State/Wall Street Slavery In One Lesson
Follow the steps with me:
One: Push low-interest-rate madness that makes putting money in a bank’s saving account more or less the equivalent of stuffing cash in your mattress and encourages people to turn to higher risk stock market speculation, or, worse, to take comfort in the “increasing equity” in their houses. It also makes Wall Street drunk from cheap credit so that they make horrific gambles using 30-1 leverage.
Two: When the completely foreseeable crash comes, use the public funds that are mostly taxed from the middle class or borrowed in their name in order to rescue Wall Street, especially the riskiest “players.” That way, the people who made the most money during the boom years will get to stay afloat while those didn’t make that kind of money will see what net worth they had vanish into smoke.
Three: Then sit back and watch Wall Street use the money you looted from the middle class and transferred to them to buy up depressed assets in the recession, such as housing. Now, the people who led us into the crash, made the crash happen, and promised we were doing fine, basically become the landlords for the Americans they impoverished.
Do you get the picture?
When I saw the headline, “America Meet Your New Slumlord: Wall Street” at Zero Hedge, I have to admit I was not impressed. Frankly, I think “slumlords” are usually people who provide a service to other people who don’t have enough money to live in a better neighborhood but who don’t want to live I a cardboard box on the street. But, normally, I don’t think of slumlords as people who are given money from the pocket of their tenants so that they have more money to invest in real estate and their potential tenants can no longer afford a home.
That is exactly what is going on here. In fact, it gets even worse according to the Bloomberg article linked by Zero Hedge (and emphasized by the article there).
“‘While leverage is currently limited, potential financing options include secured credit lines, lending syndicates, high-yield debt, government sponsored enterprise-provided financing, and securitization,’ Jade Rahmani, an analyst with Keefe, Bruyette & Woods Inc. in New York, wrote in a note yesterday.”
You have to appreciate the diabolical irony of it all. The cheap credit blew up a bubble in real estate, partially because the new money was directed there by Bush’s as well as Clinton’s policies of getting everyone out of renting and into a home that they owned. Now, that policy has destroyed itself and the people who can no longer afford a home are being taxed and indebted so that a new class of landlord is empowered to become their slumlord tenants.
We were told Wall Street had to be saved in order to save Main Street. Now we see the truth beginning to become clear: The government bailed out Wall Street at Main Streets expense so that Wall Street can now buy out Main Street and then rent it back to us.
Mark Horne has been studying the intersection of ethics and the economy since high school. He was raised in Liberia, West Africa and Kwajalein, Marshall Islands, as well as on the Atlantic coast of Florida. He graduated from Houghton College in 1989 and from Covenant Theological Seminary in 1998. He was ordained in the Presbyterian Church in America and has pastored churches in Washington state and Oklahoma, as well as serving as an assistant pastor in St. Louis.