Friday, September 19, 2008

Where We're Going.

It’s been real fun to hear John McCain and other Washington veterans disingenuously rail about Congress and how they aim to be agents of change. Senator McCain can start with himself, since he’s been in government longer than anybody running for office in the current Presidential election cycle. Once again, I have to remind myself that there are actually more important things going on than who gets to be the next president. Only a very few, but a few nonetheless...
It’s hard to believe my first post on this blog was not about the Iraq war, not about the incompetence of this administration, not about the criminality of the Bush cabinet, but a rant about a holiday.

February was a long time ago.

Just ask anybody on Wall Street. Ask anybody with a 401K plan, or any stock investments, or anyone who works in finance or media… ask anybody who owned a home. The third quarter of 2008 and the calendar year’s end will be marked by new and historic low points in the growing national financial disaster. I’m not making any real astute predictions there, but I have to tell you all it’s going to get much, much worse. The cumulating effects and radiating impact of the various elements of this financial-soon-to-be-economic crisis, (a trickle up disaster of sorts) threaten our country and the world as we know it.

In a strange twist of irony, Ronald Reagan’s fanciful trickle down theory of economics has been turned nightmarishly on its head.

Those trickled-down-upon masses, (those people ignorant of their choices, options and rights), fed the housing and mortgage finance boom of the last years. These citizens agreed to criminally usurious loan agreements and now have “cried uncle”. They can’t pay the absurd debts they accrued. They have been defaulting on loans for the last few cycles. Their homes are being foreclosed on, their property and possessions repossessed. The value of everything they “owned” is depreciating in a spectacularly destructive and infectious manner.
I say “infectious” because in America, depreciation sometimes happens in a staggeringly contagious mode of pathology: homes are foreclosed on/ neighborhood housing values plummet/ more homes are defaulted on compounding the loss of value for houses in neighboring areas/ small businesses serving neighborhoods fail/ more jobs lost/ more debt is defaulted on etc, ad infinitum. Perhaps consumers shouldn’t have been allowed to take on unsustainable debts, or sign horrifically progressive loan agreements in which the principal of the debt exists insulated by escalating interest charges.

The profits from this interest were greedily clamored for by investment banks and the lenders they gambled on. This profit has now evaporated.

The American financial markets and lending institutions are at the epicenter of a coming disaster, but in some ways they are only symptoms of the central disease:

…they have no money because the people they make money from, have no money.

The implosions of Bear Stearns, CountryWide, Fannie May, Freddie Mac, Lehman Brothers and now AIG are history making business failures, don’t let anyone tell you differently. Books will be written about it. These wipeouts are only the beginning…
As of September 19, 2008, it’s all being profiled as a financial collapse in the media, but soon it will metastasize into an undeniable “economic” collapse, a socio-economic collapse that will affect every man, woman and child… Why? -because it had always been a socio-economic collapse to begin with. Now that the lending institutions are failing, politicians are finally worrying about the average debtor, the rank-and-file human being at the start and at the end of this disaster: the jobless; the uninsured; the working poor; the overextended middle-class; and everyone who paid more than they should have to these financial institutions and lenders for homes that were either overvalued or predatorily financed.
The funny thing is, not only is the public ripped off by banks, not only is the public losing its money at the other end as more retirement plans depend on funds and 401Ks but the taxpaying people of this country are also going to bail the biggest of the market disasters out.
This used to be called, “getting screwed coming and going”. The government calls it “being responsible”.

I want someone, anyone, to explain to me how it is that these giant lenders and investment banks can collect all of the money and profits from their predatory lending but pass on the losses to the taxpayers. It’s criminal.

Filmmaker Patrick Creadon directed a documentary called I.O.U.S.A. that was in the official 2008 competition at the Sundance Film Festival. It’s a documentary that tracks David Walker, an important man I’d never heard of, unknown to anyone I know, even among the people who actually follow politics and government closely. Mr. Walker was the U.S. Comptroller General. Think of him as the one man ultimately responsible for watching federal public spending. Yeah, there’s actually a guy for that in America, and nobody knows who he is (He resigned in March 2008). Creadon’s documentary looks at our growing national debt and its consequences for the people and the country. Creadon illustrates how the alarming debts the United States owes to foreign countries are becoming impossible to pay off… sound familiar?

It is what is happening to us individually.

It's where we're going.


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