Third World America

by Arianna Huffington

  40 At the time of the GAO report: United States Government Accountability Office, “International Taxation: Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions,” Dec. 2008, www.gao.gov.

  41 The company got billions from U.S. taxpayers: Farah Stockman, “Top Iraq Contractor Skirts US Taxes Offshore,” 6 Mar. 2008, www.bostonglobe.com.

  42 In 2008, KBR listed 10,500 Americans: Ibid.

  43 Indeed, back in 2002, to call attention: Arianna Huffington, “Tax Avoidance and a Tan: Why I’m Thinking of Moving This Column to Bermuda,” 15 May 2002, ariannaonline.huffingtonpost.com.

  44 Washington has been trying: Stephen Ohlemacher, “Obama Cracking Down on Tax Havens,” Associated Press, 4 May 2009.

  45 The latest tax-reform bills are far from perfect: Gretchen Morgenson, “Death of a Loophole, and Swiss Banks Will Mourn,” 26 Mar. 2010, www.nytimes.com.

  46 As the law stands now: Pat Garofalo, “Baucus and Orszag See ‘Growing Sense of Inevitability’ for Ending Hedge Fund Manager Tax Break,” 13 May 2010, www.thinkprogress.org.

  47 According to former labor secretary Robert Reich, in 2009: Robert Reich, “Closing Tax Loopholes for Billionaires,” 23 May 2010, www.huffingtonpost.com.

  48 Closing this outrageous loophole: Ibid.

  49 Indeed, the double standard was famously ridiculed: Tomoeh Murakami Tse, “Buffett Slams Tax System Disparities,” 27 Jun. 2007, www.washingtonpost.com.

  50 A more accurate snapshot: Nan Mooney, Not Keeping Up with Our Parents: The Decline of the Professional Middle Class (Boston: Beacon Press, 2008), 3–6.

  51 the jobless rate is almost 10 percent: Bureau of Labor Statistics, “Alternative Measures of Labor Underutilization,” 2 Apr. 2010, www.bls.gov.

  52 and twenty-six million people: Rex Nutting, “GDP to Show More Balanced Growth, Survey Says,” 29 Apr. 2010, www.marketwatch.com.

  53 Troy Renault is one of them: Laura Bassett, “Middle Class No More, Families Struggle to Fight Off Homelessness,” 4 Feb. 2010, www.huffingtonpost.com.

  54 Says Troy: “You wind up starting to think …”: Ibid.

  55 Rebecca Admire is another: Ibid.

  56 Mount Airy, North Carolina, for example: Paul Wiseman, “When the Textile Mill Goes, So Does a Way of Life,” 11 Mar. 2010, www.usatoday.com.

  57 And in Mount Airy—the city where Andy Griffith grew up: Ibid.

  58 “We were not prepared”: Ibid.

  59 By the end of 2009, the unemployment rate: Dion Hoynes, “Blacks Hit Hard by Economy’s Punch,” 24 Nov. 2009, www.washingtonpost.com.

  60 And 19.7 percent of all American men: Floyd Norris, “In Global Unemployment, a Sea of Young Faces,” 16 Apr. 2010, www.nytimes.com.

  61 “Every downturn pushes some people …”: Peter S. Goodman, “Despite Signs of Recovery, Chronic Joblessness Rises,” 20 Feb. 2010, www.nytimes.com.

  62 For a century, from the mid-1890s: Dean Baker, “The Great Recession Didn’t Have to Happen,” 25 Jan. 2010, www.cepr.net.

  63 By 2005, subprime mortgages had skyrocketed: Gene Sperling, “Subprime Market—Isolated or a Tipping Point?” 14 Mar. 2007, www.bloomberg.com.

  64 Fueling the boom was the development: Jim Puzzanghera, “Senators Grapple with Derivatives Rules in Financial Overhaul,” 19 May 2010, www.latimes.com.

  65 “The Federal Reserve Board completely failed …”: Dean Baker, “The Great Recession Didn’t Have to Happen,” 25 Jan. 2010, www.cepr.net.

  66 Even after a spate of accounting scandals: Charles W. Caolmiris and Peter J. Wallison, “Blame Fannie Mae and Congress for the Credit Mess,” 23 Sep. 2008, www.wsj.com.

  67 Between 2004 and 2007, Fannie and Freddie: Ibid.

  68 George W. Bush and the GOP also helped: George W. Bush, Second Inaugural Address, 20 Jan. 2005, http://georgewbush-whitehouse.archives.gov.

  69 By 2006, 62 percent of all new mortgages: Dan Dorfman, “Liars’ Loans Could Make Many Moan,” 20 Dec. 2006, www.nysun.com.

  70 Among the findings: Sewell Chan, “Memos Show Risky Lending at WaMu,” 12 Apr. 2010, www.nytimes.com.

  71 Enter the bankruptcy bill: Jeanne Sahadi, “President Signs Bankruptcy Bill,” 20 Apr. 2005, www.money.cnn.com.

  72 They even rejected an amendment: U.S. Senate, “S. 256, the Bankruptcy Reform Bill,” Congressional Record, 109th Cong., 1st Sess., vol. 151, no. 26, 8 Mar. 2005, www.senate.gov.

  73 According to the Institute for Financial Literacy: Institute for Financial Literacy, “2009 Annual Consumer Bankruptcy Demographics Report: The American Debtor in the Great Recession,” Jun. 2010, www.financiallit.org.

  74 The Institute’s executive director, Leslie Linfield: Leslie Linfield, in an email communication with the author, 19 May 2010.

  75 In fact, a 2009 study by researchers at Harvard: Catherine Arnst, “Study Links Medical Costs and Personal Bankruptcy,” 4 Jun. 2009, www.businessweek.com.

  76 Using that rate, roughly: American Bankruptcy Institute, “Annual Business and Nonbusiness Filings by State (2007–09),” www.abiworld.org.

  77 Here’s another: 78 percent of the so-called: Catherine Arnst, “Study Links Medical Costs and Personal Bankruptcy,” 4 Jun. 2009, www.businessweek.com.

  78 Barry Bosworth and Rosanna Smart of the Brookings Institution: Barry Bosworth and Rosanna Smart, “The Wealth of Older Americans and the Sub-Prime Debacle,” Nov. 2009, crr.bc.edu.

  79 We are facing nothing less than: Lynn Adler, “U.S. 2009 Foreclosures Shatter Record Despite Aid,” 14 Jan. 2010, www.reuters.com.

  80 and an estimated 3 million more are expected: Dan Levy, “U.S. Foreclosures May Rise to 3 Million This Year,” 14 Jan. 2010, www.bloomberg.com.

  81 Currently, mortgages are exempt from bankruptcy proceedings: Wenli Li, Michelle J. White, and Ning Zhu, “Did Bankruptcy Reform Cause Mortgage Default Rates to Rise?” Apr. 2010, www.philadelphiafed.org.

  82 Subsequent court battles eventually eliminated their use: Doris Dungey, “Just Say Yes to Cram Downs,” 7 Oct. 2007, www.calculatedriskblog.com.

  83 The banks scored a lopsided victory: Ryan Grim, “Banks Beat Homeowners: Foreclosure Bill Killed in Senate,” 31 May 2009, www.huffingtonpost.com.

  84 There had already been more than eight hundred thousand: Julianne Peitone, “Foreclosure Filings Jump 24%,” 16 Apr. 2009, www.money.cnn.com.

  85 But even after major concessions: Ryan Grim, “Banks Beat Homeowners: Foreclosure Bill Killed in Senate,” 31 May 2009, www.huffingtonpost.com.

  86 the Mortgage Bankers Association: Margaret Chadbourn, “Senate Defeats Mortgage ‘Cram-Down’ as Democrats Balk (Update 2),” 30 Apr. 2010, www.bloomberg.com.

  87 As ProPublica’s Paul Kiel reported: Paul Kiel, “Disorganization at Banks Causing Mistaken Foreclosures,” 4 May 2010, www.propublica.org.

  88 According to a study by the Brennan Center: Melanca Clark and Maggie Baron, “Foreclosures: A Crisis in Legal Representation,” Brennan Center for Justice 6 Oct. 2009, www.brennancenter.org.

  89 In New York’s Nassau County: Ibid.

  90 Having legal help can be the difference: Ibid.

  91 In 1996, the budget for the Legal Services Corporation: Ibid.

  92 At this point, to match: Ibid.

  93 The second barrier is that restrictions: Ibid.

  94 The $789 billion stimulus plan: “After the Stimulus,” 12 Feb. 2009, www.nytimes.com.

  95 Almost forty-one million homes: Pew Charitable Trusts, “Defaulting on the Dream: States Respond to America’s Foreclosure Crisis,” Apr. 2008, www.pewtrusts.org.

  96 The value of these homes: Ibid.

  97 This translates into a total property value loss: Ibid.

  98 A 1 percent increase in foreclosures: Dan Immergluck and Geoff Smith, “The Impact of Single-Family Mortgage Foreclosures on Neighborhood Crime,” Housing Studies 21, 6 (Nov. 2006): 851–66.

  99 A September 2009 New York Times story: Erik Eckholm, “Surge in Homeless Pupils Strains Scho
ols,” 5 Sep. 2009, www.nytimes.com.

  100 The National Center on Family Homelessness: National Center on Family Homelessness, “America’s Youngest Outcasts: State Report Card on Child Homelessness,” 2009, www.homelesschildrenamerica.org.

  101 San Antonio, for example, enrolled: Erik Eckholm, “Surge in Homeless Pupils Strains Schools,” 5 Sep. 2009, www.nytimes.com.

  102 homeless children are four times as likely: National Center on Family Homelessness, “Annual Report: Working to End Family Homelessness,” 2009, www.homelesschildrenamerica.org.

  103 twice as likely to have learning: National Center on Family Homelessness, “Homeless Children: America’s New Outcasts,” 1999, www.homelesschildrenamerica.org.

  104 “We see eight-year-olds telling Mom …”: Erik Eckholm, “Surge in Homeless Pupils Strains Schools,” 5 Sep. 2009, www.nytimes.com.

  105 Banks don’t want to adjust nonperforming mortgages: Melanca Clark and Maggie Baron, “Foreclosures: A Crisis in Legal Representation,” Brennan Center for Justice, 6 Oct. 2009, www.brennancenter.org.

  106 The four largest banks: “Miller, Ellison Introduce Bill to Address Conflict of Interest in Mortgage Companies,” 1 Apr. 2010, www.bradmiller.house.gov.

  107 These banks collectively hold: Mike Konczal, “Principal Writedowns and the Fake Stress Test,” 9 Mar. 2010, www.rortybomb.wordpress.com.

  108 “The banks are too big to fail”: Matthew Karnitschnig, Deborah Solomon, Liam Pleven, and Jon E. Hilsenrath, “U.S. to Take over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up,” 16 Sep. 2008, www.wsj.com.

  109 As of January 2010, U.S. consumers: Jeremy M. Simon, “Consumer Credit Card Balances Fall for 16th Straight Month,” 5 Mar. 2010, www.creditcards.com.

  110 98 percent of which is credit card debt: Ben Woolsey and Matt Schulz, “Credit Card Statistics, Industry Facts, Debt Statistics,” 13 May 2010, www.creditcards.com.

  111 There are more than 576 million credit cards: Ibid.

  112 The average credit cardholder has 3.5 cards: Ibid.

  113 “For much of America,” says Elizabeth Warren: “Elizabeth Warren on Credit Card ‘Tricks and Traps,’ ” NOW, 2 Jan. 2009, www.pbs.org.

  114 In fact, in 2007, even before the economic crisis began: National Association for the Advancement of Colored People, “Usury: The Impact of Credit Card Debt and High Interest Rates on African American Wealth,” 4 Sep. 2009, www.naacp.org.

  115 In 1958, American Express pioneered: Ben Woolsey and Matt Schulz, “Credit Card Statistics, Industry Facts, Debt Statistics,” 13 May 2010, www.creditcards.com.

  116 But the modern credit card industry: Marquette Nat. Bank v. First of Omaha Corp., 439 U.S. 299 (1978).

  117 Hoping to lure banks’ business: Robin Stein, “The Ascendancy of the Credit Card Industry,” Frontline, 23 Nov. 2004, www.pbs.org.

  118 “In 1980, the typical credit card contract …”: “Elizabeth Warren on Credit Card ‘Tricks and Traps,’ ” NOW, 2 Jan. 2009, www.pbs.org.

  119 Fees now account for 39 percent of card issuers’ revenue: Steven Gray and Michael Peltier, “Exposing the Credit-Card Fine Print,” 21 Feb. 2008, www.time.com.

  120 In fact, last year, lenders collected more than $20 billion: Robin Sidel, “Banks Roll Out New Check, Card Fees,” 2 Jan. 2010, www.wsj.com.

  121 “inactivity fee” for not using their card!: Brad Tuttle, “Credit Card Fee Watch: Now There’s a Fee for NOT Buying Stuff,” 6 Aug. 2009, www.time.com.

  122 As a result, according to CreditCards.com: Ben Woolsey and Matt Schultz, “Credit Card Statistics, Industry Facts, Debt Statistics,” 26 Mar. 2010, www.creditcards.com.

  123 Half of all college undergraduates: Ibid.

  124 According to FinAid, 66 percent of college graduates: “Student Loans,” FinAid: The Smart-Student Guide to Financial Aid, www.finaid.org.

  125 In 2008, securities backed by credit card debt: Jessica Silver-Greenberg, “The Next Meltdown: Credit-Card Debt,” 9 Oct. 2008, www.businessweek.com.

  126 could be the knockout blow: “Elizabeth Warren on Credit Card ‘Tricks and Traps,’ ” interview with David Brancaccio, NOW, 2 Jan. 2009, www.pbs.org.

  127 In March 2010, a FOX News poll found that 79 percent: Dana Blanton, “Fox News Poll: 79% Say U.S. Economy Could Collapse,” 23 Mar. 2010, www.foxnews.com.

  128 An April 2010 Gallup poll revealed: Jeffrey M. Jones, “Americans Remain Down About Their Financial Situations,” 22 Apr. 2010, www.gallup.com.

  129 And 21 percent of workers think: Dennis Jacobe, “One in Five Americans Fear Job Loss in Next 12 Months,” 23 Apr. 2010, www.gallup.com.

  130 As reported by Don Peck: Don Peck, “How a New Jobless Era Will Transform America,” Mar. 2010, www.theatlantic.com.

  131 Researchers at Rutgers University interviewed: Arthur Delaney, “Long-Term Unemployment: 80 Percent of People Jobless Last Summer Still Out of Work,” 4 May 2010, www.huffingtonpost.com.

  132 “The cushion’s completely gone”: Ibid.

  133 came word that an Oklahoma Tea Party group: Sean Murphy and Tim Talley, “Oklahoma Tea Party Plans to Form Armed Militia,” Associated Press, 12 Apr. 2010.

  134 The FBI was investigating an antigovernment extremist group: Michael Winter, “Anti-Government Group Tells Governors to Resign or Be Removed,” 2 Apr. 2010, www.usatoday.com.

  135 This followed the arrests of members: Brett Michael Dykes, “Who are the Christian Militia ‘Hutaree’ and Why Was the FBI Targeting Them?” 29 Mar. 2010, www.yahoo.com.

  136 When Tea Party members gathered for tax-day protests: Nick Wing and Jeremy Binckes, “Tea Parties Protest Tax Day 2010,” 17 Apr. 2010, www.huffingtonpost.com.

  137 Sarah Palin urged her supporters to “reload”: Ron Fournier, “Sarah Palin Tells GOP ‘Don’t Retreat—Reload’ at Southern Republican Leadership Conference,” Associated Press, 9 Apr. 2010.

  138 Michele Bachmann said she wants her constituents: Rachel Weiner, “Michele Bachmann: I Want People ‘Armed and Dangerous’ over Obama Tax Plan,” 23 Mar. 2009, www.huffingtonpost.com.

  139 According to Rage on the Right: Mark Potok, Rage on the Right: The Year in Hate and Extremism, Southern Poverty Law Center Intelligence Report No. 137, Spring 2010, www.splcenter.org.

  140 “Discontent with the present and apprehension …”: Tim Rutten, “The Winter of America’s Discontent,” 5 Feb. 2010, www.latimes.com.

  141 “There are times—they mark the danger point for a political system …”: Ian Kershaw, Hitler: A Biography (New York: W. W. Norton, 2008), 206.

  142 For example, in the 1880s, as the post–Civil War Gilded Age: Rebecca Edwards, Angels in the Machinery (New York: Oxford University Press, 1997), 111.

  143 The Chinese Exclusion Act of 1882: John Findlay, “Industrialization, Class and Race: Chinese and Anti-Chinese Movement in the Late 19th Century Northwest,” Center for the Study of the Pacific Northwest, University of Washington, 1998, www.washington.edu.

  144 One newspaperman captured the mood: Ibid.

  145 Then, as now, the agitation resulted in the formation: Richard Hofstadter, The Age of Reform (New York: Random House, 1955), 62.

  146 Conspiracy theories were rampant: Ibid., 70.

  147 during the Great Depression, the United States: Wendy Koch, “U.S. Urged to Apologize for 1930s Deportations,” 5 Apr. 2006, www.usatoday.com.

  148 In 1935, for example, many shops: Hasia R. Diner, The Jews of the United States, 1654 to 2000 (Los Angeles: University of California Press, 2004), 211.

  149 And, of course, the flames of bigotry: Social Security Administration, “Social Security History: Father Charles Coughlin,” www.ssa.gov.

  150 In 1969, Pete Hamill published: Pete Hamill, “The Revolt of the White Lower Middle Class,” New York, 14 Apr. 1969, 24–29.

  151 and 92 percent of Tea Partiers: Kate Zernike and Megan Thee-Brenan, “Poll Finds Tea Party Backers Wealthier and More Educated,” 14 Apr. 2010, www.nytimes.com.

  152 A Harris poll in March 2010:
“ ‘Wingnuts’ and President Obama,” 24 Mar. 2010, www.harrisinteractive.com.

  153 But then again, according to psychologist Michael Bader, paranoia: Michael Bader, “We Need to Have Empathy for Tea Partiers,” 5 Mar. 2010, www.psychologytoday.com.

  PART 3: AMERICA THE BEAUTIFUL DILAPIDATED

  1 George Washington knew that: Robert Fishman, “Beyond Motor City, 1808–1908–2008: National Planning for America,” 23 Jan. 2010, www.america2050.org.

  2 The nation’s overall infrastructure grade: American Society of Civil Engineers, 2009 Report Card for America’s Infrastructure, www.infrastructurereportcard.org.

  3 downward trend since 2005: American Society of Civil Engineers, 2005 Report Card for America’s Infrastructure, www.asce.org.

  4 “It’s the kind of report card you …”: Katherine Harmon, “U.S. Infrastructure Crumbling,” 28 Jan. 2009, www.scientificamerican.com.

  5 According to the ASCE: American Society of Civil Engineers, 2009 Report Card for America’s Infrastructure, www.infrastructurereportcard.org.

  6 But we’ve only budgeted $975 billion: Ibid.

  7 America’s population is expected to reach: Jeffrey Passel and D’Vera Cohn, “Immigration to Play Lead Role in Future U.S. Growth,” 11 Feb. 2008, www.pewresearch.org.

  8 We invest just 2.4 percent of gross domestic product: “The Cracks Are Showing,” 28 Jun. 2008, www.economist.com.

  9 China is busy building the most up-to-date: “Rushing on by Road, Rail and Air,” 14 Feb. 2008, www.economist.com.

  10 For example, from 2006 through 2009, China spent: Keith Bradsher, “China Sees Growth Engine in a Web of Fast Trains,” 12 Feb. 2010, www.nytimes.com.

  11 World Bank officials have described as: “Rushing on by Road, Rail and Air,” 14 Feb. 2008, www.economist.com.

  12 And by 2020 China plans to construct: Andrew Peaple, “China’s Infrastructure Still on Rails,” 3 Mar. 2010, www.wsj.com.

  13 In 2009 China built over 230,000 miles: “China’s Rural Road Length Hits 3.3 Million Kilometers; Most Villages, Towns Connected: Official,” People’s Daily Online, 22 Feb. 2010, www.english.peopledaily.com.

  14 and announced plans to build ninety-seven airports: “Rushing on by Road, Rail and Air,” 14 Feb. 2008,www.economist.com.