They’ve used these funds to pay mega salaries and prop up stock values, choices that obviously benefit them. They needed public support, no one wanted the system to collapse. But how much? We’re now witnessing their return to profitability and have to wonder what sort of public-private partnership we’ve inherited.

Have the too-big-to-fail corporations, beneficiaries of the virtual absence of an anti-trust policy over the past three decades, held us hostage?

We learned a few months ago that China’s productivity rate over the past year was 8 percent. The reason, according to The News Hour, is that their banks have been lending. Just like here, China’s banks received bailouts. But unlike here, they were contingent on lending to consumers and businesses.

Now, if direct and fairer lending to consumers and businesses had been the goal, wouldn’t the banks be reaping profits and increasing their reserves in an improved and healthier economy? Nobel winners like Paul Krugman and Joseph Stiglitz, among others, have been claiming for nearly a year that if we’d vigorously confronted problems in the housing market in the first place, the bailouts wouldn’t be necessary. After all, these problems, as most everyone agrees, are at the root of the crisis.

The problem is that the banks also gain from an unhealthy economy. While housing drags down the “recovery,” Citi’s and Goldman’s paper inflates with taxpayer wealth and many continue to suffer. And those with the liquidity to take advantage of “free” markets are cueing up at the home auctions faster than the health insurance companies can rescind policies. They’re hoping that we are nowhere near the bottom yet.

The housing market of course was hardly free on the way up, pumped by a very friendly deregulatory climate for speculation that allowed predatory lenders to gouge buyers; and it’s hardly free on the way down as policies repress prices through restrictive lending. If we’ve learned anything about the current crisis it’s that ups and downs have become as normal as the presence of the homeless. Stability requires shocks, to paraphrase Naomi Klein’s “shock doctrine.”

Unfortunately we have nothing to absorb the shocks during these corrective phases when a lot of bad and abnormal stuff happens. Some have to bear the brunt of induced shocks and wait it out because this approach mostly benefits those in power. As Naomi Klein shows, it is during the down phases when inequality increases and many fortunes are made. And recent data bear this out. The already wide gap between haves and have-nots has widened in the past year. And non-whites have been especially affected since they’ve bore the brunt of the housing collapse through absorbing a disproportionate share of predatory loans.

Bailing out big banks has hardly contributed to a climate conducive to free markets and competition. On the contrary, it has allowed institutions already too big to fail to gobble up other banks, leading to even unfreer market concentrations that especially hurt small business. There’s a staggering number of small banks failing each week, as we learn from the FDIC, and many of these are being gobbled up by the already-too-big! Where is the regulation we were promised under the mantra of “change?”

This is the biggest problem we face in all industries across the economic spectrum: fewer and fewer corporate owners controlling more and more production. It’s the global gobbling-up game. Such has been the prolonged fetish of the free market myth that what happens as a result of concentration is ignored; we continue to celebrate a ”competitive” world that excludes more and more while underwriting oligopoly.

According to Robert Freeman, global companies spent $75 billion in 1973 to gobble each other up and block competition, soaring to $550 billion by 1993, and $2.4 trillion by 1999. It continues to increase today, giving them the power to artificially raise prices and reduce wages. The larger effect is an extraordinary transfer of wealth and income from Obama’s consuming middle class to the already too-big and over-concentrated.

“In 2007, the top 1 percent of the US population owned 60 percent of all business assets. Meanwhile, the bottom 50 percent of the population owned a mere 2.5 percent of such assets. The bottom 40 percent owned nothing. US income distribution has become more unequal than at any time since 1928, just before the Great Depression. In the ten years between 1996 and 2006 two thirds of all the growth in the entire US economy went to the top 1 percent of income earners.”

But the attention, thanks to big media, is all about the Fed and the level of interest rates, not issues of market power. Manipulating the money supply through the purchase of securities and altering the borrowing rate to banks, the Fed’s tools of the trade, unfortunately treats ups and downs as normal while doing little if anything about the power of huge banks with more market control to gouge borrowers.

Fed Chair Bernanke was actually out in the field a few months ago selling the Fed at a “town hall meeting” in Kansas City. The agenda was remarkably streamlined. The discussion never deviated from the Fed line of independence from politics, while Bernanke endorsed exactly what the filter-down sages in the partisan-dependent branches always do: no-strings-attached transfers to those in the know who’ve been able to ever so mysteriously marry the state to capitalism and call it the free-market system. He apologized for the pain many have to bear on main street, but urged us to be patient. We must accept the fact that in economics lags are inevitable!

Politics and money policy are already married. The dependency is hidden behind the fog of numbers on the nightly business news. We just need a different union!

The Obama “programs” for victims of the housing crash are products of a bad marriage. So few loans have been modified, or good refinancing accomplished, that Obama recently summoned the CEOs of the major banks to the White House to explain why more progress hasn’t been made. B of A, for example, has only modified 4 percent of qualified loans! This despite getting considerable public money, and showing significant profits in the last quarter. Aside from a public expression of displeasure at this “progress,” it is unclear what the White House is going to do about it. Obama’s response suggests that he’s open to alternative unions. But can he be? He just reappointed Bernanke because he saved the system from collapse!

Obama must know why so few modifications have been made. The banks are blaming the victims. They make it very difficult to qualify since they believe many applicants will be in worse shape later and that therefore it will be a useless exercise.

One of the responses to this dilemma in places like California, where “upside-down” homeowners make up a huge number of applicants, and where the effective unemployment rate is well into the teens, is for banks to grant temporary modifications and wait it out. These “modified” homeowners are then monitored for a few months to see if they’re worthy of a permanent modification. Many unfortunately don’t survive this test period.

One of the problems here is that in recent months foreclosures have ratcheted up as unemployment benefits run out and jobs are cut, particularly in the government sector with the state’s huge budget shortfall. And foreclosures mean a further decline in property taxes which breeds further shortfalls and more job losses. So more and more of these “losers” are falling out of the process. And the more there are the more hesitant processors are to finalize modifications, believing the system’s weaknesses will just continue.

An active program to stabilize housing a year ago would have prevented all of this. Now, what passes for an active program is aimed at merely cleaning up the mess from a lack of effective action. Gone is the memory of what was at stake when this crisis occurred. Like with the Iraq war in 03. In the run up there was a “debate” about its legality and validity, but once the occupation occurred the discussion turned to technical matters and fundamental issues were lost. Similarly, a debate about the need to bypass the banks and shape a policy that counters their self-interested moves has been lost.

The media’s managed “debate” has made us amnesiacs. But not only have we forgotten what’s at stake. There’s been a shift in how the issue is defined. At the outset there was some acknowledgement that this was no normal market correction, that it was caused by specific policies that are no longer credible, the failed ones of the Bush administration indebted to the Reagan legacy, etc. Recall Obama’s speeches that pitch the middle class, especially in the run-up to the election last Fall.

People shouldn’t be the victims of these policies. It was not their fault. We need to regulate the banks. We need to stabilize home values because that’s the basis of the middle class’s wealth, and what allows consumers to keep spending as well. The loss of equity in property makes it difficult for consumers to borrow or refinance, which has a direct effect on spending, which has an effect on employment as demand for products slackens and employers must resort to layoffs.

These comments about the system are right on, the basic commonsense of Econ 101. But it’s the bad apples now, not the rotten system, that we’re being told have sent everything into freefall. And we’re back to the abstractions of the Bush years: there’s no free lunch (for those who don’t qualify for bailouts!); those who couldn’t afford to buy that house, shouldn’t have, etc. The policies of the past year or so have trashed the credit reports and driven the values down, not to mention disappeared retirement and blocked access to borrowing.

But the response to this situation is customized. The time period between the onset of the crisis and now barely exists. Your situation is your situation and you must bear the burden of the events of your own making!

Brokers have been especially victimized in recent months. They’re popular targets. When the housing market was booming, banks had a cozy relationship with them. They looked the other way on limited documentation because the high rates of interest they got in return made their days quite profitable. And since values kept going up many of these applicants could refinance quite soon anyway, correcting the near-sightedness.

They offered real help to the borrowers who were either first time homeowners, or perhaps not as credit worthy as the rules demanded. And the boom in home ownership was a good thing for many who needed some bending of the rules to get access to the American Dream. The brokers fulfilled a central plank in this dream: competition!

While the banks made it difficult to borrow and often offered rates that were too high, the pool of brokers helped to provide choice and in many cases lower rates. Sure, they got points for this. But on balance a first time borrower could make out better even if they didn’t have many options.

Since the implosion it’s been a different story. Brokers have been demonized for approving past loans that people could never afford, thus precipitating the crisis. But the culprit was predator loans, especially the sub-prime variety, authorized by greedy banks like Countrywide that speculated with marginal borrowers (Countrywide was recently gobbled up by B of A in its scramble to eliminate competition!).

Sara Bjazevich is a loan consultant at Gates Funding in San Pedro, Calif., a subdivision of Los Angeles. She’s been in the industry for several years, helping many from this area get a piece of the American Dream. A mere glance at the news these days, or at ads on TV or the internet, suggests there’s a lot of good deals out there for victims of the downturn: historically low rates for home buying and refinancing, mere fees-to-lawyers away from getting that mortgage modified, and government programs everywhere to “HELP” people.

So I asked her to offer some insight into what’s happening.

Her experience with loan modifications is not very promising. She’s never seen one completed! They drag on and on and finally the applicants give up in frustration. Their income has to be so high that they nearly don’t need one! And these “modifications” are often only “forbearance” schemes that add back payments to the principal with little or no improvement in terms or rates.

Rates are definitely lower now for home buyers, according to Sara. But there are really no special deals, and the banks are constantly changing the rates. It’s often an hour-by-hour thing. And even when the low rates appear to be “locked in,” meaning guaranteed, the banks can cancel the process even for applicants with very high FICO scores. And every file has become a hassle because the banks seem to be intentionally slowing the process down, refusing to make quick decisions, according to Carla Califano, Sara’s assistant. This has led to the need for re-approvals and reappraisals, and a new process that leaves applicants further frustrated and forced to bear more expense.

Refinancing has become very difficult, even for those with equity, because regulations regarding loan-to-value (LTV) have been tightened at a time when this “value” is shrinking rapidly. Applicants looking into the Obama Home Affordable Program will be allowed a max CLTV—combined loan to value—of 125 percent, but this past loan must be secured by either Fannie Mae or Freddie Mac.

One of the very disturbing trends she’s noticed is the disappearance of more and more wholesale lenders that once offered competition for borrowers. Sara remembers dealing with over 50 of these lenders, most of whom now have been gobbled up by the big banks or forced out of business. Suntrust, Flagstar, Reunion, Stearns Lending, Sierra Pacific and a few others are the only ones left. And, adding insult to injury, the big banks are refusing to deal with them one-on-one.

Of those still standing, like Chase and Citi, only Wells Fargo and B of A (which stopped wholesaling last year but has recently returned) will deal directly with them. She feels their ultimate goal is to eliminate the brokers; that in the not-too-distant future they will no longer be part of the picture. Proposed state legislation would permit doing credit checks on realtors and loan officers!

A crucial area that shows the extent of the big banks’ control of the process is appraisals. Critics of the sub-prime lending fiasco fix on the appraisals of property during the expansion as the problem, saying that many of them were done fast and loosely, consistent with the inflationary tempo of the times, and this allowed homeowners to withdraw cash from their property that was not supported by factual wealth. But since this was pumping the consumer economy, and returning many bennies back to the lenders, many made out like bandits. So it makes some sense that with the plummeting values there must be some sobering revisions to how property is valued.

The problem, Sara claims, is that now values are being understated and distorted! And this is directly related to the dominance of the process by the big banks. The culprit is the federally-inspired Home Valuation Code of Conduct (HVCC), created through legislation implemented May 1^st of this year. This was supposedly all about standardizing appraisals, getting rid of the quirky unfairness, so that reliability and stability could finally be restored to the system.

Sound good so far? Well, one of the unfortunate results of this legislation is to give the big banks more control. Title companies and banks, and we’re talking about the few remaining big ones, are now allowed to own their own Appraisal Management Companies (AMCs). This encourages a virtual monopoly of the appraisal assignments and thus the ability of the big banks to influence the valuations. The independent appraisers, those locally based who have a stake in giving clients the truth and who best understand the relevant facts of their investments, are dropping like flies. The appraisers who work for the AMCs are doing the bidding of the big banks that have a vested interest in the outcome of the appraisals!

Which is to say they have clout, according to Sara, in getting the numbers to justify their restrained lending. They do what they want to deliver their version of reality. These appraisers work out of central command and apply global formulas that usually diverge from the local circumstances. And they have the power to request repeat appraisals, becoming more common, and pass on the fees to boot! Another disturbing trend, she claims, is that they are making clients pay for more and more of the process…

If we don’t restore some trust in the system soon, and above all get an anti-trust policy (didn’t Barney Frank suggest a while ago we needed one!), then the American Dream might very well flip into a nightmare.

John O’Kane has been the editor of AMASS magazine, a publication of mass culture and society, since 1988.

They echo Martin Luther King’s appeals for unity. In fact Mr. Obama’s recent pitch is similar in tone and rhetoric to his speech on race last year in the run up to the election. Coming in the wake of the Reverend Wright brouhaha, and nominally meant to dispel notions that he might be an angry black man ready to wreak vengeance against whites, this speech was about getting us to understand each other and work toward solving problems together. Forget the past and push on to the promise land that awaits us all, he urged. Racism still exists but can and must be solved through a shared focus on the present and future.

Mr. Obama is doing what charismatic leaders must do, move citizens with the power of words and ideas to change society. But Winston Churchill’s words, all over the web these past days, are apt: “Words are easy and many, while great deeds are difficult and rare.”

We’re in awe of the speeches and await the moment when their ideas are put into practice. Little has yet to change. Foreign policy looks strikingly familiar. Congress has just passed, with very little opposition, the supplemental appropriations bill to keep the wars going. As does our economic policy. It looks in fact mostly like the filter down mumbo jumbo we were fed during the Bush years. Though now, as Arianna Huffington reports even the pretense that what benefits Wall Street will benefit Main Street is slipping away.

Will his fine phrases levitate the drones from their death dives into schools and residences? Challenge the military establishment? Eliminate lobbyists? Convince corporate boards to accept less profit from weapons production? Will Armageddonists and Jihadists, everyday citizens and power players, reach out and touch each other?

George Bush’s faux folksy pitches to the lowest denominator trafficked in the abstractions of freedom and the “American way.” There was no pretense about change; just stay-the-course tirades that impressed a sufficient number long enough to keep it all going. Mr. Obama is also engaged in impression management. And while his form certainly rings truer, why do impressions have to be managed in the first place?

His community outreach program, now extended to the global stage, is called “Organizing for America.” It’s sold as a way to bypass the elite and go directly to the people during the election. Today we can register our wishes and dissatisfactions by simply accessing the White House’s website. OFA is a welcome force for openness and democracy. But it’s also a PR gesture with hidden motives. What is the relation between those who are organizing “for” America, and those at the grassroots level, not nearly as well fed, who are organizing the America yet to be recognized and represented?

This America has to be managed, convinced what’s good for it. It’s those who don’t want a military buildup in the Mideast, and who cringe at the prospect of another Vietnam; who want single payer health care and see through the administration’s direction as caving-in to corporate power; who see corporate welfare in bailouts that are supposed to stabilize a financial system that’s in fact cutting off credit, raising interest rates and denying loan modifications.

And the tragedy is that this America is in the majority, as polls confirm. It’s a redux of the experts know better; they see what we don’t. A viable democracy’s leaders don’t, and shouldn’t, consult the polls at every turn before deciding how to act. And the people don’t know all the facts, and can be a fickle lot to boot. But leaders always bid better for those who play more of a role in getting them where they are, and who pay more as well. And especially since the rise of inequality over the past generation that’s enabled elites to own politicians in what has become nearly a one party system. They no longer need the lowly to keep power. And the fickle masses have short memories!

Perhaps that’s why the “cram-down” legislation, which would have given bankruptcy judges power to modify mortgages, was approved by the House recently but nayed by the Senate whose members have much more time between elections to, well, manage the people’s impressions!

We’ve heard these arguments before. McNamara and the inner circle of technocrats were privy to the commie threat that bypassed ordinary folks during Vietnam. Years of unfavorable polls about the war barely fazed Nixon, who admitted as much. And so the occupation went on until the exit could be managed, the impressions shaped and conformed, the rhetorical ground laid firmly so that revisionists could rewrite history as the people’s memories faded, allowing the military to renew its pledge again to help young men be all they can be. This changed attitude over time helped make the lobbyists’ jobs much easier in convincing legislators to appropriate more funds for weapons production in an increasingly hostile world in need of our military assistance. As I.F. Stone was fond of saying during Vietnam, the real danger of a gargantuan military is that more and more workers will be looking for ways to ply their skills.

With regard to health care the administration is now sponsoring “house parties” to make sure people understand what’s best for them. A reprise of the early 90s when insurance companies spent millions on PR to nix anything resembling single payer, except that now the government of “change” is running the interference for the companies! The experts are out organizing for America, helping us get our heads straight about priorities: it’s not universal coverage and reduced costs that are important, eliminating the waste and bureaucracy that blocks delivery of quality health care to more, but the need to preserve our current private system.

In one of the more incredible reversals of spirit uttered by Mr. Obama in recent weeks, he’s argued that even though the single payer system may be better, since we already have a private system, to change course would be disastrous! For whom, we might ask? Not for the millions who have no insurance, part of the majority that needs convincing; or even those who have it but their costs are denied by greedy private providers. One of the most significant causes of bankruptcies in the US, as this group knows, is indebtedness from health care costs.

Get the profit motive out of enterprises that traffic in life versus death! This is what the yet-to-be-impressed majority already want. How many premature deaths have there been since the last assault against single payer in the early 90s? Studies show that Americans’ life expectancies have dipped down well below that of European and other advanced industrialized nations who have universal care, suggesting a direct link between this decline in the US and the lack of coverage for so many whose early deaths have dropped the national average. Are the profiteers waging war against citizens?

As a country we were much closer to getting universal health care during the Truman years than we are now. So much for the progress of the American Century!

The America that the team needs to impress wants a chance to be part of the agenda, not merely given the option to ratify what’s been decided. Single payer’s many players need a real seat at the table. The antiwar constituency needs access to discussions.

The real danger we face is that fine phrases will replace good action, not merely preface it. One of George Bush’s central ruses was that if you say something over and over again people will start to believe it! Will Mr. Obama’s reach out say we’ve arrived, chilling the excluded from speaking out? Do the poll numbers registering his popularity say that the ready-to-be-impressed public has swallowed the rhetoric? Or at least that it’s pumped up enough to extend him a waiver? We’re hostages to optimistic word play. We find heroes amid every crisis, bootstrap stories in every success. Will Mr. Obama’s very inspirational messages of unity and striving merely cut and paste the backstories we need to make sense of actual events in the absence of good action?

The unity message suits Wall Street and other corporations Mr. Obama said he’d confront, just fine. It’s the perfect song for keeping things the same. We need only tune out the conflicts and difficult to solve issues from the past and borrow some snake-handling joie de vivre from the bible brotherhood to melt away differences. This strikes a positive chord for sure. There’s no question the past cramps present options. But there’s certainly not very much we can do about it.

So, Mr. Obama’s messages urge, let’s break free from it, get a fresh start, bring everyone—well mostly everyone! —to the table, and act as though the uninsured will magically get funds to buy coverage; the Muslim world will suddenly forget the mistaken bombing of a Sudanese pharmaceutical plant in the 90s, or the policy error in the CIA-backed toppling of the Iranian regime in the 50s; or ignore the palatial embassies being built in the region, and the many military bases that dot the globe—nearly 800 by current count—to prop up our overreaching, oil-slickened foreign policy!

Going-forward-freely implies that the power imbalances of the past that led to the current crises should and can be equalized with clap-happy faces at the Dow Jones bell, like deferring to the “free market” without exposing and righting the unequal playing field that got this way through “free” actions. There are good ways to forget the past, and bad ones. You can only successfully forget the past; remove its weight on the living, by remembering it correctly. And unfortunately one of our major barriers is forgetfulness, an amnesia fed by overconsumption and instant gratification, a credit-card pathology that keeps us gorging in the moment.

It doesn’t help that the media acts like everything is back to normal. A glance at the news reveals little evidence of our massive unemployment. The glittery ads for easy money continue; cheap mortgage rates are offered (for the few who can take advantage!), but the coverage is scant regarding the mortgage crisis itself and its causes. It goes with the tenor of the times in Congress. The reform spirit of late last year has virtually dissipated. No revamp of Glass-Steagall or new regulations on banking are in the works.

Can racism be solved, for example, without some acknowledgement of past wrongs that have shaped institutions and led to huge gaps between whites and non-whites? The unfair playing field can’t be wished away. How we attend to past injustices will affect how we go forward, and if we progress.

We need some serious soul-searching about our foreign policy. Mr. Obama “invites” the Muslim world to be part of the international community. He apologizes, an excellent gesture, for mistakes we’ve made in the region. He rationalizes our military presence, now escalating, as necessary to eradicate Al-Qaeda. Of course the majorities here, there and in Europe oppose this escalation. The question unanswered is whether the 3,000 victims of 9/11come anywhere near the numbers of victims in the Muslim world we created through our invasions. And it is debatable whether anything constructive can be accomplished over the long term if our military presence continues. Most know our presence is not just about capturing Al-Qaeda; that we’re there for the oil and power. And they also know that our domineering presence has created Al-Qaeda sympathizers.

Mr. Obama’s fine turns of phrase can’t make these facts go away. Our whole post-WW2 military build-up needs to be reexamined, particularly the post Cold War era dating from Iraq 1, the event that alienated Muslims, especially Bin Laden, our former ally in the proxy war against the Soviets in their war against Afghanistan during the 80s. America has been a force for good in the world, spreading freedom and democracy. Its institutions were once the envy of the world. But somewhere along the line, surely around the time corporations began to go overseas in the 70s to seek out cheap labor and increase profits, freedom-spreading and democracy-enhancing fertilized imperial ambitions.

Can we humanize our empire? Fledgling democracy groups all over cite our founding fathers for inspiration. Obama is infatuated with our founders, especially Lincoln. But our founders must be resting uneasily these days. We aren’t the same country that their ideals promised. The freedom-spreading is being dwarfed by empire.

If it is about setting examples, we’re in trouble! Our leaders ignore the wishes of the people in the most famous people’s society ever constructed, supposedly the model democracy. We throw billions at banks and the rich, spend lavishly on weapons to kill people, giving the military and its lobbyists an orgy of affluence in wars we can’t afford, but can’t insure nearly a third of our citizens, can’t manage a policy to keep people from foreclosures due to policies that allow banks to pig-out on bailouts…

What can our intentions be? Do we really believe other countries want exactly what we have? They likely want much of what we used to have! To this day, hardly any of the housing destroyed by Katrina has been replaced. But we need to spread democracy and freedom overseas. Our domestic and foreign policy has created many refugees. In his first 100 days Mr. Obama has created millions of refugees in Pakistan. His bank-heavy “socialism” has created millions of refugee-homeless here, all so that the privileged can stay privileged. Ordinary citizens are being eliminated at an alarming rate everywhere that our policy tentacles reach.

Perhaps like Nixon, who in times of economic crisis started beefing up his attention to China and other countries, Obama is focusing his energy on foreign policy to escape a contentious domestic scene. But both policies are in surprising sync. They’re about preserving the imperial attitude.

His words say different of course. And we can only hope that the ideas he speaks can humanize actions and lead to good results. But it seems that America now resembles Colonel Kurtz, the hero of Coppola’s 1979 film “Apocalypse Now,” played by Marlon Brando. One of the best and brightest, a humanitarian devoted to spreading good American values and ideals, Kurtz’s vision somehow gets warped and distorted in the jungle, and he loses perspective about the war’s purposes and begins to massacre innocent people. The effects of his actions spawn a life of their own and get out of control, mandating more severe responses to stay the course.

This is not so far from what we’re doing now. The effects of our policies over a long period of time have created many unintended consequences and much collateral damage, and this has blown back in our faces. And to maintain stability we have to get more involved than ever.

Unfortunately, Mr. Obama has taken the helm of a system that won’t change with mere words.

John O’Kane has been the editor of AMASS magazine, a publication of mass culture and society, since 1988.