The US Financial Crisis: It's Only Money

I wanted to write a thoughtful post about the current US “Financial Crisis.” It’s all the news wants to talk about these days. I found I didn’t quite have the understanding I wanted, and so I tried to do some research. This just made me feel like an idiot. You want to know the real reason no one in charge of anything did anything to stop what’s going on right now? It’s because those in the industry have filled the air with so much double talk and nonsensical weirdness that it’s impossible even for someone like me (who, not to brag, is a member of MENSA, and thus am not used to being completely befuddled by technical jibber-jabber) to make any sense of it.

The gist? All this appears to come from the “subprime mortgage market.” People took on way more debt than they could ever pay off in order to own their own home, because we’re supposed to have “an ownership society.” I think that may originally be Bush’s phrase. These people of course defaulted on their loans quite a bit of the time. Why they were given the credit in the first place, no one seems to be able to explain. Many of these homes were foreclosed. Other mortgages were picked up by finance firms, who through some strange bit of chicanery seemed to think they were worth something. No one can explain this part to me, either. Part of the reason they could do this was government deregulation that the Republicans have been pushing for years.

Now these firms are failing. Big insurance firms like AIG are failing too. The upshot is we’re theoretically on the verge of a spiral where it will become harder and harder to get credit, people will lose their homes, the stock market will plunge, and those whose retirements are based in the stock market will lose their money…

So the White House has decided that the solution is to use $700 Billion (along with a strange package of demands involving lack of oversight that, again, don’t make sense) that we don’t actually have to buy the “bad debt” that the financial firms apparently thought was worth something as a “bail out.” The obvious problem with this, besides the price tag, is the fact that all it does is perpetuate the status quo, which is how we got here…

I don’t want to give this topic more space than I think it deserves, because honestly I think it’s being overblown. A few times recently people have looked at me strange when I used the phrase “It’s only money.” I have trouble getting worked up over financial matters. In any case, this isn’t why I made this blog. But it feels like Bush wants to railroad us into something, like Iraq all over again, that makes no sense. I feel like I’m using that phrase a lot. At the very least, I need somebody to sit down and explain this to me, slowly, in words that have set definitions, before I agree to it. Congressmen say their offices are getting deluged with calls, and those calls are 90 to 1 against.

I can tell you one thing. The way to “prevent a financial panic” is not to go on television and tell us the sky is falling, the way the President did last night. One more thing that makes no sense.