Since the rich run things, there's no expectation that they must live up to their commitments even when their debts overwhelm them. The middle class? Bankruptcy is not for them, nor even abandonment of their underwater mortgages.
"They pretend to pay us, and we pretend to work."
Click image for full Tom Toles/Washington Post cartoon.
... couldn't go a millimeter.
Click image for full Elena Steier cartoon, the Queen of Everything.
The AP awakens from its slumber long enough for Matt Apuzzo to slap down the Bushist deregulators and their favored lobbyists at the root of the mortgage crisis:
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown...Careful there, you might commit journalism!
Unregulated mortgage markets cause housing price bubble, which inevitably bursts. Poorer homeowners tighten their spending. Sources of credit can't or won't ease retail through hard times. Stores go belly up, putting more people out of work. Like a spreading illness or a power outage, safety measures that are too weak and too late fail.
Not good.
The picture of retail's financing is interesting and something I didn't know. Sounds a lot like farming.
Does anyone else find this headline weird?
White House to veto foreclosure billLast I looked, the veto power was solely granted by the (former) Constitution to the President. And 'President' has fewer letters than 'White House' anyway.
Here is at least one piece of the supposed synergy between Bank of America and Countrywide. I still wonder whether BoA is also keen to hide its own, separate exposure.
Not surprisingly, lenders and loan servicers are stealing from the very people who are in trouble. Is it any wonder many of the people who lose their homes leave them in less than perfect shape?
It really should not be a surprise that a substantial number of American corporations are thoroughly corrupted by the lust for money. And now, of course, they own both the press and the government, so there are few restraints. Business ethics? Don't make me laugh like Bela Lugosi.
To call the Wall Street Journal editorial page Neanderthal would be a grave insult to Neanderthals. Geico, so easy Paul Gigot can do it.
Today, however, the lead editorial in the Journal says:
Serving as lender of last resort in these conditions is the proper function of central banks.Sounds about right, but it's funny how rich investors deserve interventions in the market to save them from themselves, while the rest of us can go hang when we need something done outside one market or another. Oh, sure, the WSJ frames their opinion in free market terms when arguing against a rate cut - "bring the markets' risk appetites back in line."
Free market advocates are always willing to let the free market work as long as other people are the ones suffering.
Update: Quentin Hardy, you go, boy!There are no firewalls in the residential mortgage market. Subprime lender collapses lead to problems up market.
In turn, this artificially adds to the real estate price drag, further deflating a sector that was one of few bright spots in the Bush economy and whose psychological effects on homeowners helped maintain spending. With those effects reversed, there's one more deflationary force in an economy that has massive debt bombs lurking around every corner.
If our huge outstanding note is coming due, the hangover will be painful.
