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[Read directly on Panajournal.com]

by Jennie M. Xue

PanaJournal – Behind its wealthy facade, the so-called “Land of Opportunities” isn’t quite like so to many Americans. The 2008 economic downturn has left many families and individuals, including children, homeless and hungry.

TODAY, more than six years later when the country’s economy is already growing at 3.5 to 4 percent, the casualties can still be felt. Although not all homeless and hungry individuals are “victims” of the recent crisis, using this framework helps in understanding the issue with clarity.

Approximately 3.5 million people in the United States are homeless today, while at the same time 18.6 million houses are vacant. Isn’t it amazing to think that for every homeless person in USA, there are six vacant homes? If the houses were given away to homeless individuals with “one person gets one house” scenario, there would still be 15 million vacant ones.

Foreclosure crisis, which resulted from failed economic policies, and homelessness are on-going nagging problems that shouldn’t have existed in the first place, provided that US economic policies had been designed and developed to cater to the very basic needs of American people.

Alas, capitalism has reached its lowest point. It has become a vulture, a hyena, a corpse-eating cannibal. What a stark reality.

First things first, what caused the economic downturn that started in 2007/2008? There are no simple answers. Let’s identify the involved parties in this chaos before we go into details of the devastating impacts.

There were US Federal Reserve, big banks, Wall Street financial product engineers, and investment banks-cum-commercial banks. Wrap them in a blanket of naive consumers with herding mentality who were sold on the idea of “homeownership” and “your home is your ATM.” The “homeownership euphoria” was made even worse by a statement by George W. Bush stating that “every American must have a home.”

A multi-dimensional problem indeed.

In short, the economic downturn was triggered by failed economic policies, which was approved due to lobbies by big banks like Citibank, and was made widely spread by euphoria triggered by naive mindset of “your home is an investment” instead of “a home is a financial liability.” A presidential statement supporting “owning a piece of American Dream” was the icing on the cake.

The Glass-Steagall Act of 1933, which was intended to keep investment banks separate from commercial banks for the sake of American economic recovery from the devastating effects of The Great Depression in the 1930s, was repealed during Bill Clinton Administration in 1999 with The Gramm-Leach-Bliley Act of 1999.

Yes, it was Clinton Administration who repealed it. Not the Republicans. It’s a fact that most democrats might not find favorable. But it was a fact nonetheless and we have to accept it as it is.

The Gramm-Leach-Bliley Act allowed the consolidation of investment banks and commercials, which meant allowing retail banks and other financial institutions to create financial products intended for retail customers (you and me) that would be re-packaged and sold as “investment products” by their investment banking arm in Wall Street. One arm of Bank X would create easy-to-sell financial products just to get naive consumers to buy them, while the other arm would create easy-to-sell investment products to Wall Street investors. And those banks made gazillions from the transactions. How convenient.

The most appalling part of this “re-packaging” of home mortgages, which were mostly “creative loans” due to ease in obtaining credit with minimal income documentation, was the leveraging of up to 70 times by the investment banks. In layman words, your homeownership debt was re-packaged as CDO (collaterized debt obligation) and “guaranteed” by “pseudo insurance” CDS (credit default swap) to be sold 70 times at Wall Street. Imagine your US$250,000 home loan was sold and resold again as “investment package” to Wall Street investors 70 times over, making it worth US$17,500,000 on paper.

Along with 18 million other homeowners who had lost their properties, as one of “victimized” homeowners, I educated myself on the root causes of 2007/2008 US economic downturn so I could better use macroeconomics data in analyzing the current state of economy and how it would influence my personal finances in the future. I think, many “victims” have learned their lessons and become more aware consumers of financial policies since then.

This also explains my involvement in advocating for fair housing and anti-foreclosure that would benefit all Americans and citizens of the world. At least, it is an honor and a privilege to educate the whole world about the perils of some financial policies and loan and investments packages, regardless of their short-term advantages.

Second, are all homeless individuals victims of the economic downturn and current slow economic growth? The quick answer is: no.

People became homeless for various reasons. Having a home foreclosed might not directly result in homelessness, as long as the individual has sufficient income to support themselves and to rent apartments. However, every individual is different and some individuals are more fragile psychologically and emotionally. I have heard homeowners who killed themselves after losing their hard-earned properties. They were rare but did occur.

Thus, it is safe to assume that many homeless and hungry individuals are direct and indirect victims of the recent economic crisis.

The most inexpensive living arrangement is renting a room in someone’s house, like what foreign students and fresh graduates have been doing. It only costs a fraction of a full-fledged apartment unit, which should have been affordable to most working people. This, of course, might not apply in “hot bed” of booming economic bubbles, like in Silicon Valley in San Francisco Bay Area and in “oil boomtowns” in North Dakota, where a one-bedroom apartment may cost US$3,000 per month.

Unemployment, underemployment, mental and physical health conditions have been the primary reasons of homelessness, which are universally valid. Some of the most chronically homeless individuals are those with mental illnesses, including drug addiction and untreated depression, schizophrenia, and psychosis.

Combined with American culture that glorifies “being independent” away from your relatives, it is understandable that USA is a land of homelessness. Compared to Asian cultures, in which staying with your relatives —including parents, grandparents, and siblings— despite employment and adult-age statuses, Americans are more reluctant to seek help from relatives. This may contribute to the high rate of homelessness.

Third, who are those homeless individuals, demographically speaking? Unlike in certain parts of Europe where many homeless individuals are immigrants, American homelessness is more diverse.

According to data collected by National Law Center on Homelessness and Poverty in July 2014, half of homeless individuals are African-Americans, 35 percent White Americans, 12 percent Hispanic Americans, 2 percent Native Americans, and 1 percent Asian Americans. Why so? Due to a long history various issues, including but not limited to slavery, post-slavery, racial divide, post-racial divide, failed housing projects, ghetto mentality, and immigration policies favoring highly skilled and highly educated immigrants.

Fourth, how about children? According to the US Department of Agriculture, approximately 49 million people lived in food-scarce households in 2014, among which 16 million were children. In Zavala County, Texas, food-insecurity rate among children was 41 percent, while the state of New Mexico had 29.2 percent children living in food-insecure households. These are remote counties, which explain the difficulties in getting food and shelter assistance.

Using point-in-time method, The Homelessness Research Institute the number of homeless individuals were estimated 610,042 on a single night in January 2013. Sixty-five percent of them lived in homeless shelters or transitional housing and 35 percent lived in various random unsheltered locations.

Twenty-three percent of the homeless individuals were children under 18 years of age. Ten percent were between 18 and 24 years of age and 67 percent were over 25 years old. In between 2012 and 2013, overall US homelessness declined by 4 percent. Fourty-five percent of homeless individuals lived in major cities. Major cities provide more hidden places as temporary shelters, such as under the highway overpass, in alleyways, and behind tall buildings.

Fifth, how do homeless and hungry individuals cope on day-to-day basis aside from getting assistance from the US government in forms of welfare benefits and food stamps?

US federal government stated that under American Recovery and Reinvestment Act of 2009, a total of US$816.3 billion has been paid out in forms of tax benefits, contracts, grants, loans, and entitlements. This fund was intended to ease the poverty and economic problems arising from the devastating effects of 2007/2008 economic crisis and the current Great Recession.

Individuals and families in need are usually getting food and shelter assistance from non-profit organizations, including religious charity organizations. Food banks, food pantries, and churches have programs to feed the hungry with non-perishable foods donated by individuals and stores. Special kitchens have also been set up to feed the hungry whenever they need breakfast, lunch, or dinner.

The Society of St. Vincent de Paul has been serving the less fortunate around the world and around the clock with food pantries, free kitchens, free health clinics, thrift stores, vehicle donation programs, and shelters. Most Catholic churches in USA have “free food days” and other programs to help their members in need. Churches of other denominations also have such programs.

Tent cities, oftentimes, become homeless individuals’ last resort, after other avenues have been exhausted. While every homeless individual’s progression toward “complete homelessness” varies, some individuals and families have requested for temporary shelter but failed. Low-income housing provided by cities and counties are available for those with steady income and special needs, such as small children and caring for elderly or a terminally-ill family member, thus this avenue is fairly limited and restricted.

The National Law Center on Homelessness and Poverty estimated that there are more than 100 tent cities in the United States. Out of 100 tent cities, only eight were considered legal. The number of illegal “camp cities” keeps rising.

In California, “notable” tent cities can be found in Little Tijuana in Fresno, Ventura County, Safe Ground in Sacramento, Ontario, American River in Sacramento, and Village of Hope in Fresno. These tent cities are currently considered livable and relatively more comfortable than other tent cities.

In 2009, in a tent city near downtown Fresno, California, PEN/Hemingway award finalist and PEN/Malamud award winner George Saunders observed the 300 inhabitants by setting up a tent for himself. He had experiences living in ghettos and slums, such as in Kathmandu, Bangkok, Peshawar, Nuevo Laredo, and Jakarta. Fresno proved to be a new experience for him, where he found himself felt more insecure than in those foreign shantytowns. Shoutings, weird smells, and shadowy figures added to the suspense.

In general, a “tent city” consists of several sub-communities, such as “underpass” community and “open field” community. Tent city dwellers come from various backgrounds, thus they create a self-sustaining “bartering” community. With some “hacking skills,” tent city dwellers would be able to get clean water for drinking, hot water for showering, and electricity for lighting and charging electronics.

Poverty is a complex issue. It’s not about “laziness” and “low productivity.” It’s not merely about economic inequality and failed economic policies. It’s not just about one’s mental and physical states. It is a combination of many variables. Sometimes the variables are too many to count and oftentimes overlooked or hidden.

What matters is we have educated ourselves about the complex issues of poverty and aren’t afraid to speak up for the voiceless. The least thing we can do to the cold and the hungry is to accept and appreciate them as fellow human beings, not as some trash ready to be thrown away, like in cities that criminalize homelessness Sarasota (FL), Lawrence (KS), Little Rock (AR), Atlanta (GA), and Las Vegas (NV).

May this Christmas and many more Christmases are no longer cold and hungry all over the world.[]

Panajournal, December 29, 2014

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