Why Was Our Country's Current Economic Situation Allowed to Happen?

I was sitting in a class I'm taking today and during our break a co-worker and I who are taking the class together started talking to the two ladies behind us, also taking the class obviously. One of the women works for a real estate brokerage firm. She starts telling us about all the shady practices that had started going on only few years ago (she's been in the business for 25 years) that she firmly believes got us into this mess.

She tells us how they purposefully falsified numbers (income, etc.) in order to approve a client for a home loan whether they could afford it or not. They also had a don't ask, don't tell policy meaning a client could overstate their income for any given year and the lender wouldn't even ask for documentation to back it up. She'd seen some people who had filed multiple bankruptcies receive a home loan. If someone couldn't afford a down payment then the lender would "put up" the money for them but would falsify a document saying that they received the loan from a family member, adding even more debt to the loan.

This all blew me away. She then made the connection that this made the construction and housing industries boom. Creating more jobs and whatnot making it look like the economy was just peachy. This, of course, also created the housing bubble. Suddenly all these people who otherwise wouldn't have been able to own a home were buying houses left and right. It was ALL artificial. Every last bit of it.

So I'm sitting here wondering why all this was allowed to happen. I mean, what she was talking about couldn't have been an isolated incident to just our area. This had to have been going on all across the country. That's why people all across the country are losing their homes.

Then you think further down the line and realize that these banks that are crashing and asking for government handouts had to have known for quite awhile that they were going under. You don't just all of a sudden wake up one day and go, "Oh crap. My company is suddenly not doing too well". There's such a thing as balance sheets, profit and loss statements, assets, etc. At some point they had to have known that all this was catching up to them (let alone having to know that eventually it WOULD catch up to them) but they just kept giving away money to people who most obviously would never afford to pay the loans back.

As if almost by fate, when I got onto the net and hit my Stumble button the very first that came up was a short essay about this crisis.

Stubborn Ignorance

Source

Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk "no doc" and "liar loans," in order to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers but housing prices began to fall, leaving some people with negative home equity and banks in trouble.

Pretty crazy how it reiterated everything I was just told by this woman just hours ago.

Now we have congress giving obscene amounts of money to these companies that should have to accept the consequences of their actions. Are you really going to tell me that it wasn't their fault they are in the situation they are in?? Are you going to tell me there's no way they could've easily seen what would happen if they continued these shoddy practices?

The government has now given out almost $300 BILLION dollars to these companies. Where do you think that money came from?? Hmmm...I don't know...as a guest speaker on NPR said this morning on a radio show "Presto Chango!" The Fed just printed up the money. We have nothing to back that up. This is putting us out EVEN FURTHER.

Then I had to sit there, on my way to this same class I had this enlightening conversation, and listen to multiple people call into the show and ask the exact same question, "Where was MY handout when my small business went out of business because I couldn't afford the high price of gas. The high taxes. The rising cost of goods? WHERE'S MY HANDOUT."

I have to admit, I cried. This was ridiculous. Why is this happening and why did they LET it happen?

I guess this is mostly just a rant and vent. But hopefully someone can help explain the situation more. I just can't accept that they had no idea something like this could happen. And if that's the case, why would they let it happen?

Bush, Septembers, and disaster go hand in hand now don't they?

Of coarse it was meant to happen!

I wonder if this is how the US is going to justify us "becoming" members of the NAU and accepting the AMERO since it might have a stronger buying power...

it was such a nice illusion while it lasted though, wasn't it??

I still say they the whole thing was planned and orchestrated at the top, so well.....what can I say, it was allowed because that was what the powers that be wanted.
they wanted a population so set into an illusion, they wouldn't have any idea what hit them when the thing started crashing.

just be glad that bush never made it far with his social security reform and personal accounts...or that money would have been frittered away also.
of course, it's been frittered away anyways, but well....at least it wasn't the way they wanted it to go.

[edit on 17-9-2008 by dawnstar]

reply to post by nunya13


This is the NEOCON doctrine. Actively undermine the government, therefore do what you can to take the government out of the picture. You can read a whole lot on these folks - BUSH and friends. This is a result of the NEOCON attitude and beliefs...
It sounds far fetched, but if the captain of the ship hates the idea of the helm, things will happen.

Mccain

They made a decision a few decades ago to step up there bid to make america take over the world. Its bankrupted usa.

What can you do other than just through more cash at it which makes it worse.

reply to post by mental modulator


I did think of this. But what I don't understand is how can all these lenders be in on it. Or do you think it's just the employees "following orders".

"You do your job how we tell you to do it and if you don't your fired. And if you do in fact do it how we tell you to, you'll make a bunch of money off commission so really there's nothing to complain about here."

I guess this would make more sense.

It reminds me of the conversation I was having with someone I had just met. We started talking about martial law and I was saying how the only way that could happen is if the government knew for sure that the military and other law enforcement were completely on board with what's going on. Then that led me to the thought of "just following orders".

It's so ingrained into everybody to do what they are told by the higher ups. "Respect authority" is the mantra. And maybe that was the first step all along. Convince everyone not to question authority and those who are too ignorant to second guess that will fall right in line with whatever we do. And the people who might second guess it at first will eventually conclude that the authorities only have their best interests at heart. They can do no harm. (ergo...why people think policemen, militarymen, religious leaders, government officials are inherently good)

Then, for those who second guess this and realize what a farse it is--well...we'll just put them on a list so we can keep a close eye on them and take necessary action when it hits the fan.


Sorry for the thought train but I had to put it out there...

This would make perfect sense.

So we may have already established that this was allowed to happen.

Logically, the next step is to answer why it was made to happen and I'm sure most would mention "New Word Order" which is plausible.

Which leads to who and as you mentioned, MM, that would be the Neocons (though they are just one small faction)

Next is to answer 'how'. That is where I got stuck. but now I understand perfectly.

This gives credence to people talking about how they are trying to dumb us down. To brainwash us into not being able to think for ourselves. Because if your too dumb to think for your self and if you have been conditioned to "respect authority" then you're not going to be a problem for them at all and you will have helped to facilitate their agenda.

All we have to answer now is when. Even though things have been put into place over the years to allow it to happen, I think we've just witnessed the very beginning of the major turning point that will bring their agenda to fruition.

But honestly, this doesn't mean we're doomed.

I have the utmost faith in humanity that we will not let this happen. We may get a bit too far down this road before we turn back, but eventually we will look at the map and realize the directions we took at that fork in the road were WAY off.

the top of the economic food chain was feeding off the bottom (90%) of the pyramid

the system has been working wonderful and not ("failed") for the top 10 %.

the problem is the economy morphed into a ponzi scheme where more and more debt needed to be created to keep "the ship afloat". This happened due to greed and because there is a revolving door between those that guard the private $$ intrests and those that supposedly guard the public interests. This allowed private interests to bribe /lobby more an more until they had washington politicians in THEIR POCKETS! the creditors are now having challenges creating the debt and the debtors are having more difficulty servicing there outstanding debt , especially as inflated house prices go down. This is why the financial system is having a seizure.

The FIRE sector (finance , insurance, Real estate) lobbyists have gained more and more control of washington politicians thru $$ donations and gained more and more favorable tax %'s as well as deregulatory influences. this has occured over decades and co-incided with the contraction of the productive sector (industrial) Any time you have fractional reserve lending and debt (at interest) as the backbone of an economy it will end UGLY! The only question is when, combine this with the fact this perspective will not be told on TV nor found in the financial books studied at the economic classes in college schools which are benefits of the endowements bestowed on them by the FIRE sector beneficiary's and you end with a lot of BS from the top 10 percent ( who love to blame it on failed economic "models") and a bunch of clue less genearlly good people who get taken for a ride. As those who just F*&*E$ them usually get more and more power as the system goes down.

History generally shows that the governments will cover the wealthy sectors blunders with public taxpayer money on an increasing basis.

Due to this country's dependance on credit and the service sector when the upper class starts getting pinched bad, the REAL DEPRESSION may take hold. this is a process not an event.

The likely way out or onward will be a massive gov't work program related to "clean technology". The country may never reach the same standard of living for the average person, but many indivuals should have more than enough to get a decent living. You may want to take this advice related to education in the field of clean technology or building connections in this field. this is the most likely future path IMO

[edit on 17-9-2008 by cpdaman]

reply to post by nunya13

That what you describe was a consequence of lenders competing for the dough. They lived in virtually risk free environment: Companies, like AIG, would insure the loans against defaults, and if the sh-t would hit the fan, as it happened, the government would extend its helping hand, as it happened.

But it was essentially AMR that fluctuates according to the various economic indexes that primarily contributed to the massive amount of foreclosures. Former chairman of the US Federal Reserve Alan Greenspan sort of blamed himself for not being able to see the consequences of rather optimistic interest rate. He knew about the "irrational exuberance" on the part of the lenders some four years ago. However, the White House loved the ride so did the American people, and Alan loved his job.

The debt incurred by the bailouts can be extended on many generations to come, so the folks born in 2050 will chip in.

Look, if you know that you can't afford a house and Mr. Washington Mutual shows you that you actually can by looking the other way when you falsify your income on the application, then it's hard to blame the "financial department" alone, is it? For the people, by the people.

It's not that bad. Americans could use the rice & bean diet that they prescribed to themselves to lose some weight.