Dodd-Frank’s part in the destruction of the middle class

“Stagnant Pay Slowing Area House Sales” (Valley News, May 22) misses another culprit: Dodd-Frank.

On July 15, 2015, Federal Reserve Chair Janet Yellen testified to the Senate Banking Committee: “Demand for housing is still being restrained by limited availability of mortgage loans to many potential homebuyers.” [link]

Dodd-Frank tightened the rules on mortgage lending, but the real cause of the 2008 crash was the ever-more-complex bundling of loans to feed the speculative exuberance of investors. Dodd-Frank, as far as I’ve been able to determine, did nothing to protect the housing market from profiteering investors. Indeed, in 2013, the New York Times reported that the same games had resumed. [link] It seems clear that the main purpose of Dodd-Frank was to protect speculators by limiting the risk that expanding homeownership necessarily entails. In other words, it made it much harder for most people to buy a home for themselves.

This is particularly true for the self-employed, independent contractors, contingent workers, and freelancers, who are projected to represent 40% of the workforce by 2020, if they don’t already. At the beginning of 2014, real estate attorney Shari Olefson, quoted by Yahoo Finance, said that “about 20% of people who have mortgages right now will not be able to get qualified mortgages” and that “more people will be pushed into the rental market” (again, benefiting investors – and Dodd-Frank’s tightened rules do not apply to loans for rental properties). [link]

Census Bureau data show homeownership continuing to plummet in every region of the U.S. since a peak in 2004, most dramatically for those under the age of 45. Since housing prices have also plummeted, that indicates a much deeper change than stagnant pay, which has been that way for most Americans since 1965 and slowly declining since 1999.

Clinton: more and more unfavorable

From a memo to superdelegates, Hillary Clinton campaign, May 27, 2008:

Because our country’s electorate is relatively divided along party lines, presidential candidates who are competitive and have been in the public arena for a period of time typically have higher unfavorable ratings.

For example, Hillary and Senator Obama have comparable unfavorable ratings – in the most recent Newsweek poll of national registered voters, 43% are unfavorable to Hillary and 40% are unfavorable to Senator Obama. Senator McCain has similar unfavorable ratings – 40% are unfavorable to him in that same poll.

As might be expected, Senator Obama’s unfavorable numbers have steadily risen over the last two years – in a May 2006 Newsweek poll, 10% said they were unfavorable towards him. By July 2007, that number had risen to 19%; 8 months later it was at 28%, and in the two most recent Newsweek polls, conducted in April and May of this year, his unfavorable rating is at 40% – 4 times higher than it was two years ago. Hillary’s unfavorable rating has remained relatively steady (according to the same Newsweek polls, in May 2006, her unfavorable rating was 45% – it is now 43%). Similarly, Senator McCain’s unfavorable ratings have likewise remained relatively unchanged (according to the same Newsweek polls, in March 2008 his unfavorable rating was 35%; 41% in April 2008, and 40% in May 2008; Newsweek did not record unfavorable ratings before March 2008 for Senator McCain).

More importantly, candidates’ unfavorable ratings do not indicate they are too polarizing to win the Presidency; to the contrary, these ratings reflect the divisions in our country between our parties as candidates become known and associated with the Democratic or Republican Party.

That was a nice try to put the entire blame on partisanship, but there is a clear trend in 2016 that argues against Clinton:

It looks even worse over the long term, since Clinton left the Department of State after 2012:

In stark contrast, as Bernie Sanders became more widely known, his favorable rating steadily increased:

Even Donald Trump is trending better than Clinton: