Congressman Alan Grayson has been one of the country’s leading advocates for consumers and homeowners against the foreclosure fraud crisis. His explanation of what is happening, why it is happening, and who is responsible in the video above is one of the clearest presentations of what is happening with foreclosures I’ve seen in print or on video. A key line: “When you combine the incentive to foreclose with systematized fraud, it is rampant lawlessness.”

Paul Krugman’s column today really shows that the only structural problems that exist in our economy today are in the inability of policy makers to confront the employment crisis through bold action. Krugman writes, ” We aren’t suffering from a shortage of needed skills; we’re suffering from a lack of policy resolve. As I said, structural unemployment isn’t a real problem, it’s an excuse — a reason not to act on America’s problems at a time when action is desperately needed.” Things aren’t mystifyingly complicated – we need stimulative government spending to that is specifically designed create jobs.

Incidentally, Duncan Black has been saying for months that it’s just a matter of time before conservatives start doing what Krugman identified today – namely, saying high unemployment is structural and there is little that can be done about it, so everyone should just get comfortable for the long haul. It’s sad to see Duncan proved write.

Bank of America is trying to foreclose on a property in Florida that doesn’t even have a mortgage and was purchased for cash. Barry Ritholtz writes:

Freeze the Florida foreclosure mills. IF A COURT CAN FORECLOSE ON A HOUSE WITHOUT A MORTGAGE, THERE IS SOMETHING TERRIBLY FATALLY WRONG WITH THAT COURT SYSTEM. They are administratively incompetent, and until they demonstrate they are not renegade organized criminals (i.e., have some basic competency), they must freeze what they are doing.

No kidding.

I think this, like the Ally/GMAC foreclosure fraud that has been recently uncovered, is a good example of the dangers of a system in collapse. The banks are trying to process so many foreclosures, including in situations where it is unclear who owns the mortgage and if a foreclosure is in order, that mistakes unto criminality are surely taking place. It’s hard to believe that the titans of the finance industry are this incompetent by accident.

Dean Baker is shrill:

The first Great Depression was the result of a decade of failed policies, not a single bad mistake at its onset. There was absolutely nothing that we could have done back in September-October of 2008 that would have required that we experience a decade of double-digit unemployment. The specter of a “second great depression” is a fairy tale invented by the bank lobby to make the rest of feel good about having given them our money.

Via Atrios and Paul Krugman, this piece by Brad DeLong responding to the complaints of a lawyer making $450,000 a year and considering himself woefully working class is a must-read. It’s actually a story that rings fairly true to me as someone who works in the professional political class and knows a lot of fairly young people with no families or new families who make very good money (approaching or just above $100,000). There are lots of ways to make a lot of money and not feel rich. But just because one doesn’t feel rich – or, even worse, one has found a way to live paycheck to paycheck while making a six figure salary – doesn’t mean that you aren’t actually among the richest Americans.

DeLong writes:

Today a household at the bottom of the 1% rich households in America has an income of nearly $400,000 a year–the income of that slot in the labor market has more than doubled, while the incomes of those at the slot at the bottom of the 10% wealthy has grown by only 20% in two decades. The 900 people he knows in the 90%-99% slots have incomes that start at $110,000 a year. Compared to Henderson’s $455,000, they are barely middle class–“How can they afford cell phones?” Henderson sometimes wonders.

But he wonders rarely. He doesn’t say: “Wow! My real income is more than twice the income of somebody in this slot a generation ago! Wow! A generation ago the income of my slot was only twice that of somebody at the bottom of the 10% wealthy, and now it is 3 1/2 times as much!” For he doesn’t look down at the 99% of American households who have less income than he does. And he looks up. And when he looks up today he sees as wide a gap yawning above him as the gap between Dives and Lazarus. Mr. Henderson doesn’t look down.

Instead, Mr. Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them–widening income inequality over the past generation has excluded him from the rich who truly have money.

And this makes him sad. And angry. But, curiously enough, not angry at the senior law firm partners who extract surplus value from their associates and their clients, or angry at the financiers, but angry at… Barack Obama, who dares to suggest that the U.S. government’s funding gap should be closed partly by taxing him, and angry at the great hordes of the unwashed who will receive the Medicare, Medicaid, and Social Security payments that the government will make over the next several generations.

Do I wish that Professor Henderson had a little more self-knowledge? Yes. Is it pathetic that somebody with nine times the median household income thinks of himself as just another average Joe, just another “working American”? Yes. Do I find it embarrassing that somebody whose income is in the top 1% of American households thinks that he is not rich? Yes.

Do I hope to educate him so that he has a better grasp on reality and better understanding of America and of public policy? Yes.

As I said above, I’m not talking about people who make as much as this “embarrassing” lawyer. But that’s the point – even people who make 25% of what this person makes are still making twice as much money as the median income in the United States…which is a lot of money!

At the same time, DeLong’s diagnosis of Henderson is apt. He sees people above him with even more money, living even easier and as a result feels not only less rich (based on a lack of monthly disposable income above all expenditures which are discretionary for about 99% of Americans) but also less wealthy (based on the noticeable lack of personal butlers and in-house chefs, or something, which deprive him of the eudaemonia which he so thoroughly thinks he deserves). What Henderson never seems to ask (nor do many other people, wealthy or otherwise) is how they can change their lives to make themselves happier. I’ve been reading a lot lately about how different people find ways to do this – from owning fewer things to prioritizing spending on travel over spending on stuff to simplifying your wardrobe to having a smaller living space. How we live is a choice we make and continuing to live how we live is likewise a choice we make. If Henderson doesn’t like how he feels with only a few hundred dollars in his pocket for eating out and travel every month, then as DeLong suggests, he can stop putting significant chunks of money into his 401k, send his kids to public school and rent instead of own his home.

What’s particularly problematic with Henderson’s outrage at not considering himself rich is that he’s trying to legislate it. As DeLong points out, he identifies the President as the source of his problems. In so doing, he becomes an advocate for federal policies which will result in life likely becoming worse for the other 99% which he is not a part of — he feels a part of it because he denies being rich, but has no kinship with actual working class Americans. This is dangerous.  Like Atrios jokes, but no doubt there will be some insane conversation on CNBC or a Sunday talk show wherein the $250+ income earners will be defended by a pundit who, while a member of that class, doesn’t have a butler. Only, like Henderson, this won’t be a joke but a truly misguided attempt to set policy by those who wish they were Gordon Gecko, see themselves as a working class hero on The Deadliest Catch but are likely to be sharing a country club membership with John Boehner.

On the American Dream:

If the American economy does not function in a way that lets people who try reasonably hard obtain desired education, find fairly stable employment, obtain modest improvements in income/standard of living over the course of their lifetimes, earn enough money so that raising a family is possible, then we’re doing something wrong.

From today’s New York Times:

Being partner at Goldman is the pinnacle of Wall Street; if you make it, you are considered set for life,” said Michael Driscoll, a visiting professor at Adelphi University and a senior managing director at Bear Stearns before that firm collapsed in 2008. “To have it taken away would just be devastating to an individual. There is just no other word for it.”

The financial blow can be substantial as well. Executives stripped of partnership would retain their base salary, roughly $200,000, but their bonuses could be diminished, potentially costing them millions of dollars in a good year.

Life on Wall Street is really hard, especially with the occasional humiliation of not getting a multi-million dollar bonus or a demotion for not doing your job well.

Of course, in contrast, here’s what a hard life of work looks like for a whole lot more Americans than the 60-odd Goldman Sachs tycoons who are de-partnered every year. It comes from today’s New York Times as well and appears under the painfully obvious headline of “Retiring Later Is Hard Road for Laborers“:

At the Cooper Tire plant in Findlay, Ohio, Jack Hartley, who is 58, works a 12-hour shift assembling tires: pulling piles of rubber and lining over a drum, cutting the material with a hot knife, lifting the half-finished tire, which weighs 10 to 20 pounds, and throwing it onto a rack.

Mr. Hartley performs these steps nearly 30 times an hour, or 300 times in a shift. “The pain started about the time I was 50,” he said. “Dessert with lunch is ibuprofen. Your knees start going bad, your lower back, your elbows, your shoulders.”

He said he does not think he can last until age 66, when he will be eligible for full Social Security retirement benefits. At 62 or 65, he said, “that’s it.”

I’m sure Mr. Hartley feels deeply the pain of Goldman Sachs partners who lose their million dollar bonus and are quietly asked to move out of their office overlooking the Hudson River.