock the house and go.”
In its place will be another crumbling legacy of the ones who left.
-From Pulitzer Center grantees Allison Shelley and Allyn Gaestel, who are in the field in Nepal.
Image by Allison Shelley. Text by Allyn Gaestel.

pulitzerfieldnotes:

(Photo: Radha Devi Swar stands in her family compound in Ridikot, Achham, Nepal. Photo by Allison Shelley. Nepal, 2012.)

MIGRATION MEDITATION

We arrived in Achham, a distant ripple of mountains in far western Nepal, only to find everyone else heading the other way.

Dotted along the terraced hillsides are homes in the traditional style, intricately carved wooden window frames, multiple stories built of stones covered in red, brown or white earth. The ceilings are low enough for tall visitors to stoop, the walls thick enough to insulate against the nightly chill. 

Three three-story homes, one more dilapidated than the next, share a single courtyard. Stately and elegant in structure, the houses look nearly haunted now. Rounded mud corners; saplings growing through the window.

In the yard, Radha Devi Swar surveys the remnants of her family compound. She points to the first house, owned by a lawyer, the second a doctor; four brothers had lived here with their families before trickling off, one by one, to the cities. 

Radha has the wizened wrinkles of a rural working woman. Toes stained and calloused from walking in the dirt, face molded from squinting against the sun.

She walks stiffly and apologizes for the state of the house; busy caring for a dying relative, she has had no time to re-plaster. The brothers return sporadically, when the temple behind the house needs attending, but not every year. So Radha battles entropy to maintain the estate. “If no one stayed here,” she said, “it would be destroyed.”

All along the twisting footpaths of Achham, houses stand half vacant. Achhami men, and increasingly the women, seek schooling, jobs and urban luxuries somewhere—anywhere—else. They venture to the plains, the capitol, Mumbai, the Gulf.

One hill over from Radha Swar’s home, another weathered woman, also named Radha Devi, but of the Kunwar family, is preparing her own departure. “Everything is nice here, fresh vegetables, fresh water, fresh air, good food,” she says, bittersweet, “but I like Kathmandu…you can travel on a bus, you don’t have to walk everywhere.”

She too will leave her tidy courtyard, the cows, the goats, the papaya trees, the spinach fields to join her sons and husband in Kathmandu. And the homestead? The farm? “We are planning to lock the house and go.”

In its place will be another crumbling legacy of the ones who left.

-From Pulitzer Center grantees Allison Shelley and Allyn Gaestel, who are in the field in Nepal.

Image by Allison Shelley. Text by Allyn Gaestel.

pulitzerfieldnotes:

(Photo: Radha Devi Swar stands in her family compound in Ridikot, Achham, Nepal. Photo by Allison Shelley. Nepal, 2012.)
MIGRATION MEDITATION
We arrived in Achham, a distant ripple of mountains in far western Nepal, only to find everyone else heading the other way.
Dotted along the terraced hillsides are homes in the traditional style, intricately carved wooden window frames, multiple stories built of stones covered in red, brown or white earth. The ceilings are low enough for tall visitors to stoop, the walls thick enough to insulate against the nightly chill. 
Three three-story homes, one more dilapidated than the next, share a single courtyard. Stately and elegant in structure, the houses look nearly haunted now. Rounded mud corners; saplings growing through the window.
In the yard, Radha Devi Swar surveys the remnants of her family compound. She points to the first house, owned by a lawyer, the second a doctor; four brothers had lived here with their families before trickling off, one by one, to the cities. 
Radha has the wizened wrinkles of a rural working woman. Toes stained and calloused from walking in the dirt, face molded from squinting against the sun.
She walks stiffly and apologizes for the state of the house; busy caring for a dying relative, she has had no time to re-plaster. The brothers return sporadically, when the temple behind the house needs attending, but not every year. So Radha battles entropy to maintain the estate. “If no one stayed here,” she said, “it would be destroyed.”
All along the twisting footpaths of Achham, houses stand half vacant. Achhami men, and increasingly the women, seek schooling, jobs and urban luxuries somewhere—anywhere—else. They venture to the plains, the capitol, Mumbai, the Gulf.
One hill over from Radha Swar’s home, another weathered woman, also named Radha Devi, but of the Kunwar family, is preparing her own departure. “Everything is nice here, fresh vegetables, fresh water, fresh air, good food,” she says, bittersweet, “but I like Kathmandu…you can travel on a bus, you don’t have to walk everywhere.”
She too will leave her tidy courtyard, the cows, the goats, the papaya trees, the spinach fields to join her sons and husband in Kathmandu. And the homestead? The farm? “We are planning to lock the house and go.”
In its place will be another crumbling legacy of the ones who left.
-From Pulitzer Center grantees Allison Shelley and Allyn Gaestel, who are in the field in Nepal.
Image by Allison Shelley. Text by Allyn Gaestel.

pulitzerfieldnotes:

(Photo: Radha Devi Swar stands in her family compound in Ridikot, Achham, Nepal. Photo by Allison Shelley. Nepal, 2012.)

MIGRATION MEDITATION

We arrived in Achham, a distant ripple of mountains in far western Nepal, only to find everyone else heading the other way.

Dotted along the terraced hillsides are homes in the traditional style, intricately carved wooden window frames, multiple stories built of stones covered in red, brown or white earth. The ceilings are low enough for tall visitors to stoop, the walls thick enough to insulate against the nightly chill. 

Three three-story homes, one more dilapidated than the next, share a single courtyard. Stately and elegant in structure, the houses look nearly haunted now. Rounded mud corners; saplings growing through the window.

In the yard, Radha Devi Swar surveys the remnants of her family compound. She points to the first house, owned by a lawyer, the second a doctor; four brothers had lived here with their families before trickling off, one by one, to the cities. 

Radha has the wizened wrinkles of a rural working woman. Toes stained and calloused from walking in the dirt, face molded from squinting against the sun.

She walks stiffly and apologizes for the state of the house; busy caring for a dying relative, she has had no time to re-plaster. The brothers return sporadically, when the temple behind the house needs attending, but not every year. So Radha battles entropy to maintain the estate. “If no one stayed here,” she said, “it would be destroyed.”

All along the twisting footpaths of Achham, houses stand half vacant. Achhami men, and increasingly the women, seek schooling, jobs and urban luxuries somewhere—anywhere—else. They venture to the plains, the capitol, Mumbai, the Gulf.

One hill over from Radha Swar’s home, another weathered woman, also named Radha Devi, but of the Kunwar family, is preparing her own departure. “Everything is nice here, fresh vegetables, fresh water, fresh air, good food,” she says, bittersweet, “but I like Kathmandu…you can travel on a bus, you don’t have to walk everywhere.”

She too will leave her tidy courtyard, the cows, the goats, the papaya trees, the spinach fields to join her sons and husband in Kathmandu. And the homestead? The farm? “We are planning to lock the house and go.”

In its place will be another crumbling legacy of the ones who left.

-From Pulitzer Center grantees Allison Shelley and Allyn Gaestel, who are in the field in Nepal.

Image by Allison Shelley. Text by Allyn Gaestel.

“Debtpocalypse” looms. Depending on who wins out in Washington, we’re told, we will either free fall over the fiscal cliff or take a terrifying slide to the pit at the bottom. Grim as these scenarios might seem, there is something confected about the mise-en-scène, like an un-fun Playland. After all, there is no fiscal cliff, or at least there was none — until the two parties built it.

And yet the pit exists. It goes by the name of “austerity.” However, it didn’t just appear in time for the last election season or the lame-duck session of Congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. “Debtpocalypse” is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people.

Camden, New Jersey… had long been a robust, diversified small industrial city. By the early 1970s, however, its reform mayor Angelo Errichetti was describing it this way: “It looked like the Vietcong had bombed us to get even. The pride of Camden… was now a rat-infested skeleton of yesterday, a visible obscenity of urban decay. The years of neglect, slumlord exploitation, tenant abuse, government bungling, indecisive and short-sighted policy had transformed the city’s housing, business, and industrial stock into a ravaged, rat-infested cancer on a sick, old industrial city.”

That was 40 years ago and yet, today, news stories are still being written about Camden’s never-ending decline into some bottomless abyss. Consider that a measure of how long it takes to shut down a way of life.

Rates of U.S. investment in new plants, technology, and research and development began declining during the 1970s, a fall-off that only accelerated in the gilded 1980s. Manufacturing, which accounted for nearly 30% of the economy after the Second World War, had dropped to just over 10% by 2011. Since the turn of the millennium alone, 3.5 million more manufacturing jobs have vanished and 42,000 manufacturing plants were shuttered.
Laments about “the vanishing middle class” have become commonplace, and little wonder. Except for those in the top 10% of the income pyramid, everyone is on the down escalator. The United States now has the highest percentage of low-wage workers — those who earn less than two-thirds of the median wage — of any developed nation. George Carlin once mordantly quipped, “It’s called the American Dream because you have to be asleep to believe it.” Now, that joke has become our waking reality.
In the mid-1970s, Hugh Carey, then governor of New York, was already noting the hollowing out of his part of America. New York City, after all, was threatening to go bankrupt. Plenty of other cities and states across what was then known as the “Frost Belt” were in similar shape. Yankeedom, in Carey’s words, was turning into “a great national museum” where tourists could visit “the great railroad stations where the trains used to run.”