x Abu Dhabi, UAEThursday 18 January 2018

George Packer's book on US real estate collapse an unblinking portrait of economically savaged country

The housing and financial crises of the previous decade hang heavily over America, but George Packer argues in his new book that they are symptoms of a deeper malaise.

Devastated by the collapse of the property bubble, Americans are finding it a struggle to find work and maintain the living standard enjoyed by their parents, explains George Packer in his new book. Spencer Platt / Getty Images
Devastated by the collapse of the property bubble, Americans are finding it a struggle to find work and maintain the living standard enjoyed by their parents, explains George Packer in his new book. Spencer Platt / Getty Images

The Unwinding: An Inner History of the New America

George Packer


We might as well begin at 4809 North Seventeenth Street in Tampa, Florida, because we'll get there soon enough. A tattoo parlour owner named Sonny Kim had taken title to the house - "a decaying two-storey stucco house … with a blue tarp over the roof, boarded windows and mattresses piled in the overgrown yard" - for US$100 (Dh367) in 2006. After three months, the house was sold for $300,000 to a buyer who financed the entire purchase - no money down - through a mortgage. Another 18 months passed, and the new owner had defaulted on his loan. The bank now had the house back on the market, in much the same rumpled condition, for $35,000.

A reporter for a local newspaper named Michael Van Sickler chased Kim's story, seeking to understand how such unquestionable fraud had been allowed to proceed. What bank would grant a $300,000 loan, with no down payment, on such a wreck of a house? All of them, as it turned out.

Enter George Packer. "You could trace the Wall Street collapse," Packer ruefully tells us, "right back to the house at 4809 North Seventeenth Street, and to the houses in Carriage Pointe and Country Walk." Packer, a staff writer for The New Yorker magazine, is best known for his coverage of Iraq during the 2003 war and its aftermath, and his accompanying book The Assassins' Gate. He is practised in the art of reporting from war zones, in sifting through the carnage for the kernel of information that assists in explaining the damage. The insight of The Unwinding is to treat post-crash America in much the same fashion. There was a war here, and everyone lost.

The Unwinding is a despairing group biography of the new United States, shattered by deindustrialisation, demoralised by war and economic stagnation, impoverished by the collapse of the property bubble. It is the story of Tammy Thomas, lifelong resident of Youngstown, Ohio, stricken witness to the departure of manufacturing jobs that, politicians' pledges to the contrary, were never going to return. It is Dean Price, who imagines making a fortune by opening the country's first biodiesel lorry stop and slowly goes bankrupt while selling local schools and businesses on the concept of transforming cooking oil into fuel. And it is Jeff Connaughton, who meets a youthful Senator Joseph Biden as a college student, is inspired to go to Washington to join Biden's staff, and spends his career as an increasingly influential Capitol Hill staffer and lobbyist, while feeling increasingly disengaged from the actual practice of politics.

Packer knits together these profiles into an unblinking portrait of the dismal, economically savaged America of the post-Lehman Brothers era. Their stories are interspersed with capsule biographies of American overachievers, and a Dos Passos-esque series of interludes smashing together newspaper headlines, song lyrics and snatches of dialogue into a history of the last 35 years as overheard while switching television channels. The Dos Passos pastiche goes skin-deep only, a cable-news ticker in print, but Packer's deceptively genial style circles each target - Oprah Winfrey, Newt Gingrich, Jay-Z, Alice Waters - before zeroing in on the moral rot at the core of their success stories.

These fairy tales, he argues, have the effect of convincing other Americans, possessed of neither their wealth nor their influence, that all their travails are the product of their personal failings, not any wider societal decay. "According to the laws of the universe," Winfrey tells her audience, "I am not likely to get mugged, because I am helping people be all that they can be." What does that mean for the millions of Americans mugged by reality after 2008? The onslaught of platitudes such as Winfrey's about positive thinking and karma leads to men such as Danny Hartzell, unemployed and verging on homelessness in Tampa, convincing himself that his family's struggles must be a punishment for some iniquity of which he is not fully aware.

The Unwinding is the secret history of what the book dubs "the formerly middle class", a single long howl of heartbreak and humiliation. It proffers no answers and proposes few individual villains, although the Occupy Wall Street movement and now-Senator Elizabeth Warren come in for respectful treatment as protectors of the forgotten. Packer writes as a liberal disgusted by the political gridlock whereby even liberal politicians seem to hold no sway over the legislative process, and essential banking reforms pushed by Connaughton are fatally weakened by a legion of lobbyists, even as his former mentor occupied the vice presidency.

If the book can be said to have a flaw, it stems from the same source as its copious strengths: the focus and intensity of its reporting. Packer is a dogged journalist, and his reports from the frontline are visceral. But his concentration also subtly distorts the portrait he paints. The part stands in, awkwardly, for the whole. The weaknesses of the Dodd-Frank banking reform bill distort the very miracle of its passage, or the administration's other successes in healing the wounded economy, such as the stimulus package of 2009.

And the reportage on the Tea Party and Occupy Wall Street do not account for the ebbing of their influence in the political realm, particularly after President Barack Obama's resounding re-election last year. This is a work of current events that is already, in some part, a work of history.

Packer is devoted to his thesis that the US is an out-of-control SUV with no one at the wheel, but there should have been room, in a book of this scope, for some acknowledgement of the political response to the crisis of 2008. The indictment is too thorough, the unyielding focus requiring a selective marshaling of facts. The Unwinding is powerful enough; a modicum of dissenting testimony would only have served to further hone its arguments.

The profiles are undoubtedly compelling, but the book's heart is its unblinking portrait of Tampa - the most stressful city in the US, according to one survey - in the midst of an entirely self-generated crisis. Tampa was paying its bills by floating bonds on the projection of future growth - literally paying for today with the promise of tomorrow. And the business of Tampa, and of Florida as a whole, was construction. White-collar workers paid for their luxurious houses by building houses for others to live in, and increasingly for others to speculate in. There was astonishing money to be made in speculation, until suddenly everyone got spooked, and the bubble burst: "At some point in late 2005 or early 2006, with the housing market at its dizzying mid-decade height, speculators suddenly lost confidence, the faith that kept Florida aloft gave way, and the economy plummeted like a Looney Tunes character who, suspended in midair, looks down."

The new business of Florida was now the undoing of what it had so assiduously built. Judges were brought out of retirement to plug away at "the work of clearing Florida's backlog of half a million foreclosure cases, as earlier generations had cleared the mangrove swamps that made way for Tampa". Lawyers were able to slow down the relentless purge by simply asking banks to prove their ownership of the mortgages in question, which, due to the convoluted sale and resale of mortgage-backed collateralised debt obligations, they often could not. And the rare times when one of the victims would appear in court, "embarrassment would settle over the proceedings as if a terminal patient had wandered into a room where doctors were coldly discussing her hopeless prognosis, and the judge might be more likely to ask a few hard questions of the plaintiff's attorney. Fortunately, this almost never happened."

Packer is mostly uninterested in the question of who is at fault for the collapse of the American economy, preferring to echo the former House Democrat Tom Perriello, who comes to understand that "the elites in America didn't have answers for the problems of the working and middle class any more". The failure of the elites has resulted in the fracturing of the US into two unequal pieces, where Republican insiders celebrate the nomination of Mitt Romney at their $123 million convention while Danny Hartzell's family makes do with five dollars for the rest of the month. This is hardly a new story - inequality is as old as society. But the sense that Americans are alone, abandoned by their representatives, estranged from their families, adrift from the circles of protection, governmental and social, that keep people cushioned from the worst, is chilling. "He had a week to get rid of all the lies," Packer says of Colin Powell and his preparation for his fateful 2003 appearance at the United Nations, "and that wasn't enough time, and there never could have been enough time, for he didn't stop to challenge its premise." The US has left its own behind because so few Americans have stopped to challenge the premises of an unequal society. Until then, the unwinding continues.


Saul Austerlitz is a frequent contributor to The Review.