Showdown

[mqbush]

So eager to absolve themselves of responsibility for this crisis, financial apologists brattily blame the primary victims. A young couple, wishing to own a home, seek advice from financial specialists, who tell them that they indeed can, to their delighted surprise, manage a mortgage. Once the couple signs the papers, the bank radically raises the rate, turning a reasonable financial arrangement into loan-shark usury. The couple had been assured they would be fine, and under the original terms they would have been fine. This couple, and so many thousands of others, are not “deadbeats,” or “irresponsible,” or “stupid.” No, predatory lenders lied to these people, knowing full well that they would fail as soon as the rules changed, knowing and not caring because these loans would be bundled and sold by the time they went bad. This is purely evil, even if a total lack of regulation of the industry has allowed it to become nominally legal.

By now there is so much disgust with financial chicanery,-Reaganomics, corporate welfare, economic globalism’s ravaging of cultures and nations,-that people would rather risk a depression than help keep the crooks in business. The people take a hit whether they bail the crooks out or if they don’t. The people are always the losers when the market is not firmly regulated.

Who do the anti-regulation doctrinaires think they’re kidding when they say we need even more deregulation if we’re to survive this crisis? If some investor petulantly refuses to back some venture because there might finally now be a few rules and limitations, and he’ll have to pay some taxes, then he’ll be quickly be pushed aside by another investor who would rather make some money than have a snit.

America’s economy in 1930 was in the hands of a small number of possible investors in a small number of industries, meaning that if this controlling group were unwilling to invest, the entire economy stayed moribund. Despite the attempts, these past several years, to recreate the conditions of that era, America had become too diverse, too democratic in the interim for this attempt to recreate a 1930-like dependence on a financial royalty –that had better be catered to- to fully succeed.

Before 1913’s initiation of taxing of personal and business income, the revenue to run the country came primarily from trade tariffs. Ergo globalism’s trade treaties to eliminate this major source of revenue. If we taxed China’s cheap goods coming into this country, this could go a long way toward reducing our debt to China. It would also mean that American-made goods could then be more competitive, and our industries at home could start producing again. With the debt to China shrinking, our tax dollars could once again actually buy something we can use, instead of going just toward paying interest to China.

The demand for energy is not going to go on hold in a recession. An entrepreneur needing a loan to invest in a wind farm will not have trouble getting that loan even if no one else can. Building a 21st century energy infrastructure can keep lots of people employed for years, recession or not.

We’ve come to think that America needs Wall Street. It was Wall Street that kept us in the Great Depression for so many years, and progressive, middle-class-friendly Keynesian reform that got us out of it. Wall Street has been an anchor around our neck twice now. Have we learned once and for all that “the people who are going to make us rich” are going to break us if we let them?

[unblock]

1. a few of these people didn't know, but even they SHOULD have known

the vast majority of these people knew that they were stretching. they simply hoped that prices would continue to rise or that they would get that raise or whatever.

SOME of the mortage brokers lied to their clients, but the vast majority of the lying was done by the brokers to the originators, and to the investment banks, not to the prospective homeowners. the prospective homeowners have the possibility of getting into that nice house, they don't need to be lied to the way an underwriter needs to be lied to.

i'm not fond of the way credit card companies ply their wares, and yet i have little sympathy for people who get in way over their heads on credit card debt. i'm all for reforming the companies, but consumers need to look out for themselves.



as for your main point, don't throw the baby out with the bathwater. a PROPERLY REGULATED wall street is essential and productive. the problem as not wall street per se; the problem was letting them do whatever they wished and damn the consequences.