Afternoon Siesta

While President Obama fires up support for his economic recovery strategy in Indiana, we salute those citizens who have taken matters into their owns hands--The Neighborhood Assistance Corporation of America (NACA). They counsel stressed-out homeowners in Connecticut on ways to refinance their mortgages. NACA organized hundreds of angry homeowners and volunteers to travel in vans and minibuses to Greenwich, Connecticut, to protest outside the multi-million dollar mansion of Morgan Stanley's CEO John Mark, among others, to let him know how they feel.

The "Predator's Tour" is demanding more accountability from CEOs of financial institutions respnsible for millions of unaffordable mortgages across America. Sporting bright yellow shirts that read"Stop Loan Sharks", the group explained," We can't let them live quietly in a lap of luxury while they throw hard-working Americans out on the street."

George Packer has abandoned the battlefields of Iraq to scout out the warzone in Florida. In the latest New Yorker (February 9 &16,2009), George writes The Ponzi State, where real estate speculation has given way to "stucco ghettos" around Tampa and Fort Meyers.

The Los Angeles Times writes about the state of the states in a piece written by Ashley Powers and Richard Fausset. Yesterday I wrote about the exclusion of the state stabilization funds from the economic stabilization act. The vast majority of states act under laws requiring that budgets must be balanced. They have run out of the options of tax increases, borrowing and now are into the severe cuts in services.

At least 39 states are into the cutting stage. The last fiscal year saw states experiencing budget shortfalls of $40.3 billion and 2009 $47.4 billion. According to the National Conference of State Legislatures year 2010 will show a $84.3 billion budget hole and fiscal year 2011 it will be at an estimated $350 billion.

The hardest-hit states are Nevada with a 38% budget gap; California with 22%; Arizona at 28% and New York at 22%. This requires some draconian cut backs in services--mass transit routes will be cut, parks and zoons will be closed,health services are already being terminated and schools will be under-staffed and classrooms crowded. States are already eliminating cash grants and health insurance for those who are temporarily disabled and eliminated health programs for the poor and mentally ill.

One measure that should be considered is the elimination of state, county and municipal services to gated communities since they have adequate incomes to hire their own services. Also, the national recovery package should only go to congressional districts who voted for the program and not be given to states like South Carolina and Mississippi who claim that federal conditions are too onerous.