The republican platform of give more to the rich so that they can trickle down wealth is also to blame. Democrats who didn't speak out loud enough are also to blame.
Under-regulated lenders who gave people money for a house they couldn't afford --blame. But the financial catastrophe also has been caused by Americans trying to keep up with the Joneses (not realizing the Joneses could barely keep up with themselves) and feeling entitled to a house. A standard has been set and too many people have tried to live up to it. Who set the standard? Wall Street and corporate America.
We fell for it.
If we didn't have easy credit, fewer people would have a house and our economy wouldn't have been a house of cards. We would've been able to see the economy for what it was -- too much wealth concentrated at the top, not being trickled down. We would've been able to see how little buying power the middle class actually had. We could've then made real change, as Obama might say.
But that fact was hidden because people were able to buy a house they couldn't afford and they could take out lines of equity on those homes and buy lots of stuff. That helped enrich the rich, which is why the Bush administration didn't care. As long as wealth was being created at the top, it didn't matter. The creation of wealth in the middle was just a charade.
Americans are in serious credit card debt and that debt is likely to grow as more people lose their houses and their jobs.
The poor and middle class need the opportunity to create REAL wealth -- not pretend -- via a vastly improved education system that values science and math, art and music, and meeting the basic need of healthcare. These are the things Obama talks about.
When a health issue puts a family at risk of bankruptcy, that's not a path to wealth. Why is it that so few of us can afford healthcare? That concludes my economic rant of the day.
Thomas Friedman, columnist for the NYT, talks about the importance ramping up a green revolution to build the economy and create REAL wealth.
In a green economy, we would rely less on credit from foreigners “and more on creativity from Americans,” argued Van Jones, president of Green for All, and author of the forthcoming “The Green Collar Economy.” “It’s time to stop borrowing and start building. America’s No. 1 resource is not oil or mortgages. Our No. 1 resource is our people. Let’s put people back to work — retrofitting and repowering America. ... You can’t base a national economy on credit cards. But you can base it on solar panels, wind turbines, smart biofuels and a massive program to weatherize every building and home in America.”
NYT: Yes, this bailout is necessary. This is a credit crisis, and credit crises involve a breakdown in confidence that leads to no one lending to anyone. You don’t fool around with a credit crisis. You have to overwhelm it with capital. Unfortunately, some people who don’t deserve it will be rescued. But, more importantly, those who had nothing to do with it will be spared devastation. You have to save the system.
But that is not the point of this column. The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a “liar loan” from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement. Read the whole story.
Why the bailout is necessary:
Billionaire Warren Buffett told congressional negotiators that if they can't agree on a proposed financial bailout, the nation will face "its biggest financial meltdown in American history," two sources familiar with the talks said.
Warren Buffett told congressional negotiators that failure to act could cause a financial meltdown, sources say.
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Word of Buffett's omen came as House Speaker Nancy Pelosi announced "great progress" in reaching a deal on the White House's proposed $700 billion bailout of the financial system.