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The Biggest Swindle in US history 6/3/2011 10:52:14 AM
How corporate America and the Republican party got us into this pickle.
When I moved to Little Falls, Minnesota, in 1994, I purchased a fixer-upper for $35,500. The tax guys appraised it at even less. A few years later my neighbor sold his house for $67,000, and it was in worse shape than mine. It became apparent why he got so much later when the housing boom started. Here’s my theory. Mortgage brokers, banks, real estate agents, and construction companies (the big boys, not you little wieners) were tired of low interest rates. They couldn’t even screw people effectively with their points system. And so they got together (It’s called collusion, and it’s against the law) and decided to flip houses (appraise them at higher prices than they’re actually worth). What the heck, the government can’t arrest everybody, can they? They’re certainly not going after the banks who fouled up the mortgage papers on foreclosure notices, are they? If they do, we’re sink into a recession faster than Tarzan wading through quicksand. That was when a one bedroom in Little Falls, Minnesota, suddenly became worth $100,000. Small towns used to be a different market, especially if they didn’t have a lot of industry. When I applied for a teaching job in Hendricks, Minnesota in 1982, the principal told me I could rent a house (a frickin’ house!) for a hundred dollars a month. I almost took the job on the spot because of the house. I was paying something like $250 a month for an apartment in the St. Cloud area at the time.
And collusion wasn’t the worst part. There’s this thing called a variable interest rate. The bastards weren’t satisfied with eight percent or whatever it was at the time. They didn’t want to commit to a thirty year mortgage with such a low interest rate. They were pretty sure the interest rate would go up, and sure enough, it did. If you were anything like me when I purchased my first house (before the one in Little Falls) you wanted it so bad you would have agreed to put up your first child as collateral. Besides you didn’t really know how variable interest rates worked. So now you’re stuck with a house that’s not worth what you paid for it and you’re ultimately going to pay a higher payment when the interest rates go up. Do I need to point out the obvious? The idea is to make sure you suckers never pay off that loan. You will pay those mortgages for the rest of your lives, boobies! Then along comes the burst bubble which everybody with a half of a brain knew was coming (Except George W. Bush and Dick “No bids for Halliburton” Cheney). And the value of your house (which your parents used to get equity on) is now worth less than you paid for it. Those who owned mini-mansions just took off, defaulting on their loans. They weren’t worried about any stinking credit rating. The rest didn’t know whether to shit or go blind. As my favorite comedian Lewis Black would say, AND THE GODDAMN F**KING BANKS REFUSED TO RENEGOTIATE THE LOANS ON MONEY THAT WAS NEVER THERE IN THE FIRST PLACE!
Wait, there’s more. Some mathematician someplace came up with this idea that if you chopped up these bad loans and put them with chopped up good loans, you could sell them as a hedge against a bad stock market. That guy should be boiled in oil, fished out and hanged, revived, skinned alive, then drawn and quartered. The big banks like Goldman Sachs insured these “derivatives” with the giant insurance agency AIG and when the housing market took a dive, AIG owed them billions for selling worthless stocks. They were too big to fail, unless you wanted a world wide recession, because Wall Street was busily selling derivatives to practically everybody, except China, who now has a two trillion dollar reserve to loan us. The Republican Party would have you believe that this was all the democrats’ fault, that Fannie Mae and Freddie Mac were making loans to poor people who couldn’t afford to buy houses. But George W. Bush, with the encouragement of Sidney Greespan Federal Reserve Board Chairman, signed legislation making it easier for people to get a federally guaranteed housing loan. They know this; they’re just counting on clueless conservative voters believing everything they say.
Meanwhile mortgage brokers and banks were selling houses to practically anybody who wanted one, and handing out bonuses to their sales people for doing it. And then KABOOM! Humpty fell off the wall, and here we are. It took a TARP bailout and a 700 billion dollar stimulus program to prevent a depression that would have made the Great Depression look like a church picnic. Cue Lewis Black: AND THE AMERICAN PEOPLE BLAMED OBAMA FOR THE HUGE DEFICIT AND THE NATIONAL DEBT, 80 PERCENT OF WHICH WAS INCURRED BY REAGAN AND THE TWO BUSHES!
When will independent voters realize that the modern Republican party is not your father’s Republican party. The John Birch Society used to be anathema to even Republicans. Lyndon LaRoche was a certifiable lunatic (Today, he’s Ron and Rand Paul’s mentor). When you vote for a Republican you’re voting for the same people who thought that the derivative algorithm was a good idea. You’re voting against yourself.
