The Miami Herald investigative series, highlighting massive mortgage fraud and regulatory breakdown, triggered the resignation yesterday of the state’s top regulator for the financial industry, Don Saxton. (”Borrowers Betrayed: Florida’s top mortgage regulator steps down”, August 13, 200 On his way out the door, literally, Saxon mumbled, “I have been contemplating this since long before the series came out, so this just seemed to be the perfect timing.”

It is also perfect timing for the editorial boards to connect the dots between the failure of the Florida Office of Financial Regulation and the dominant political ideology of the past decade that abjured regulation in favor of “the free market”. This may be easier to do, now that real estate advertisement revenue from the Growth Machine has dried up.

Saxon became the state’s chief financial regulator in 2003, through a new office created by the Jeb Bush administration. In his inaugural address in January 2003, Jeb perfectly articulated the triumphant anti-regulatory theme that echoes throughout the mortgage fraud crisis in which 10,000 felons were denied the right to vote but allowed employment opportunities to defraud the public.

“As the housing boom exploded in 2001, so did the number of people rushing into the mortgage industry, with loan originators leading the way. But as their numbers rose each year — 66 a day in 2005 — so did the number of former criminals. With home sales rising more than 20 percent a year in parts of Florida, mortgage companies were hiring loan originators at an unprecedented rate, state records show. ”Back then, it was such a feeding frenzy,” said David Velazquez, 37, a former loan originator in Broward who served time in prison for drug trafficking. ‘People were saying, `We need loan originators. We’ll train you.’ It was so busy. They were pulling in anyone they could.’ In all, more than 5,300 people with criminal histories rushed into Florida’s mortgage industry as loan originators since 2000. Even for people who had five or more convictions, there were no impediments to getting in.” (Miami Herald, “Thousand with criminal records work unlicensed as loan originators”)

In an earlier part of the Herald series, Saxon claimed to have offered regulatory reform proposals to a state legislator in 2005. That legislator, state representative Scott Randolph, is the only card-carrying liberal in the Florida legislature. Giving Randolph the mission to carry new regulations to the Florida legislature was like asking a tee-toteller to advocate no beer sales on Superbowl Sunday. Randolph said, “If they were trying to stir some urgency or interest, I probably wouldn’t have been the one” to talk with.

The Herald writes, “State leaders involved in mortgage industry legislation over the past five years said they favored the new proposals, but questioned why the agency took so long to press for changes.”

The state’s editorial boards must not let the assertion go unchallenged.

Saxon was doing what his boss wanted. This is what Governor Jeb Bush said in his 2003 inaugural address; “There will be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers; as silent monuments to the time when government played a larger role than it deserved or could adequately fill.”

It would be interesting to know the row where Saxon sat, in that audience.

US Senator Mel Martinez R-FLA, former HUD Secretary, told the Herald, “”I knew we had a problem. I had no idea how bad.” Of coure, not.

Saxon was presiding over an agency that was fulfilling the mandate of the Republican Reformation: “Let 100,000 Subdivisions Bloom”. According to the Herald, “The state had the seventh-highest rate of mortgage fraud in the country in 2003. It ranked 5th in 2004, 3rd in 2005 and 1st in 2006 and 2007. By last year, one out of every five fraudulent mortgage applications filed in the United States was written in Florida, according the Mortgage Asset Research Institute, a Virginia-based industry analyst. But instead of more aggressive enforcement, state regulators actually did less. In fact, the single most effective tool they had, license revocations, declined as the fraud rate soared, records show.” (Miami Herald, “State let crooked brokers keep working”)

“We never suspected that someone could have been guilty of a felony for fraud and still have a license,” said Sen. Bill Posey, R-Rockledge, who chairs the committee that oversees the Office of Financial Regulation. You don’t know whether to laugh or cry.

At any rate, let’s hope the national newspapers’ editorial boards connect the dots for the public, if the state newspapers won’t. The Miami Herald editorial board, for instance, has been notoriously reticent from any criticism of economic interests tied to real estate development. Still, it must be obvious to the Herald board; from Al Hoffman and his bankrupt WCI Communities (Hoffman was finance chair for both campaigns of Jeb Bush and George W. Bush) to the lowest scam artist committing white collar crimes under Miami’s harsh sun, Don Saxon wasn’t a leader; he was simply following the trail of the housing boom and doing the work of a loyalist: considered as all of a piece, they amount to crimes against the state.

(Published at Counterpunch.com)  Hitler’s spin machine used the 1936 Berlin Olympic Games to show off his nation’s muscular ambition. We all know what happened next. In its opening ceremony for the 2008 Beijing Olympics, China’s leaders seemed to say to the world: never mind what has come before, ours is a new nation based on China’s own unique achievements. They did not need to say that the $40 billion invested in the Games was a rounding error from the most rapid transfer of national wealth in history; from consumer nations to China’s national treasury.

I’ve never been a fan of televised extravaganzas. They always seem filler material for events or between commercials, seeking to persuade us to buy products we can’t live without. But I suspected that the $300 million opening ceremony would be a horse of a different color.

Along with the world-wide audience estimated at 4 billion, I wasn’t disappointed. The imagination, hard work, perspiration and technology applied to coordinating 20,000 performers was astounding, even through a television set half a world away. The Bird’s Nest Stadium, the site of the opening ceremony, has redefined space for public spectacles. No further explanation was needed, how far China has evolved than the world’s largest LCD screen unfurled on stadium floor or the continuous canopy encircling the external rim of the stadium, used as a projection screen cantilevered to the audience below.

As world leaders sweltered in ordinary bleacher seats, the duration of the event reminded me of performances when China’s nationalism was expressed to visitors through interminably long, low brow movie operas of the revolution. I recall one film, broadcast for my benefit as an early Westerner to visit Shanghai, in which the entire audience of invited bureaucrats slept with their eyes wide open.

The truest note in the NBC coverage of the $300 million extravaganza came when a commentator blurted out that the synchronized movement of 2008 drummers was “a little intimidating”. It started a day earlier, when reporters on the White House press plane were delayed more than 3 hours as Chinese customs officials made a symbolic pause to “decide” how to process the visitors who would report the Games to the world.

This morose reaction was the government’s way of responding to comments by President Bush–to a small and indifferent audience en route to China– deemed to be insulting and an inappropriate meddling in China’s internal affairs.

Watching the spectacular performance, I wondered if President Bush peering through binoculars had the same feeling as me: it put America’s televised spectaculars funded by corporate advertisers– like the Superbowl– to shame. The marketing budget of many Superbowl advertisers is based on a profit model that incorporates, one way or another, low cost imports from China.

Does President Bush ever reflect how the insecurities of Americans, in respect to the economy, war and debt, is so different from what he is experiencing in China, today? The Wall Street Journal reports: “Among a huge swath of Chinese, the Games have taken on a meaning both more benign and more complex. Amid today’s prosperity, opinion polls and individual conversations show a groundswell of unbridled optimism. In many ways, the Chinese have embraced the American Dream– the belief that tomorrow will be better than today.” (”For Chinese, Olympics cap a long march up”, August 8, 200

Unlike Hitler in 1936 who was in the process of imposing imperial ambitions on the outside world, China’s political elite (as opposed to the Chinese military leadership) is most concerned with managing its own internal stressors, including a significant percentage of citizens who live in poverty.

The Beijing Olympics in 2008 does not presage some new war: in a certain sense, the impulse to war has been blunted by the peaceful transactions of globalized trade; the victor’s ascendence is measured in reverse proportion to our hollowed out industries and scattered Rust Belts. To the masses in Asia, what our falling economic tide exposes is the first fraction of our standard of living.

This mad scrambling of the world order is irreversible because the United States has failed to reformulate energy policy in response to the massive competition for natural resources and commodities like oil, no longer available in sufficient volume to protect our economic security.

The most frightening part of our passivity is that the American consumer may soon become disposable to China’s decision makers. At some point, China’s internal growth will make our contributions to its treasury a lesser factor in its decisions about securing commodities. It may already be happening.

In the past 30 years, US consumers jump started the fastest growing economy in the world. China is governed today by a political elite that fully embraces Orwellian focus on security and control. Through this set of circumstances, the sight of President Bush waving on US competitors at the Olympics can be interpreted as either a brand new day based on resurgent, grand achievements or a forced smile at a dynamo he understands better now that his own time clock is running out.

(Published at Counterpunch.com)  Miami-Dade is the most populous county in Florida, a state that has proven its electoral importance in presidential races. So, what happens in Miami bears scrutiny, in particular in respect to how voters assess responsibility for the nation’s economic ills.

Both presidential candidates, Barack Obama and John McCain, are attempting to focus the electorate’s inchoate anger through high gasoline prices. In Florida, the issue is manifesting in a decidedly desultory and misdirected way: proposals for offshore oil drilling.

For its part, Wall Street would be perfectly happy to keep the nation’s attention on gasoline prices, but the real affliction of the United States economy is debt and insolvency. Both have their roots in a housing bust draining the wealth of the nation. (”Florida’s real estate bust cost: $153 billion”, Miami Herald, August 5, 2008).

The political origins of this national economic catastrophe began in Miami. Hard to believe but true: using the deflection of Castro to animate block voters in Hispanic districts distorted public policy in service of private real estate speculators; from Section 8 housing to subdivisions in farmland, and served as a model to bring down the whole economy.

Parochial, ward politics have been practiced to perfection throughout America. But the defining feature of ward politics in most cases is leveraged in political patronage and union contracts. The Miami model had both with the addition of a new element: the manipulation of US foreign policy in service of domestic real estate speculators.

To be sure, private fortunes were being made in Florida real estate long before the waves of immigration, but it was the Latin Builders who perfected a scalable model, a model that not just used local ward politics to direct public infrastructure in service of private development but also depended on suppressing dissent by privately funding radio talk show hosts for whom hatred of Castro corralled voters into electoral cattle chutes.

Both Wall Street and the building industry grasped how the Miami model of development could proliferate throughout the fastest growing areas of the nation whose citizens didn’t care about Castro. Of the political parties, Republicans– and especially Karl Rove– understood how rapid growth of suburbs in farmland, facilitated by free market ideology that demonized “regulation” (ascribed by Miami Cuban politicians as “the hand of communism”), dovetailed with national political ambitions.

The ascendancy of two-term former governor Jeb Bush, a Miami developer before his political career materialized, and then President Bush depended on campaign contributions aggregated through builders, exemplified by Miami’s Latin Builders Association, and the supply chain maximizing profits based on platted subdivisions in farmland.

In Miami-Dade, all farmland was once Everglades wetlands. The scalability of an economic model based on real estate speculation–the one that pushed both Bush brothers to power– required a radical shift of power and authority from federal laws to the states and local regulations. During the housing boom in Florida and in Washington, DC, under control of Republican majorities, a virtual holy war was waged against rules and regulations protecting the public interest. Intense resources were applied to messaging the virtues of self-regulation, privatization, and shrinking the size of government so it could fit in a bathtub, presumably to be drowned.

In Miami-Dade and in Florida, the last phase of the housing boom added a fourth feature: new laws raising impossibly high barriers to the ability of citizens to petition their own government.

The “democracy” the Bush White House has tried to export needs to be understood through the Florida viewfinder, where the demon of regulation substituted for Castro and law denied more than 10,000 felons the right to vote but allowed them to work in the mortgage industry.

Today, US newspapers are struggling for ways to report the worst real estate crisis since the Great Depression. For the most part, news stories– filed by economic writers uncomfortable with reporting politics, or political writers uncomfortable making connections to powerful newspaper advertisers– rely on the sources and interests that caused the asset bubble and bust in the first place– production homebuilders and condo kings linked to bankers and local city and county commissioners and economists.

The Miami model of development– that steam-rollered the region’s quality of life, the environment, and sound planning for infrastructure– was built on “what the market wants” without challenge by the mainstream press. Critics received minimal coverage, as though the media were frightened off by the intensity of charges of “elitism” by developers and advertisers.

We don’t hear that, anymore. What we hear is how trillion dollars has been drained down the rathole of toxic debt from the housing bust, now backed by the US taxpayer. We don’t hear how these financial events already rained billions in fees and commissions to Wall Street bankers and will rain more, as the sale of new “rescue” packages generate more commissions and fees.

In specific, what we read today is what the blogs like eyeonmiami.blogspot.com said a year ago: that the subprime crisis had to be just the tip of an iceberg, the leading edge of an economic tsunami. “The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.” (NY Times, “Housing Lenders Fear Bigger Wave of Defaults”, August 4, 200

What we read today, in reports like the front page of the Miami Herald today, is the consequence of so much misplaced public priority in the service of real estate speculators: massive budget deficits in state and local government tied to a $153 billion loss of real estate values in Florida.

What we read are the effects: like Rudy Crew, Miami-Dade’s school superintendent–one of the top educators in the nation–, being chewed like a dog bone by school board members as though Crew himself was to blame for the $150 million shortfall in the county school budget; declining income that is the direct result of horrendous growth policies whose past profits funded political campaigns for those very same school board members who want Crew’s head.

The Herald story on the crash of real estate values quotes Broward County Property Appraiser Lori Parrish “pinning much of the blame ‘on really unscrupulous mortgage brokers’”. But blaming mortgage brokers is like blaming street corner drug runners for demand. It’s like blaming public schools for the diversion of tax dollars to school vouchers. Its like blaming gays for everything else.

What newspapers have failed to do is to link the whole bust to systemic corruption and greed wrapping up fiscal and monetary policies of the federal government with local developers who control local government. It is easy enough to see that blame starts with Wall Street bankers and firms like Merrill Lynch, whose debt has just been sold for pennies on the dollar; pennies it had to finance to boot.

But the real target of blame should be campaign contributors whose quid pro quo with elected officials was enabling real estate speculation to sound economic policies and fiduciary responsibility to taxpayers.

Consider key Bush and McCain fund raiser Al Hoffman, a central cog of the housing bust wheel, whose former company– WCI Communities– yesterday declared bankrupcy along with more than 120 subsidiaries; partnerships to aggregate, zone, and subdivide land for production homes for which a real market never existed. It was Hoffman who claimed, in 2003, that suburban sprawl was an unstoppable force.

The Herald’s penultimate word is given to Robert Parrish, president of the Florida Home Builders Association, who told Governor Charlie Crist at a business round table discussion: “We’re not getting any better… We could be getting sicker. We’re looking for the doctor.”

What the Florida builders’ spokesman means are further bailouts by taxpayers whose budgets are already stretched to the limit. With friends like Florida’s building industry, who needs enemies?

(Published at Counterpunch.com)  On the Wall Street Journal OPED page, James Grant– of the outstanding Grant’s Interest Rate Observer– writes, “Through history, outrageous financial behavior has been met with outrage. But today Wall Street’s damaging recklessness has been met with near-silence, from a too-tolerant populace.” (”Why No Outrage”, WSJ, July 19, 200

Grant is right, notwithstanding the near constant drumbeat from Counterpunch. If you live in Florida and have a sentient molecule in your brain, outrage can’t be buried too deep. Few, for instance, could have been surprised by the devastating critique in the recent Time Magazine cover story, “Florida, The Sunset State?” (Time, July 10, 2008).

Why no outrage? I suppose the best answer is that Americans have become resigned to passivity, allowing themselves to be dominated by elites in ways both subtle and dramatic.

Consider for instance how the Miami-Dade County Commission– the base layer of government in Florida’s most populous county– last week rejected out of hand, a year’s worth of effort by dedicated citizens appointed to review the Charter that guides the operations of the county. The more important recommendations had to do with tempering the extent to which local government has deformed its purpose; from protecting the health, welfare and safety of citizens and taxpayers into a permitting mill for real estate speculators. (To watch the performance of the county commission on webcast is shocking.)

There has been no shortage of outrage about the conduct of local county commissioners and a status quo as fortified as a ten foot concrete bunker in North Korea. The permanent incumbency is buttressed by a campaign finance system dominated by real estate interests– the same interests who prodded government collusion with Wall Street—whose principal accomplishment, beyond wrecking the US economy, is turning representative democracy into a charade.

On the local Miami Dade county commission, career politicians like Javier Souto regularly rant about Cuban spies and dark conspiracies but participate in an unreformable majority that is dictatorial in key respects, immune and insulated from change.

Within Miami-Dade County, there is a further example of the nested mess: the City of Homestead.

For decades, Homestead and its adjacent municipality, Florida City, represented the last outlying rural area in Southeastern Florida. Its location, adjacent to two national parks and within striking distance of Florida Bay, the coral reef, and a national marine sanctuary, made the area a principal battle ground in Florida between real estate speculators and a host of civic activists; from neighborhood groups trying to preserve their quality of life to conservationists.

A major battle in Homestead– for the future of the Homestead Air Force Base– engaged along these lines over a period of time in which the housing boom mobilized, wrapping up politics– from local yokels now moved on to run amusement parks to the 2000 candidates for the presidency of the United States. Civic activists won the Air Force base battle, highly publicized as it was, and lost the war: the area was swamped by low cost housing, ratty subdivisions.

Homestead was the pride of lobbyists, political insiders like Miami-Dade mayor Alex Penelas– the one Democrat who could have kept the 2000 presidential recount alive–and local bankers and developers from the Latin Builders Association. They shoved the subdivisions in the face of environmentalists and other “do-good’ers” and even in the midst of the housing bust, there is no sign of them stopping.

The Miami Daily Business Review reported on the carnage:</a> “One Homestead ZIP code — 33033 — leads Miami-Dade County with 263 homes in different stages of foreclosure. And 109 homes in that ZIP code have already been taken back by lenders, according to foreclosure.com. “In Homestead, 30 to 40 percent of the sales are distressed,” said David Dabby, president of the Dabby Group, a real estate advisory and valuation company in Coral Gables. “Homestead cannot recover until most of the foreclosure activity works its way through the system. At this point, we are in the middle of it.” Since 2002, almost 10,000 single-family homes, townhouses and condo units have been built, and 3,500 more are in the pipeline, including hundreds already under construction. Many are in cookie-cutter subdivisions that grew from agricultural fields east of Florida’s Turnpike near Campbell Drive.

So, where is the outrage?

Actually, there is an outstanding example of the outrage: it is a citizen’s movement to change the Florida Constitution called Florida Hometown Democracy that seeks to allow voters the choice about changes to local “growth management plans” instead of allowing real estate dominated legislatures to rubber stamp them.

The initiative is inching forward on the backs of a few highly motivated individuals who have managed to collect all but a few thousand of the 611,000 signatures necessary to qualify for a state-wide ballot. It has engendered the wrath and anger of Florida’s entire chain of interests related to real estate development, from the Chamber of Commerce to Associated Industries, from Farm Bureaus to builders throughout the state. These elites have pledged to spend “whatever it takes” to defeat the ballot initiative and made a shambles of the lawful right of citizens to petition their own government.

But aside from Sierra Club, for the most part state-wide conservation groups have shied away from joining the outrage; reading from the same laundry list of objections as the developers. That, for instance, the measure would not solve Florida’s development ‘problems’, that it wouldn’t level the playing field so much as create further opportunities for well financed insiders to bend the public interest to their will.

These examples lead to a certain refinement of James Grant’s question: there is plenty of outrage, but why so much defeatism?

Why are conservation groups so beaten down, for instance, that they cannot understand or seize the opportunity to bring these issues to a head? Why, the timidity?

The usual response: political pragmatism. Under this rubric, conservationists acquiesce to insiders deemed to be savvy enough to play the game: if there is only one seat at the table, you better grab it and you better not bite the hand that feeds you. To get along, you have to go along.

Under such rationalizations, Florida Bay—one of the most unique shallow water wilderness areas in the world—has been turned into a floating cesspool for nutrient runoff from Big Sugar, other agriculture, and cities fringing the Everglades. Macroalgae chokes the coral reef. Those are just two examples.

Under the wisdom of the prevailing elite—crystallized by former two-term Governor Jeb Bush—only a strong economy can protect the environment. But look what happened under the claims of a strong and vibrant Florida economy: thievery pure and simple.

The Daily Business Review: “Homestead homeowners — many facing foreclosure or watching the value of their houses crater— are well aware of the crisis. Ten repossessed houses sit vacant on Alex Hernandez’s tree-lined street in a new gated subdivision 31 miles south of downtown Miami. “When those houses sell, the value of my house will drop, no doubt about it,” said Hernandez, standing in the driveway of his home looking out on the for-sale signs dotting his block in Pebblebrook II.

Three months ago, an independent real estate appraiser valued his five-bedroom home at $390,000, up from the $327,000 it cost him in December 2005, he said. But he fears the foreclosed properties will wipe out the equity he had in his home, Hernandez said. Foreclosures are pushing prices down more than 50 percent of what they sold at during the height of the housing boom, said real estate broker Hagen Hendrix. He markets repossessed homes in Homestead for lenders. One of his lender clients dropped the price of a two-bedroom town house from $189,000 to $60,000, he said.”

An outstanding investigation by The Miami Herald on mortgage fraud reports, “… more than 10,000 criminals have been allowed to peddle home loans in Florida since 2000. Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud.”

10,000 criminals participating in the “free market”.

So, why are Americans defeatist in the face of the quick buck mentality that has shifted billions in wealth from the middle class to the Wall Street elite, buttressed by real estate-dominated legislatures and backed by criminals?

In large part, the corporatization of the mainstream media has deprived Americans of the dialogue and debate about the integrity of our democracy, subverted by powerful elites who co-opted executive suites of newspapers. In part, newspapers themselves have been hapless victims of a corporate conspiracy to wield advertising revenues as a way to suppress dissent.

For example, in The Miami Herald there is only one place to go for an honest reckoning of the damage done to the public interest by real estate speculators and developers: Jim Morin’s cartoons on the editorial page. What does this say?

For one, that a picture is worth a thousand words especially when you lack the courage to print the 1000 words.

Or, that outrage is funny and belongs in graphic representations, not tough reporting in a daily battle with the assorted bums, crooks and lobbyists, some of whom dress as highly paid lawyers and cloak themselves in good civic works for local hospitals, charities, and the United Way.

But the “TV made me do it” excuse, only goes so far. Our pretense of progress is sustained by a mountain of debt.

As a culture, we are immune to insanity of leverage because everyone– well, almost everyone– has been doing it. Avoiding the meaning of fiscal and economic co-dependency is perhaps the signature feature of the past decade.

Consider, for instance, it took eight years for George W. Bush to say that “our nation is addicted to oil” and to admit to the man-made costs of global warming. Yet, in both cases White House policies are marked by fierce denial, redactions, and blood in the Mideast.

Certainly, the mainstream media must play a role in reversal, or, should. But how to extract or extrapolate, when so much of society is mired in the illusion of moving forward by driving backward and looking in the rear view mirror?

The American Way, built on assets and wealth created from manufacturing, dissolved in the past thirty years to an economy feeding its own services and housing stock, based on incredible flights of debt.

From Wall Street to Main Street, our defeatism is based on the fact it has been very profitable to be passive. Since outrage is the contra-indicator of passivity, it is in very short supply.

This is the phenomenon James Grant observes: “For every dollar of equity capital, a well-financed regional bank holds perhaps $10 in loans or securities. Wall Street’s biggest broker-dealers could hardly bear to look themselves in the mirror if they didn’t extend themselves three times further. At the end of 2007, Goldman Sachs had $26 of assets for every dollar of equity. Merrill Lynch had $32, Bear Stearns $34, Morgan Stanley $33 and Lehman Brothers $31. On average, then, about $3 in equity capital per $100 of assets. “Leverage,” as the laying-on of debt is known in the trade, is the Hamburger Helper of finance. It makes a little capital go a long way, often much farther than it safely should. Managing balance sheets as highly leveraged as Wall Street’s requires a keen eye and superb judgment. The rub is that human beings err.”

And err, we have, measured by a debased currency valued in the trillions. The only ones who have gotten off scott-free are the smallest fraction of wage earners, paid in vast quantities of debased dollars.

(Published at Counterpunch.com)  Every presidential cycle, the mainstream media turns to the question of Cuba and the vote of Miami Cuban Americans, respected for the constituency’s influence on the State of Florida and national politics.and national politics. And every presidential cycle the mainstream media dutifully reports US foreign policies toward Castro as the determinant factor.

It is easy to be confused: local Spanish language radio can’t get enough of Castro. Talk show hosts run political candidates through the mill like guayabera through the roller bars of an old washer, wringing every last drop of fealty to anti-Castro passions.

But the better clue to the election preference of Cuban Americans, often voting as a bloc in municipalities like Hialeah, is not the purity of ideology so much as the source of profit that drives the bloc.

The profits that Miami’s Cuban American business elite are defending originate no where near the Malecon, but mainly at city or county hall in downtown Miami where zoning and permitting changes for platted subdivisions rule the order of day and night.

In The New York Times, David Rieff leads the wondering crowd, whether the Republican hold on Miami in the presidential and Congressional elections will change because the Bay of Pigs generation has faded away. Legitimate challengers have emerged to contest three Republican Congressional districts. (”Will Little Havana Go Blue?”, July 13, 2008, New York Times Sunday Magazine)

“Call it the Miami Spring, or Cuban-American glasnost,” Reiff writes. Catchy, yes, but not predictive of the upcoming election as the fact that the “ownership society”, conceived by Bush loyalists from Florida’s real estate developers, is now wrecked on the shoals of toxic debt, fiscal recklessness, and moral hazard.

In Miami, Castro was a useful foil both to unify the Cuban American vote and, also, to organize local government contracts according to a pecking order and hierarchy that served to control Miami’s levers of power. County contracts to supply needed infrastructure for developers goes hand-in-hand with political power: the use of public funding whether for Section 8 housing or for roads all served the same purpose.

What accounts like Rieff’s usually miss about Cuban American politics is the sophisticated manner in which exercise of power has been administered by demonization of opposition in Miami and manipulation of US foreign policy to Cuba, in Washington. Miami’s political insiders are loathe to call it, for what it is. Leaders like US Senator Bob Graham, whose political career neatly meshed with the ascendency of Miami’s Latin builders, have family fortunes tied to the model. Local journalism, like The Miami Herald, might be closer to reporting the facts except for the outsized influence of its core advertising revenue, related to production home builders in suburbs.

From mining and moving limestone, to laying tarmac and painting lines on roads, to setting telephone cables and electricity lines, to water pipes and infrastructure, all link up to platted subdivisions in Miami’s remnant farmland and Everglades.

It was called the Cuban American National Foundation, but road paving contracts linking Miami to suburbs had as much to do with US foreign policy toward Cuba as the competition to see who could outlast the other: Jorge Mas Canosa or the bearded dictator himself.

The rise of Cuban American economic power, primarily tied to the conversion of farmland to platted subdivisions, dovetailed with the economic model– suburban sprawl– that is now in shambles.

Look to NYU economist Nouriel Roubini, not David Rieff, for instruction:

“The reality is that the U.S. has invested too much – especially in the last eight years – in building its stock of wasteful housing capital (whose effect on the productivity of labor is zero) and has not invested enough in the accumulation of productive physical capital (equipment, machinery, etc.) that leads to an increase in the productivity of labor and increases long run economic growth. This financial crisis is a crisis of accumulation of too much debt – by the household sector, the government and the country – to finance the accumulation of the most useless and unproductive form of capital, housing, that provides only housing services to consumers and has zippo effect on the productivity of labor. So enough of subsidizing the accumulation of even bigger MacMansions through the tax system and the GSEs.

And these MacMansions and the broader sprawl of suburbian/exurban housing are now worth much less – in NPV terms – not only because of the housing bust and the fall in home prices but also because: a) the high oil and energy prices makes it outrageously expensive to heat those excessively big homes; b) households living in suburbian and exurban homes that are far from centers of work, business and production that are not served by public transportation are burdened with transportation costs that are becoming unsustainable given the high price of gasoline. So on top of the housing bust that will reduce home values by an average of 30% relative to peak high oil/energy prices make the same large homes in the far boonies of suburbia/exurbia worth even less – probably another 10% down – because of the cost of heating palatial MacMansions and because of the cost of traveling dozens of miles to get to work in gas guzzling SUVs. Thus, it is time to stop this destruction of national income and wealth that a cockamamie decades long policy of subsidizing the accumulation of wasteful and unproductive housing capital has caused.”

In simple terms, the crash of the economic model built on suburban sprawl– a model that organized Cuban American politics for decades– will change US foreign policy to Cuba.

Even before the crash– the most significant in Florida since The Great Depression– Cuban American leaders in Miami were hungrily eyeing profits in Cuba available to corporations from Canada, Germany, and Spain.

With municipal budgets following the housing economy down in Florida, combined with surging fuel prices and the dawning realization that Miami has become the Rust Belt of Florida, there is a perfunctory feel to business and politics as usual and a dawning awareness in Miami’s business and political elite that there will soon be more money to be made in Cuba than Miami.

District 21 Congressional candidate Raul Martinez comes closest to saying so, buried deep in the NY Times report: “There is a fear in this community,” he said as we sat together in the living room of his home in Hialeah, “that if you speak out, then bad things will happen. I think that, in particular, businesspeople have been afraid of being denounced on talk radio or not getting contracts because they are too ‘controversial.’ ” This has now changed, he said, and the change is real, though he added, laughing, “It’s just that no one wanted to be the first person to call for it.”

“No one wanted to be the first person to call for it” is disinformation: reasonable Americans and even some Cuban Americans have blasted the failures of US foreign policy toward Cuba and called for change.

But Martinez is correct on the main part: the pecking order of the economic elite in Miami is determined by ways government contracts are ordered, parceled out and assigned. No one knows this better than Martinez, who served one of the region’s largest and politically influential municipalities–Hialeah–as a charismatic mayor and blood brother to Miami’s Latin builders.

More than any other political figure, Martinez understands the use of Spanish language radio as a codex for elections. It is the businesspeople who fund Spanish language radio– and the interminable flow of talk piling code on code, mostly related to Castro.

The “contracts” that people are afraid of “not getting” are really to the point: contracts from everything from Miami International Airport, to low income housing, to contracts for roadway and construction in Miami.

The wasteful and unproductive housing capital that Roubini describes as the root of massive jeopardy to the national economy is what made Cuban American developers and lobbyists like Sergio Pino into centimillionaires. Behind Pino is a whole train of decamillionaires, and behind the decamillionaires, the solomillionaires clawing their way onto the ladder of zoning changes in farmland and open space.

Some of Miami’s Latin builders fiercely love Cuba, nursing terrible personal, family tragedies, many wish longingly for the day they can return: but they do not imagine their return exclusively as children whose birthright was stolen, or even as revenge for distant crimes: the Miami Cuban political elite see their return to Cuba as triumphants who managed US foreign policy to Cuba for decades, not based on influence with a national audience in place like North Dakota so much as with the supply chain of builders, developers and speculators in Florida wetlands.

That is where the power was, right up to the present moment.

But there is a change in Cuba, as well, that must be registering on Miami’s Cuban American power elite: ordinary Cubans want economic opportunity, that’s clear enough. But for the most part, their reverence of Cuba and of their own leadership is a rejection of the Miami model of governance.

Cubans love Miamians but they do not for the main part love Miami. They want economic growth and opportunity but conflicted about the cost of absorbing a Miami power structure in foreclosure.

There is very little difference between the red and the blue model of Cuban American politics, except that Republican incumbents have boxed themselves in tighter than their Democratic challengers.

Now that the building boom is fully discredited, a boom that Cuban American developers substantially helped to foment in Tallahassee, Florida and Washington DC, change in US foreign policy to Cuba is beginning to carry the stamp of economic imperative.

It is time to move on, the old fashioned way in a new direction. As history would have it–because George W. Bush has made such a hash of the economy– in Miami the Democrats and Barack Obama will get there, first.

(Published at Counterpunch.com)  Key Biscayne’s high-flying hedge fund operator, John Devaney, once called “The King of Liquidity,” has crashed and burned.

I’ve been gawking at the Devaney hedge fund wreck for a long time. The festive charitable giving to needy causes (inoculation from scrutiny by the mainstream press). The entertaining of then Senate majority leader Bill Frist and other luminaries. The mysteries of making a few hundred million trading asset backed securities formed from junk aka “the ownership society.”

That turns out to be one of the signature phenomenon of the current market cycle that shows no signs of bottoming yet: what an excruciatingly long time it is taking to play out.

A year ago, the media began reporting the troubles afflicting the Key Biscayne hedge fund king: “A Miami-based hedge fund titan with a taste for the high life is getting a harsh lesson in humility as his fund racks up losses in the bond-market rout. … The fund’s portfolios are now said to be worth around $460 million, down from about $620 million.”  (New York Post, August 2, 2007)

But according to The Miami Herald, “On Thursday, Devaney said the fund had lost about 90 percent of its value by September 2007.” (Miami Herald, July 11, 200

So, which was it?  A year ago, was Devaney lying or not? 

Investors are suddenly realizing that down markets are an especially bad time to question whether there is any difference between fraud, theft, and a worthless investment portfolio with John Devaney.

With hedge funds, there is no penalty for misrepresentation unless it is outright fraud and theft. The US Congress and White House have repeatedly blocked efforts to hold hedge funds to the same degree of accountability as other fiduciary agents.

Most mutual fund owners don’t have a clue how John Devaney made enough millions to hang Matisses on the walls of his Key Biscayne home. But they should, because what John Devaney does (did) along with 10,000 hedge funds is shaking the foundations of the world financial system.

It is no surprise that hedge fund risk is manifesting in the collapsed fortunes of a Miami trader. The political origins of the housing boom–that many hedge funds fed from– are right here, twined like a golden thread in the chain of campaign contributions links builders, lobbyists land speculators and Wall Street– still freely circulating and immune to criticism by the media.

If you are looking for particular scoundrels, start with key McCain economic advisor former Senator Phil Gramm, now vice chairman of the Swiss bank UBS, who helped speed the deregulation of the financial industries and who just lashed out at Americans as “a nation of whiners”.

That clunker dropped at the same moment Miami production homebuilders, like beleagured Lennar, and lobbyists like Sergio Pino and Rodney Barreto–Miami’s local power brokers– are begging for government bailouts of their own cratering investments in land outside the Urban Development Boundary.

“Help us, help us,” they cry, expecting their pockets to be lined by insider deals from big infrastructure “economic rescue plans”, including new zoning changes to put more sprawl in western suburbs edging the Everglades.

Never mind that the last tranche of buyers flushed out like dove, long ago, or, that critics used to be called “elitists”, who complained about the costs of unsustainable growth. You don’t hear that, anymore. But you also don’t hear the history of what happened, or, most any other relevant news except iterations of the spin machine. 

Look no further of reason for investors shunning the US dollar.

Yesterday, the Herald reported: “Devaney himself has lost more than $100 million, he said. His losses amount to about half his net worth, he added. But he still has a 126-foot yacht, the Dorothy Ann — a present to his mother — moored behind his Key Biscayne home.” Devaney will never be forced out of his home like those foreclosed from ranch-style American dream homes sold by Lennar or Pino or Barreto.

Like Pino or Barreto, Devaney’s assets are happily shielded by laws and regulations they condemn when it comes to the accumulation of wealth in free markets, like inserting platted subdivisions in wetlands or polluting public lands with stormwater runoff into the Everglades.

It’s just the case that the pockets of wealth are drying down, like Everglades ponding in dry season. In a perverse way, that makes it easier for observers to see what is in them, or, what is just pretending to be there.

(Published at Counterpunch.com)  The past few days I’ve been thinking about Dr. James Speth’s call for “civic unreasonableness” and NASA’s Dr. James Hansen’s appeal for scientists to drop “objectivity” from muting their involvement, communicating to the public the impacts of global warming.

Of the canaries in the climate change coal mine, the coral reef is one of the most visible. A listserve for coral reef scientists and professionals is buzzing with comments that US government agencies and scientists have chosen to downplay, or to play only as politically acceptable, the devastation to coral reefs in Florida.

“The reef is for all practical purposes dead and a phase shift to an algal reef with soft corals has occurred.” This observation, between Florida Keys conservation activists who have spent decades in the effort to protect natural resources and the Keys coral reef tract, was made in response to ongoing, testy exchanges on the listserve reaching an international audience.

A commercial fisherman in the Keys commented: “… the reef continues to decline and NOAA (National Oceanic and Atmospheric Administration) continues to congratulate its self and give awards to others for a job well done! .. I don’t think anyone questions the passion of many of the sanctuary volunteers or SAC (sanctuary advisory committee) members, but what are they actually accomplishing? The coral continues to die off at an unprecedented rate along with the continued water quality degradation. That is not cause for celebration. Yet, the awards and self congratulations continue. The danger in this approach to management is that it attempts to make the public feel that all is well…”

And it is not just the Keys coral reef. Florida Bay is a catastrophe, obliterated by serial algae blooms passing through hundreds of square miles of shallow water like toxic clouds, yet many scientists are still picking at the scabs of scientific arguments decades old; unwilling to engage the politics of water pollution and the special interests who are offended.

Well, some say, scientists must not engage in politics.

In a statement released as part of the International Coral Reef Symposium, a gathering of hundreds of scientists and policy makers from around the world who are meeting this week in Fort Lauderdale, NOAA reports: “… nearly half of coral reef ecosystems in the United States are in poor or barely passable condition. “This is absolutely a call to action,” said NOAA Coral Program director Kacky Andrews.”

But some on the coral reef listserve angrily dismiss repetitive “calls to action” when so little has been done to stop the flood of pollution, nutrients and other human impacts on Florida Bay and the coral reef tract. They say, also, that the incessant drumbeat of the past thirty years — more science is needed– is wasted noise.

Of hundreds of thousands of human generations, ours is the first one to witness the loss of so much of the natural world. It is such a simple and remarkable point.

There is a larger context and urgency for this debate on coral reefs: the issue is no longer hard corals or soft corals or even macroalgae suffocating the base of the ocean’s food chain: it is whether or own species can avoid mass die-offs as a result of the unchallenged rise of carbon emissions to levels the planet has not experienced for tens of millions of years.

(Published at Counterpunch.com)  The British sitcom, “Upstairs Downstairs” was a comedy of manners, of the rich and their servants, which is come to think of it, how the Federal Reserve and Wall Street’s stylized dialogue on inflation will appear to historians, in retrospect.

Over the past decade we’ve had Wall Street wagging its tail to the Fed’s “growth recession”, “low” inflation, we’ve had “worries about higher inflation”. Meanwhile, Americans in the vast majority are noticeably poorer.

It is not just the pocket book: it is also quality of life. The growth economy based on suburban sprawl–now flat on its face–has been a nation killer, sold like tobacco or sugar as ‘what the market wants’.

But, always, the bottom line is the pocketbook. And there, the incredibly narrow bandwidth on government propaganda on inflation, and the timidity of most economists, Americans for the most part have meekly bought into the rosy scenarios.

Americans on fixed incomes, though, may wonder indeed if they have been inflicted with an unreported kind of disease–because inflation to them has been real and rampant.

“Thanks to 20 years of inflation, $1 million today has just 54% of the purchasing power of $1 million in 1987.” (from The Wall Street Journal, Jonathan Clements, June 27, 2007)

Bingo.

Countless Americans responded to the pressure of inflation, emptied of meaning and relevance by government statistics, by investing far more in housing than historical precedent or reason would prudently allocate.

When a significant percentage of the nation’s homeowners are investing 40 to 50 percent of disposable income on housing, and home values have fallen 30 percent off purchase prices (as they are, in the nation’s most overheated areas), who needs an exogenous shock to threaten the economy?

Until 2005, real and unreported inflation was matched by consumers of mortgages in housing, matching inflation with inflation, sucking up many purchasers of subprime mortgages, but also, hard working middle and upper middle class.

As paper value of individual investments in housing went up, up, up, the real value of mortgages packaged and sliced into financial derivatives disappeared into pension funds, insurance pools, and hedge funds providing leverage for even more speculative investments.

Today there is a slow motion earthquake trembling through markets for financial derivatives, whose cumulative float is approximately ten times the value of stocks traded on public exchanges in the US.

It doesn’t matter whose liquidity is keeping US stock markets uplifted or high: it is an entirely different scene down in the boiler rooms where government economists and statisticians and Fed board members are keeping the engines running: the denial is remarkable.

The picture is similar to the one painted by Nicolas Kristof in his editorial on the victims of climate change, in the New York Times yesterday.

Kristof, who writes frequently on the planet’s most destitute–not the environment–reports that tens of millions of Africans and Asians are already on the march because of global warming that has wrecked substinence farming.

Think of American buyers of subprime mortgages who are now in default as the homeowner equivalent of climate change victims.

Kristof makes the mistake, in his editorial, of suggesting that wealthier nations like those in the industrial West can withstand the impacts of climate change.

To extend the metaphor, as financial markets are doing, mortgage holders with better credit, ie. the middle class and upper middle class, are not going to be sucked into the same problems afflicting subprime borrowers.

But there is no evidence whatsoever that the United States is insulated from the impacts of climate change, any more than purchasers of A rated mortgage credit are insulated from the troubles afflicting subprime buyers.

It is just taking a little longer. It is just a matter of time before blue-chip mortgage holders find themselves going up, the down staircase.

Noriel Roubini puts meat to these bones. In his June 27th blog, Roubini wrote:

“The fallout of this CDO mess is likely to end up into $100 billion plus of losses for banks, financial institutions, hedge funds and investors once these CDOs and subprime mortgage backed securities are marked-to-market rather than being marked-to-a-delusional - misrated-model. Thus, the Bear disaster is only the tip of the iceberg of a much bigger financial mess that will unravel in the next few months: the pile of rising subprime and nearprime delinquencies will take a toll on the toxic waste of mortgage backed securities that a rating “voodoo magic” pretended to turn below-junk securities into A-rated ones. “

No wonder that all these lousy news about housing and gasoline prices sky high have depressed the US consumer with consumer confidence now significantly down. And no wonder that the latest news from retail sales are also lousy. As reported by the International Council of Shopping Centers and UBS in the last two reporting week same store chain store sales have been down (-0.7% in the last week) while the year-over-year growth rate of such sales is now down to 1.7% (i.e. falling in real terms relative to a year ago). Add to that a 2.8% fall in durable goods orders for May and a survey of major CFOs suggesting that they are planning to cut capex spending and accumulate less inventories.

” … subprime delinquencies rising and the credit crunch in the subprime market getting worse. The delinquency rate for subprime mortgages increased to 13.8% in Q1, according to the MBA, up from the already high 11.5% a year before….near-prime delinquencies are rising sharply: late payments of at least 90 days and defaults on 2006 mortgages have increased to 4.21 percent, up from 1.59 percent for 2005 mortgages and 0.81 percent for 2004 mortgages, as reported by S&P. So the subprime carnage is now spreading to near prime mortgages.”

So far, the mainstream media is meekly parroting government statistics and tracking the paw prints of big financial houses, like Bear Stearns, stuck in the tar pits of the subprime mortgage mess.

And it is interesting what is happening on the ground, too, in places like Florida where reams of ink have been devoted to the costs afflicting homeowners from insurance and property taxes–including a much trumpeted special legislative session in Tallahassee to deal with the crises–when suddenly, as though out of the blue, yesterday’s news is that tax receipts state-wide are anticipated to fall at least $1 billion.

The building and construction lobby has been flailing at the promise of tax cuts, as though tax cuts could revive the sharp declines in housing markets. Well, no: not if Florida suddenly finds itself a billion short in tax revenues toward a budget that has already been paired to the bone.

In Miami, you would think there would be some public discussion, as the builders lobby comes calling for new zoning and building permits to plow more suburban sprawl and more condo towers.

But there is not a single elected official (OK, maybe one or two) who will raise the question, why have local legislatures turned into rubber stamps for ill-advised development?

Conceivably, it will take a financial meltdown to knock some reason in their heads: that would be just about the same as Congress and the White House waiting until sea level rise, or, the nation’s breadbasket burns up in extreme summer heat before mandates to compel industries to sharply reduce carbon dioxide and greenhouse gas emissions.

Everyone wants things to be the way they used to be, just a few years ago, when the formula for riches and political power was simply twinned by campaign contributions wrapped around votes for residential zoning.

In a Florida Association of Realtors press release, on June 25th, “Harry Millsaps, president of the Emerald Coast Association of Realtos and a Realtor with Prudential Coastal Propertie Inc., says that the area’s economy remains strong and home sales are returning to a more normal pace.” But in Miami and Orlando, year-to-year homes sales for May decreased 44 and 40 percent respectively. Tampa-St. Petersburg-Clearwater decreased 42 percent. And state-wide, down 34 percent.

In a Wall Street Journal report, on June 26th, Michael Corkery wrote, “Many analysts believe home supplies will decrease and prices will stabilize, only after builders shed their unwanted land.”

But in Miami-Dade the production home builders and land speculators are still jumping up and down, burning through their cash, and the commissioners are nodding in syncopating rhythm: we need zoning changes and building approvals because more people are coming in to Miami and Florida.

Not now.

All but one of nine Miami-Dade school districts are losing students, a perceptible annual rate on the order of five to ten percent. This is news roundly ignored by Miami city and county commissions.

People are moving, although it hasn’t risen to the threshold of Africans fleeing an angry, unrelenting climate. In Miami, the hissing from the housing bubble bursting is perceptible.

As bad as the decline in school enrollments may be, it is still considerably less than the number of Miami homeowners in the clutch of mortgages they may not be able to afford for much longer, residents who would like to move to less expensive locales and are keeping their kids in public schools, holding on and praying for housing values to reverse.

A more likely scenario that improvement in housing values, though, is that the federal government gradually admits to the inflation that has been rampant in the economy, though unacknowledged.

Could it be that prices will be allowed to rise all around the housing bubble, swallowing inflated values in a dollar worth even less than it is, today? There is no humor, in that.

(Published at Counterpunch.com)  No, Americans aren’t going to trust Republicans on the expansion of offshore oil drilling to lower the price of gasoline. Just add this to the long list of errors, missteps and miscalculations reflected in the recent AP-Ipsos poll: “When other surveys are taken into account, the general level of pessimism is the worst in almost 30 years.”

In Rassmussen Reports, Dick Morris writes the McCain has outflanked Obama “big time”. “His call yesterday for offshore oil drilling—and Bush’s decision to press the issue in Congress—puts the Democrats in the position of advocating the wear-your-sweater policies that made Jimmy Carter unpopular.”

Morris is dead wrong.

The complacency of the American voter has been shaken and jarred by the thievery and lying of the party of presumptive fiscal conservatism, and there is going to be hell to pay in November.

It doesn’t matter what Republicans say, at this point. After the worst presidency in modern US history, there is no where for Republicans to hide and certainly not in the premise that American oil companies can rescue consumers either from the cost of gasoline or climate change.

It is not just wars waged on false pretenses and the squandering of American treasure, or jobs floating away to low-cost labor nations. It is not just that corporate America derives ever greater percentages of profits from overseas operations, or, the cratering dollar and collapsing home values, or, declining standards for worker safety, inspections for food safety and public health, or, the terrible costs of extreme weather.

The right-wing spin machine is busted.

AP reports, “Those who said the country was on the wrong track totaled 76 percent of the people contacted in the survey, which was taken from June 12-16. That’s up from 71 percent in April and 66 percent near the end of 2007.” You can roll up Rush Limbaugh, Bill O’Reilly and the rest: the American people aren’t buying what they are selling. Period.

The problem is captured in the slow motion train wreck of the nation’s credit markets. People are putting two and two together, finally: the ruined landscape of suburban America and the “ownership society” (remember, that promise?) is based on Wall Street greed and manipulation whose dimensions are more staggeringly clear, with each passing week.

The Wall Street Journal reports Former Goldman Sachs chairman and current US Secretary of the Treasury Henry Paulson is going to call for “quick regulatory changes to the oversight of financial markets, including expanding the role of the Federal Reserve.” (June 19, 2008, “Paulson to call for new Fed role”)

“We must dramatically expand our attention to the fundamental needs of our system, and move much more quickly to update our regulatory structure always keeping in mind that there must be a balance between market discipline and market oversight,” Paulson is expected to say, today.

And that is the issue with the Republicans, across a wide spectrum of policy issues including energy and the environment: they talk “balance” and they practice extremism.

They talk “market discipline” as they loot our treasure. How else to interpret the bailout of Bear Stearns or the Federal Reserve allowing banks to pledge toxic debt as collateral for their further borrowing to shore up fictitious capital ratios and solvency? The people who created this mess were not “tax and spend liberals”: they were dark suited, patent-leathered Republicans preaching “compassionate conservatism” and delivering neither.

In a New York Times news analysis (“$4 gasoline and the $64 dollar question”, July 19th, 2008), Robin West, an energy consultant and former Reagan energy department appointee, “argues that additional supply could make a difference in price, especially if domestic drilling were coupled with aggressive conservation efforts. He said it would take time, though—a minimum of five or six years, even if drilling were to begin today.”

There’s that “balance”, again. What are the chances that the John McCain will deliver “aggressive conservation”?

In South Florida, we have our own model for the failed Republican “balance”: it is etched all over the landscape with low density, sprawl housing far from places of work—imposing costs on transportation, infrastructure, and the environment that conservationists bitterly protested for decades.

The way that was supposed to “solve” the balance between development and wetlands, between inner city residents and wealthier constituents was to be called “Eastward Ho!”. It was a bipartisan concept devised more than a decade ago, in furtherance of development closer to the urban core, to provide for growth without putting unsustainable costs on taxpayers.

As a Republican-dominated executive and legislative branch prevailed in the intervening years, what emerged in Florida from “Eastward Ho!” was nothing like the bipartisan consenus: it was a mad rush, lead by the likes of top Bush and McCain campaign fundraiser, Al Hoffman, to build condos and suburbs like there was no tomorrow.

It was all and everything, and it was based on the massive and unsupervised leverage of toxic debt that made insiders rich and most people plain poorer.

As a result, the US economy is running on fumes. And John McCain—in his gambit to support offshore oil drilling—is breathing the same air as the Bush White House.

People don’t want the spin, and don’t believe it any more. “For the average American, everything’s going wrong. I think there’s a lot of reasons for households to be pessimistic. I think things have gotten tougher for most,” Mark Zandi, chief economist for Moody’s Economy.com told the Associated Press.

Expansion of offshore oil drilling would be the fulfillment of Big Oil’s mission, expressed in secret meetings with Vice President Dick Cheney’s Energy Task Force in early 2001. No doubt, in the insulated corridors of power and influence, there is nothing wrong with this latest electoral ploy: one more turn at the roulette wheel.

The bottom line is that Americans are simply fed up with the risks and the gamblers in Republican ranks who always seem to get free passes to play with house money. It is not the way Americans do their home accounting.

There are undercurrents of revulsion and anger against the right-wing spin machine and the Republican candidates it represents. The premise that offshore drilling for oil will lower prices at the pump is no more credible than using weapons of mass destruction as a rationale for war in Iraq.

The window is shut to Republicans in this presidential election cycle, through no one’s fault but their own.

Today, the New York Times reports that Christopher J. Ward, former Treasurer, stole $725,000 from The National Republican Congressional Committee. “The thefts are both embarrassing and painful for the committee, which has been struggling to raise money for what is expected to be a tough year …”

Now, where would a senior Republican campaign official get the idea that it was OK to steal $725,000?

Well, for one: it is a tough time to be a Republican. You have to talk fiscal conservatism while nothing around you vaguely resembles it.

When George W. Bush came to office, he pledged an orderly White House, not like Clinton’s whose staff walked away from the Executive Office Building having removed the W key from a bunch of keyboards and assorted mischief. A 2002 GAO report totaled the damage estimate at about $20,000.

But grifting $725,000, from your own Republican Party? Maybe Mr. Ward thought it was a drop in the bucket and no one would notice, like the $800 million missing in Iraq of taxpayer money we sent there in George W. Bush’s war, or the $7 billion no-bid contract to Halliburton as a result, the company Vice President Dick Cheney ran back in the day.

After all, Mr. Ward likely read the same news reports that we did, about Halliburton overcharging the Pentagon for fuel deliveries into Iraq.

A recent BBC investigation has estimated the amount of money stolen, lost or not properly accounted for in Iraq as high as $23 billion.

In a 60 Minutes broadcast, the former Iraqi Finance Minister Ali Allawi said “most of the money simply disappeared.”

In the United States, top financial executives of Wall Street firms—99 percent Republican—are walking away from billions of losses and pocketing hundreds of millions in compensation on the way out the door. The next thing you know, oil smuggling in Iraq will cost the Iraqi government billions of dollars and fund the insurgency.

In case you haven’t been paying attention: that is happening, too.

Under such conditions of moral hazard, why wouldn’t Christopher J. Ward look at his little piece of the pie as a rounding error to “remodel and pay the mortgage on his home in Bethesda, MD.” I’m not saying this is what Mr. Ward felt, but God: when the dog is messing up the living room furniture and you’re only making $120,000 and you’re treasure for the President’s Dinner Committee, “the party’s biggest annual fund-raising event”, but paid only $10,000 for your trouble. Well, enough is enough. Yes we can!

It’s tough being a poor Republican.