The economy is on the fiscal cliff because of the failed policy decisions not to prosecute the banks in addition to how the unscrupulous securitized mortgage business has been handled.
Blaming borrowers for the frauds committed by the banks has eaten away at the core of our society. “Normally, in history,” said Yves, “when lenders were that incompetent, they went bust and that was capitalism. And now instead, we have a system where lenders who are so grossly incompetent that they should have gone bankrupt – are propped up – that’s socialism for the rich.”
Econ4, which is a group of reform minded economists is presenting a series of videos on major topics where it believes our policies are seriously out of whack. From their mission statement:
The economic crisis we face today is not only a crisis of the economy. It is also a crisis of economics. The free-market fundamentalism that attained ideological dominance in the final decades of the 20th century has been discredited by financial collapse, global imbalances, mass unemployment, and environmental degradation. To confront these challenges, we need an economics for the 21st century.
It is time to level the playing field. Between the rigged LIBOR, the HAMP Hell, the fraudulent assignments of mortgages, the fraudulently robo-signed documents, the shadow banking, the sharing of borrower information and credit score penalties for getting second opinions for loans which borders on – if not outright – antitrust…it’s safe to say that the Administration and Congressional policy decisions are a bust.
There are 14 million vacant American homes. 84 million+ mortgages were processed between 2003-2008, the majority of which are underwater. This crisis and it’s bank frauds have melted our country’s financial stability because housing, construction, construction manufacturing and labor were 2 huge (now flattened) tires on the truck of the economy. We have nothing to replace this with and many of the folks in this industry were baby boomers on the brink of their retirement years…now with no equity and no pensions.
Mix in the lost pension and retirement fund investments due to the investments in fraudulent securities and you have an rotten eggnog recipe for the lost funds, lay-offs and not enough money for the inflated mortgage payments or Christmas.
NakedCapitalism continues, “Today another four million or more face the same fate. This devastation was triggered by unscrupulous financiers and exacerbated by government policies that put banker bonuses ahead of homeowner solvency.
Some blame families for foolishly pursuing the American Dream of homeownership. They think government assistance for banks is OK, but homeowners should be left to take “free-market” medicine.
Some claim that the solution for the housing crisis is to extend and pretend, to perpetuate make-believe values on bank balance sheets rather than to modify principal based on real housing prices. These policies may be a dream for bankers, but they’re a nightmare for homeowners. [. . .] We call for immediate return to the rule of law by requiring those who seek to foreclose to demonstrate they have the proper title and rights to do so – with stiff legal penalties if they ignore the law.” [Read more on NakedCapitalism]
As noted in the DeadlyClear post “LOST: Looking for the Canons of Judicial Ethics,” it appears the judiciary has a significant part to play in eroding our rule of law by participating in these failed policies and their decisions to dismiss rather than force the necessary jury trials or referrals for criminal prosecution will only further add to the decay of our society. Maybe it is this “moral degradation will trigger a civil war” that Russian Prof. Igor Panarin was referring to in 2008 when the Wall Street Journal ran the article: As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S.
Just in case it is – wouldn’t we all like to correct it now before any of these predictions come to fruition? Remember, karma…is a bitch.