Wednesday, March 9, 2011

The American way

Somewhere back in the golden days shortly before the boom dropped on the economy, my daughter was convinced she should buy a house. She was tired of paying rent. Never mind that she couldn't afford one - buying a house was an investment! her community could do nothing but grow!

She lived in the house for a few months, until the nasty monthly payments took their toll. Then she was out of her dream house, out of her dream, and out of a whole bunch of money. But the paperwork had been done. The mortgage was off to wherever such mortgages go. I didn't know and didn't much care where the that mortgage went. The episode was over.

Of course, what I didn't know at the time was that the mortgage reached Wall Street, was tossed together with a bunch of other bum mortgages into a mysterious bond package and sold as a solid investment. (Rating agencies like Moody's and Standard and Poor's were apparently contemplating their navels.) And then, more magic: those packages were cut up and resold as derivatives, such as the misleadingly named "collaterized debt obligations." When the junk couldn't be repaid, the market bombed, Wall Street bankers and traders pocketed big money, and other americans paid for the losses, not to mention suffered the monster recession that followed.

Now the Republican House is bent on gutting a new (and weak) reform law. We can't afford it, is the GOP refrain, hiding behind the budget so they don't have to argue that nothing should restrain those rich traders from stealing.

My daughter is renting again. She lost her waitress job when the recession proved too much for her truck-stop employer to survive. I hope she'll ignore most of her rural Western neighbors and refuse to vote Republican in 2012.

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