We recently saw Charles Ferguson’s documentary Inside Job, a painful and painstakingly detailed account of the financial meltdown – or The Great Crash of 2008, as historians will refer to it. Unless, of course, there’s a greater crash coming.
The Stock Market Crash of 1929 got all the attention but the economy wouldn’t hit bottom until three-and-a-half years later.
Let’s see… 2008 + 3 ½ = mid-2011! We’re almost there!!
Except we’re not.
My father bought his house for the equivalent of a year’s income. Raise your hands if the income-to-price ratio on your house matches that. Of course, house values could yet go back down to that level. That’s the good news?
The difference between the 1950s and 2010s is that one was a period of growth, the other a period of… well, guess we’ll find out, won’t we? Historically, the economy grows in inverse relation to the disparity between rich and poor, i.e., the less disparity, the greater the growth (et voila, an expanded “middle class”). Raise your hands again if you think income disparity is shrinking.
And now the rich will have their tax cut. On what planet was that a high priority? Trickledownutopia? But I’m not sure it would’ve done any good for President Obama to hold out at this point. The damage was done and the pattern set much longer ago.
The thing for which angry liberals can legitimately fault the President was his neglect of debtors in the early bailouts. The few consumer protections that came out of that were toothless. The reform limiting exploitative credit card rates is a joke: you now have the option to reject their rate increase – which triggers a reduction on your card limit (usually down to what you owe – effectively cutting off your credit). The 2009 Home Affordable Mortgage Program (HAMP), funded with $72 billion, was designed to keep 3-5 million homeowners in their homes: to date less than half a million applicants have been approved for permanent loan modifications (more than half the temporary mods are cancelled after three months and many more linger in limbo with unpaid debt piling up).
The financial institutions got all they wanted and more – giving only tokens to consumers. Thank you Henry Paulson for blazing the bailout trail that Larry Summers and Tim Geitner followed. Different parties, you say? Watch Ferguson’s documentary and you’ll see that Summers and Geitner have merely been holding the course until Republican reinforcements get there in January with more swell ideas for saving the wealthy from the clutches of the “undeserving poor.”
While Inside Job might want to make you slit your wrists – or some high roller’s throat – consider the possibility that the Right might be right: making the rich richer so they can produce more riches makes us all richer in the end.
Sorta like Mexico.
Raise your hands if you want to move to Mexico.
Hmm, there seem to be a few of you.
Anything and Everything that has Nothing to Do with the Movies
Sometimes, we go to a movie to get away from the world and sometimes we go to see what’s going on in the world. This blog will offer comments on the world, the movies and their occasional overlap.