http://www.youtube.com/watch?v=koY6kXhQDQo&feature=player_embedded
This gent raises some good points around who did and did not benefit from this ongoing fiasco. Apologists for the status quo (ardent crony capitalists, CNBS infotainers etc.) tell us that homeowners are equally responsible for having leveraged their homes to the maximum and otherwise taken too much risk.
All along these same jackass disinformers have been extolling the virtues of the (supply side) capitalist model based on incentives. So I find it a tad hypocritical to blame homeowners for taking advantage of cheap and abundantly available credit which at the height of things was shoved down their throats 24x7. No sooner did they respond to these "incentives" than the entire scheme started unravelling. In any other market, we are told that it is normal behaviour for consumers to respond to low prices by increasing their consumption i.e. the demand curve. Yet, in the case of capital demand, when the price (interest rate) was lowered substantially, we are told that households were foolish for having consumed more debt ! Is the average household now supposed to be a macroeconomic forecaster, able to predict the overall trend in housing prices and interest rates? Meanwhile, I have no doubt that the average economist has lost money via stocks or real estate during this fiasco.
Gut check. Let's review the distribution of impacts so far:
1) Government/Regulators:
Role in fiasco:
-Failure to regulate
-Easing of regulations to accomodate banksters (Glass Steagall repeal)
-Overlooking ongoing deficits and trade imbalances
Retribution: None - business as usual
2) Banksters:
Role in fiasco:
-Extension of credit to those who could not afford it;
-Outright fraud while securitizing garbage loans;
-Over-leveraging of banks
-Insider Trading on a pervasive scale
-Collapsed investment funds, leaving investors holding the bag
-Leading entire economy to brink of disaster
Retribution:
- Massive $10 trillion+ Industry bail out courtesy of Turbo Flat Tax
- Massive bonuses before, during ("retention" bonuses), and after crisis
i.e. business as usual
3) Federal Reserve:
Role in fiasco:
-Lowered interest rates to engineer bogus "recovery" and create incentives for households to borrow way beyond their means;
-Provide leverage to speculators, under-regulate banks
-Turn blind eye to securitization frauds;
-Allow banks to become "too big to fail", requiring massive taxpayer bailouts
Retribution: None. No oversight whatsoever; now via Quantitative Easing finding new ways to increase systemic leverage
4) "Irresponsible" households:
Role in fiasco: Overconsumption, overleverage on housing and other forms of debt
Retribution:
- Foreclosure/loss of personal residence
- Bankruptcy (divorce)
- Fund taxpayer bailout of banksters
- Top Ramen for Christmas dinner
Is this a great fucking system or what?
