On good faith, credit, and the presidential election by gimleteye

America is exhausted from eight years of George W. Bush in the White House. The demand for change is growing, with an awareness that the skill set to deal with the manifest problems of the economy requires of a presidential candidate a lot more than faith or another round of interest rate cuts by the Federal Reserve.

The nation’s premier financial institutions are offering to discount $234 billion in debt, at 90 percent of par, to clear it from their books. We'll see if there are any takers.

What does that really mean, about the under-lying value of properties that debt represents?

That it wasn’t needed? That the market couldn’t absorb it? That it was fraudulent in the first place?

Here is what happened: over the past decade, the Growth Machine ramped up its production—of suburbs, of construction and development—and harvested the fees, commissions, and profits from selling to buyers who were either not qualified, not judicious, or just plain caught up in the speculative frenzy.

The speculative housing bubble—manifest in see-thru condo buildings in downtown Miami and bedraggled platted subdivisions in South Miami Dade—represented a massive re-distribution of wealth—putting the middle class straight in the way of liars in the mortgage industry, thieving zoning officials, and Treasury department number crunchers touting low inflation, when what they really meant was that so long as you bought a basket of goods made in China, that your standard of living was peachy.

If the massive turnout in the Iowa caucus suggests anything, it is that the public is clamoring for change. Americans will not accept a candidate whose campaign is waged on fear. Rather, it is time for a leader to emerge who can persuade Americans and Congress to follow a new course for economic growth based on more than Miracle Gro suburbs and real estate speculation.