The Mortgage Crisis for Beginners

June 24, 2008 at 7:47 am · Filed under Read All About It, posted by pfm

Our favorite radio show, This American Life, recently did a hour show examining the current mortgage crisis— the straw that broke the camel’s back and triggered a global financial crisis, the end of which is nowhere in sight. As the U.S. stumbles forward deeper and deeper into a recession, it would behoove those of us who don’t understand what has happened to take a minute to learn about the economic process—which was truly not a major aberration from business as usual—behind the credit collapse that has many economists warning of a new economic depression.

As usual, TAL makes the dry subject matter absolutely fascinating and entertaining, interviewing victims and perpetrators at every level of the travesty, and as they say:

We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.

Listen to the show here, for free, by clicking on the ‘Full Episode’ link. For those looking for more details, another radio favorite of ours, Fresh Air, has some more perspectives here, and here. And of course, Wikipedia comes through with 12,000 words on the subject.

peacechicken said,

June 27, 2008 @ 12:16 pm

To truly understand the mortgage crisis, it’s vitally important to understand the unconstitutional Federal Reserve system and how it keeps every American (and our government) in slavery. News stories never fail to expand on how The Fed. and our ridiculous monetary policy is truly responsible for this problem. If people had listened to Ron Paul decades ago, this could easily have been prevented.

It’s long past time to educate ourselves on basic economics, abolish the Federal Reserve system, and gradually return our country to a fiscally responsible gold standard and allow competing currencies.

Otherwise, we’re merely chopping single tentacles off a very large octopus that will only grow more.

http://www.AbolishTheFederalReserve.com

pfm said,

June 27, 2008 @ 3:25 pm

To say if people had listened to Ron Paul (I just threw-up in my mouth a lot) that this specific crisis could have been avoided is kind of disingenuous and broad. I could say with equal correctness that if people had listened to Bakunin a century ago none of this would have happened either. Both statements miss the point.

This particular instance really had very little to do with the Federal Reserve, and a lot to do with all of the stuff mentioned in the links above. In fact, most criticism from the whole gamut of economists was that the Fed, in this instance, didn’t do ANYTHING to stop this from happening, i.e. they weren’t regulating enough, and weren’t really involved. I’m not trying to steal your anti-Federal Reserve thunder, which is certainly warranted, but it hurts your cause when you blame them for things they weren’t really involved in. If you want to continue to insist their involvement please provide some specifics and show how these were an aberration from the norm–since this crisis is not the norm (a whole other, much larger economic crisis is the norm, of course).

ChestPain said,

June 28, 2008 @ 10:32 am

Regarding the inflation and recession, the rising prices obviously attack wages. These high prices are probably paying for the war in Iraq because inflation is a common way to pay for wars, but high prices are also rumored to help wasteful businesses. Since those are supposed to be the best jobs, inflation can be helpful to those workers. Since wages fall indirectly, repayments also fall, so the finance industry grows. When industries grow, employment grows, so the bourgeoisie is ultimately buying social peace and thereby showing its weakened condition. Recession is a slow down in the growth of total commodity production, and this is actually a good thing for the proletariat.

deanosor said,

July 21, 2008 @ 9:34 pm

To say that “our government” is kept in slavery by the Federal Reserve system is ludicrous, and it’s even more ludicrous to say it on an anarchist website. First of all: governments can not be held in slavery; only people can be put into slavery. “Government” is an abstract idea put together by certain people in order to enslave us. 2nd of all: the Federal Reserve System is a public/private collaboration between the large banks and the government. It is the central bank of the U.S. It is, in effect, one part of the govenment like the FBI orn Homeland security. It is the way the govenrment has control ofthe money system of the United states, besides the fact that they print all the “Federal Reserve Notes” otherwise known as dollar bills. Now how can something as connected to the govenemnt put the government in slavery. Government itself is the problem. The Fed is one part of that problem because it is connected to the government. 3: It’s not “our government”. Its a govenremnt run by large cpatialists and bureaucrats. 4. Who cares if The Fed is unconstitutional! We should be for destroying the Constiuttion and its system of exploitation and repression. Leave the constiututional arguments to the ACLU and other lawyers. Anaarchist activists, which is who this site is designed for, are for destroying the repressive machine, not making it better.

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