In the conservative paradise, a nation of strong, hard-working individuals borrow responsibly and save for future needs. They don’t need government telling them how to manage their money. If they do foolish things, they pay the price.
I like that vision, but it has little to do with the world we live in. In the world we live in, hucksters (including some of the finest names in U.S. finance) take good Americans to the cleaners. This has been going on since the start of the Republic. If some of the world’s most sophisticated investors could fall for Bernie Madoff’s con, imagine how easy it was for slick salesmen to lure honest people into predatory loans or fake investments.
So the conservative argument that the market punishes the careless, the lazy and the overconfident is only partly right. And what about the truly innocent bystanders, the ones in no money trouble who must cope with the resulting sick economy and pay the costs of the cleanup?
Strong financial regulation protects us all. The reform legislation in Washington is almost a done deal. (It will soon head to the rule-making federal agencies, where a lobbyist army is waiting to influence the results.) A new Consumer Financial Protection Bureau is supposed to erect a wall between the yeomanry and the more evil financial products.
Rep. Jeb Hensarling, a Texas Republican involved in negotiating the reform bill, complains that the new bureau would “take choices away from consumers and choke desperately needed credit out of our economy.”
As long as the rest of us have to pick up after Americans’ bad choices, we should have no problem limiting the menu. People of modest means should not be able to take out a no-money-down, $300,000 mortgage with a tiny teaser intro rate that explodes in their faces after a few years.
As for concern about choking off needed credit, has Congressman Hensarling looked at the mortgage market lately? It’s pretty much gone for all but the most sterling credit risks. Had a consumer protection agency put some brakes on the housing madness, the real-estate market would be in far better shape today, and there’d be a lot more mortgage money around.
Hensarling is hardly alone in preferring a free-market fairy tale to the harsh realities here on earth. Like many other “conservative” members of Congress, he voted against the bank bailout, letting his colleagues do the heavy lifting. The bailout disgusted everyone, but it stopped a financial collapse. Politicians who argue that it wasn’t necessary are like the guy who lets someone else put out a fire in his house, then says it would have eventually gone out on its own.
And spare us the phantasmagoria of a financially savvy public. Yes, some got into trouble because they were greedy or too lazy to read their contracts. But America’s supreme economic authorities — including the chairman of the Federal Reserve Bank — had downplayed the risky nature of their ventures.
Protecting consumers is, of course, only part of the financial overhaul legislation. Importantly, the bill seeks to stop banks from gambling with deposits backed by the taxpayers.
Future legislation will have to deal with the monster twins, Fannie Mae and Freddie Mac. These two companies helped create the housing bubble by pairing cheesy mortgages with virtual taxpayer guarantees. They are essential right now to holding up today’s fragile housing market, unfortunately.
As we survey today’s crumpled landscape of mass foreclosures, rampant debt and financial fraud, the notion of a citizenry equipped to prudently manage their money without government regulation is lovely but utterly off the wall. That heaven will have to wait a good long time.
Copyright 2010 The Providence Journal Co. Distributed by Creators.com
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy