Do the Collapse
2008.09.21Listen to this excellent wrap-up of the mortgage crisis by This American Life.
LOCAL banks. I repeat: Your local banks got irrationally greedy and stopped functioning they should. They sold bad loans to district branches and then consolidated mortgage brokerage houses. Next, those were sold to fund managers in all areas of the country. Finally, the big financial companies on Wall Street had “rocket scientists” in the back rooms that said, “Sure. We can make those numbers work.” And then these funds were rated grade AAA bonded. These were sold to the global pool of wealth, and everyone got rich and high for the first few years of this century. The rest of this story just played-out last week.
Ultimately, there was no cash on hand, no income at the bottom tiers, and all the risk was concentrated at the top of the chain. But Wall Street was lying; those funds weren’t “good as gold.” The executives were not asleep at the wheel. They knew full well what was going on. They took home the rewards, and their institutions were left to crumble. The rest of us can suffer when the market fell. The Lehman Bros. CEO total compensation came to $17,000 PER HOUR in 2007. What was your take-home?
Yeah, and you’re paying for his “bad judgment.” And the bad judgment of your neighborhood mortgage lender who looked the other way because he could sell the risk to someone else. And your neighbor’s bad judgment for living beyond their means. And our bad judgment for complicity. Will someone with integrity stand-up here?
Everyone said ENRON couldn’t fail because it was it’s own market. It was too big and too complicated. The government would step-in, and investors would be safe. But when they left us holding our dicks in our hands, the only thing the government did was prosecute the tax fraud. No investor was ever made whole. Where’s the money in that?
Maybe we another Depression. A new set of American generations (Gen X, Gen Y, and the set in-between) need to learn how to save their pennies. We need to learn not to trust the “too-good-to-be-true,” and the “irrational-exuberance,” and “the bubbles.” We need to see the greed for what it really is. We need to hold those in charge responsible for their actions. We need to live within our means. We need to demand more rights as shareholders. We need to lower the maximum APR credit thresholds. We need to not give it up so easily to the shiny, the new, the soon-to-be-obsolete.
We need to be outraged.
Yeah, but did you see the new iPhone 3G?! I’m thinking of buying one because I’ve been brainwashed by Apple’s marketing campaign and I agree I’m really not cool until I get one.
No, for real, though, the United States is like Rome with the Barbarians at the gate; oblivious to the destruction at hand because of all the great stuff that lulls us into a false sense of security. I like what this guy wrote:
“It has been observed that nations and empires have “life cycles.” This has been studied by many historians throughout the years and most have come to the same conclusion: a lifetime of about two centuries. And they all seem to go through the same life cycle: “from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to complacency; from complacency to apathy; from apathy to dependency; from dependence back again into bondage (Alexander Tyler, 1750).
“Where are we in this cycle? We, too, have gone from bondage to spiritual faith; from faith to great courage which established our precious liberty, which, in turn, has given us unprecedented abundance that has made us the envy of the world. That abundance, however, has led to complacency and apathy. Ask almost anyone, “What is the biggest problem in America? Is it ignorance or is it apathy?” They are likely to answer, “I don’t know and I don’t care!”
“This apathy will ultimately lead to dependency and then return us to the very bondage that this nation was founded to deliver us from.”–SLEEPING IN AMERICA, Koinonia House newsletter
2008.09.22:2:29 am