MahaBlog is recommending an article from the current print edition of Harpers called Infinite Debt by Thomas Geoghegan ,
What is history, really, but a turf war between manufacturing, labor and the banks? In the United States, we shrank manufacturing. We got rid of labor. Now it’s just the banks.
Which is why the middle class is shrinking. Basically, we’re all waiters now; we’re bowing and scraping and working for the banks.
There is more at the link, but I was hoping to find a larger snip at the on-line edition. I came up empty, but did find this article, Americans Unwilling to Face Reality – which echoes some related sentiments.
It’s not as though no one saw it coming. Here’s the economist Michael Hudson, writing in the May 2006 issue of Harper’s Magazine: “The reality is that, although home ownership may be a wise choice for many people, this particular real-estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests…. The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.”
Other commentators, including Warren Buffet, said similar things about the derivatives market. He was prescient, but hardly anybody listened. Americans, perhaps even more than other people, have difficulty embracing the concept of “reality.”
The part of derivatives trading in the financial sector and its part in the housing/financial crisis should have become the moon orbits the earth matter of fact by now. No. Just this weekend, a nice guy that sounded like he could be one of relatives called in to C-Span to declare that poor people are to blame for buying houses they could not afford. Certainly over the last quarter century many Americans that would have been better off renting, bought that white picket fence fantasy, they were hardly to blame for trashing the economy. Its like a puzzle where the Right is forcing some pieces into place that are not remotely related to reality. Everyone from O’Reilly to Malkin to Limbaugh are saying the total aggregate buying power of the lowest income Americans has been the pillars on which the entire economy rest.
On CNN’s State of the Union, host John King did not challenge former Vice President Dick Cheney’s false claim that the Bush administration tried “to impose reforms on Fannie Mae and Freddie Mac, and we ran into a stone wall on Capitol Hill in the form of the chairmen and — of the Banking Committee in the House and the Senate, Barney Frank and Chris Dodd.” In fact, Frank and Dodd were not “chairmen” until 2007, after which time Congress passed oversight legislation of Fannie and Freddie.
Poor people destroyed the economy is only part of the myth the Right continues to regurgitate. They had help from Frank and Dodd. In other ironic news, the Right’s ‘tea parties’ in conjunction with the bonus fiasco at AIG may provide the political prod needed for the Obama administration to partly national AIG and a few banks. Doing so will leave the Right with one less major talking point in their late to the party concern about fiscal responsibility. Plus Obama could claim that he started the nationalization partly out of concerns from Conservatives.