IT'S ALL YOUR FAULT.
Or, neoliberalism über alles
© 20 FEBRUARY, 2011
by Pirate Joe
Ever since it became obvious Barack Obama would be elected, the propaganda arm of the ruling class has been pounding the same lies into our heads. Over and over and over. The basic summary:
Wall Street, AIG, Bear-Stearns, Lehman Brothers, Enron, Free-market capitalism, two useless wars, deregulation, globalisation, free-trade agreements, sub-prime mortgages, bailouts, derivatives and the ruling class are not to blame for this economic depression. Rather, it is us, the reckless middle and lower classes, who brought this whole economic crisis on, and it is therefore, our own collective faults.
Really? How many sub-prime mortgages have you granted to anyone? I didn't start the war in Iraq or Afghanistan. Did you? I didn't repackage dud sub-prime mortgages, did you? I didn't get a multi-million dollar bonus, I didn't get any kind of bonus at all, did you? As a matter of fact, all I've gotten is steadily diminishing revenues as the economy crashes. I haven't been bailed out. Have you? Now we're being told that we all have to share the pain. What does that mean? Less food? Less heat? No rights? No unions? Less police protection, and more potholes? Closed schools, continuation of the “Patriot” Act, higher taxes? It is indeed odd: as the beacon of democracy burns ever brighter in the Middle East, we (here in the U.S.A.) have groups demonstrating against hard-won rights and for an authoritarian approach to workers. It is all a blatant, yet quite well done cover-up of the same old story: the ruling class plays, we pay.
One day there was money, then almost overnight there was none. Just where did the money go, anyway? While that will be the subject for the next article, what bugs me now is the glib way we are being told that although the people who caused this depression (let's be honest about it, it is a depression) have gotten multi-million dollar bonuses, we must tighten our belts. The propaganda continues that if only:
a). we had not taken advantage of the financial community's largess and abused the privilege of sub-prime mortgages,
b). the government, with it's accursed Freddy Mac and Fannie Mae had stayed out of the home buying process and let the free market take it's course, and
c). we revived that good old American can-do spirit and eliminated labour unions once and for all, holding our heads high while declaring that we'll take on any 50¢ per day worker in the world and do the job faster, better and cheaper!
d). we would come to our senses and realise that since it is Wall Street, the rich, the ruling class (or whatever else you want to call them) that provide the jobs, the more we tax them the less money they will have available to create those jobs we so desperately need.
Let's spend a moment on just what the ruling class was up against when the crash hit. The “general public” was catching on to the abuses of Wall Street, and resentment of the ruling class was building and about to propel Barack Obama into the White House. The president-to-be was espousing a populist message that was causing the dry bones of the socialistic skeletons in the closet to rise again in the dead of night. Haunted ruling class types were getting little sleep. Once elected, however, Obama kept Tim Geithner, Ben Bernanke (and other conservative types) on, but even that did little to calm jittery nerves. Throughout the mansions of America, translucent white figures with a vaguely human shape were observed moaning a word that sounded horrifyingly like “regulation”. Worse yet, 70% of the American public was demanding health care reform. A Democratic president and congress on the heels of the worst economic crisis since the Great Depression! The ruling classes' worst nightmare! What to do? Well, calm down, and belay that bottle of prozac..Rush Limbaugh, Michael “Savage”, Glen Beck, Lars Larson, Shawn Hannity & company were lined up and ready to go. The first shots were fired: “I hope he (Obama) fails....we have the greatest health care system in the world...health care reform is socialism....how dare congress summon Wall Street bankers to “grovel” before them”. We know the rest. Damage control in full swing. The message became clear: it was really our fault, the union's fault, and the fault of the biggest boogie man of them all: government regulation! The crisis didn't happen because of deregulation, it happened because there are still too many regulations left!
Looking at a, b, c,and d above, you will realise that a little bit of thought will thoroughly dismiss all those specious ideas.
First, let's look at the mortgages. Sub-prime mortgages were created to exploit the land-grab potential of people who couldn't quite qualify for a regular loan. You can't after all, foreclose (that is, grab the property) of someone who doesn't have a mortgage.
The mechanisms were basically 1.) Super-high penalties, including fees and sky-high interest rate hikes for even the slightest slip-up. (and) 2.) High interest rates to begin with. The implied purpose of these was to provide a higher return to the investor(s) for the supposedly higher risk. This loopy logic ignores the basic fact that making repayment more difficult for those who are least able to bear it guarantees failure. Well, you say, why would the Wall Street “banksters”, the alleged “smartest guys in the room” set things up this way? Did they actually want these loans to fail? The short answer is yes, and for two reasons. One, unlike the olden days of the local bank that held your loan right up to the last payment, these loans were designed to be re-packaged and sold, providing some nice interest payments (the profit) before passing the risk down the road to someone else, who would, in turn, do the same thing. Who cares if the mortgage holder eventually defaults? It will be someone else's problem by then. Two, property values were going nowhere but up, so the risk was nil. If it came to foreclosure, just add on more hefty fees, and sell the home. Ever rising home prices would all but guarantee that whatever you jacked up the value of the loan to, it would still be a bargain.
Perhaps the best propaganda coup of all was getting the general American public to believe that this was all their faults, that the borrower was to blame for taking the loan, and that the bank had no responsibility whatever for seeing to it that its potential mortgagee was actually qualified for the loan. Time was when to get a loan from the bank “you had to prove that you didn't need it”. Remember? How did they get to abdicate their responsibility while getting us to (collectively) take the blame? Slick, if you ask me. Would you hand out money to strangers just because they said that they could and would pay you back? I doubt it.
Now for Freddie Mac and Fannie Mae. How many of you out there own (or have owned) your home? O.K., Now, how many of you paid for it in cash? Hmmm... hardly anyone who raised their hand the first time raised it the second time. Pourquoi? The answer is that precious few of us have the money (especially at today's prices) to pay for a home outright. The problem is that many people don't qualify for a mortgage, even though they are paying much more for rent then the mortgage payment would be.
Now it's decision time: do you want to live (and have your children live) in a country where home ownership is an out of reach dream, and where you (and your children) end up paying 25, 30 or even 40% of your (their) income in rent? Do you really want that amount of your income go out the window with never a cent of equity earned to pass on or recoup? Think again: permanent renting serfdom: is that the system you really want?
Liberals in government didn't think so, therefore they created this mechanism to make it a little easier for you and I to clear the hurdles to home ownership. There are obvious problems with Freddy and Fannie; let's fix them rather than condemn millions of Americans to second-class renting serfdom. By the way, the government is “insured” by the value of the property.
Now for a reading from the bible according to Ayn Rand, Glenn Beck, Michael “Savage” and Rush Limbaugh: Labour unions have for well over a century recklessly advanced the cause of worthless, ner'- do-well workers over their proper ruling class masters. To make matters worse, they've re-distributed billions of dollars of ruling class wealth into the hands of the middle and lower classes. For decades, our beleaguered ruling class, those champions of hard work, fair play, creativity and wealth-building could do naught but stand by while mendacious unions savagely stripped them of their rightful wealth, while in the process, depriving them of the incentive they need to create ever bigger industries and the jobs we all need to survive. Every cost of living pay increase, every worker who works less than 16 hours per day and less than seven days per week, every pension plan, medical plan and paid vacation is just another reason why jobs have exited this country en masse. All of those things, by the way, are the work of socialistic unions.
It was only when George H.W. Bush proclaimed the “New World Order” and exclaimed “global, global, we gotta go global” and Bill Clinton signed NAFTA into law, (after he campaigned against it) and continued other Regan-Bush polices, that a glimmer of hope appeared on the ruling class horizon. Now, as I write this, unionists in Wisconsin are demonstrating for the continuation of “collective bargaining” and a host of other left-wing socialist union holy grails. Hopefully, that governor will, in the spirit of Ronald Reagan, fire them all, (remember PATCO?) and show them that, in this global era of competition with overseas workers who make 50¢ per day they need to stop whining and compete! Only when we show the boss that we're willing to compete with that foreign 50¢ per day worker, and only when we can demonstrate that we'll do it better for 49¢ per day will America's factories start humming again! So let's stop whining and start working! Sure, things won't be cushy as they were before, but what's wrong with a 16 hour-per-day, seven day work week? Are you too soft to do an honest day's work?
While we're on the subject, don't grumble when you pass the boss' opulent mansion on your way to work, instead, you should feel a sense of pride: pride in the knowledge that it was the huge profits he earned off your (now) cheap labour that helped him buy it. Pride in the global economy that brought the value of your labour down to a fair, competitive level. And pride in the fact that you are no longer a unionised parasite to the paragons of production! Don't feel rage when you hear of enormous bonuses paid to Wall Street tycoons; instead, write your congressman to let him or her know that you want no law or regulation passed that would eliminate or diminish them in any way, this way you'll know that if you have the guts, gumption and brains to work yourself up from that 16 hour a day job to a corner office suite on Wall Street, a multi-million dollar bonus will be waiting there for you, too.
Finally, this tax the rich stuff: Why do you want to deny our ruling class benefactors the incentives they need to get us all working again? Don't you know that every dollar you tax away from the ruling class is just another dollar that won't go towards a worker's salary?(actually, at 49¢ per day, that's two workers for a day with two cents change!) Haven't John Boehner and Rush Limbaugh told you enough times already? Isn't it logical that if reducing taxes on the rich will create some jobs, that eliminating taxes (for the rich) would zero out the unemployment rate? Instead of campaigning to “tax the rich”, we should be imploring our lawmakers to eliminate taxes on the rich altogether. It's simple: they give us jobs, and in return, we'll pay the taxes.
Hold on, I hear the 'phone ringing.....Yes, ..(oh, it's Rush Limbaugh!..). What's that Rush? Oh, O.K. Sure, right. 'Bye.. He said that it's about time, but that I've finally gotten it right. Oh, I almost forgot: I've got a great bridge for sale: the toll collections will pay off the entire asking price in just two months! Not only that....