Shades of 1929.
While the financial markets are involved in daily triple-digit fluctuations, major financial services companies are in danger of going under or being bought at fire sale prices, and economic statistics and Federal Reserve actions unseen since the Great Depression are being reported, the President of the United States is in front of the public saying that everything is fine. The State of the Union is strong. The danger is in over-correcting, like the proverbial pickup being driven through a “rough patch” and we don’t want to “end up in the ditch.”
At least Herbert Hoover could utter an educated, well-parsed phrase.
He ended up being just as wrong, just as short-sighted, and just as reviled by history as this president will be for being so insulated in his wealthy, privileged world that he had no clue that gasoline would soon reach $4 per gallon. “Really?”
The housing/financial mess was caused by a lack of oversight and regulation. Pure and simple. Each time I hear an explanation of mortgage-backed equity instruments, and how we got to this point, I’m reminded of the fictional Gordon Gekko’s mantra, “Greed is good.” Lots of people made lots of money, and most of them have gotten their golden parachutes and are no longer to be seen. We’re left cleaning up the mess while the buffoon in the White House (and his Republican clone campaigning to replace him) continues to assert that the least action is the best action.
There needs to be federal licensing and regulation of mortgage brokers, strict oversight of lending practices and the information given to prospective borrowers, and a revival of the Depression-era home loan bank so that the government can buy out the mortgages of people who were duped, lied to, or otherwise abused by the system and are now in danger of losing their homes. Let’s let the government rely on the strength and honesty of the working poor and middle class for a change, instead upon the greed and avarice of the upper 1%.