Barrels of Rotting Anchovies, Jacobins, and the Guillotine

The complexities and severity of the mortgage crisis are only recently coming to light. Here is a SF Chronicle article (via Stryder.com), uncovering the potential criminal liability of banks and loan officers who knowingly foisted sketchy loans upon suckas who thought they could outsmart the market and make a killing by an easy flip. The liability lies, in part, with the banks who didn't do the requisite background checks, knowingly issuing bogus loans only to repackage them in bundles and sell them off as mortgage backed securities ("Barrels of Rotting Anchovies"--thanks Jim Kunstler for the colorful term) to hedge funds and international banks. At least this is the story as I understand it.

What amazes me is the brazenness of Henry Paulson's plan to "freeze" the interest rates for 5 years--a gesture that, as with all things Bush, bear the appearance of populism but really serve the interests of the wealthy elites. Paul Krugman's NY times article of today explains this in detail, as does the Chronicle article.

When one reads about this scandal, one begins to wonder what will be the straw that breaks the camel's back. Some basic statistics will confirm how bad things are getting for the average American worker. The savings rate is below zero--he's borrowing just to make ends meet. Real inflation remains completely underreported as gasoline and food prices have been removed from the books ( a Clinton era Fed manoeuver) as well as the new "chain CPI" (Bernanke era) model which allows substitutions (think the price of the caloric equivalent of Hi-C for OJ). The price of health care grows at 10 or 11% a year, year in and year out. Worker wages have barely kept up even with the underreported inflation. The dollar has been tanking relative to other currencies. Our federal budget deficit has been growing exponentially, soon to eclipse the possibility of getting out from under the mountain of debt that we have accumulated. We are bogged down in a war that the taxpayers and their children are asked to pay for directly into the hands of Blackwater USA, Halliburton, and the rest of the corrupt players in the Iraq conflict. The minimum wage has been frozen for 10 or more years and the recent move to raise it barely even keeps up with inflation. Over the last 20 years--from the time of Bush I to Bush II, the average CEO pay has grown from 107 times the average worker's wage to about 500 times the average worker's wage.

Yes, it is times like these that test men's souls. They must decide, I suppose, whether they will continue to allow themselves to be rolled over and fucked or whether they'll pull out the guillotine and start taking off heads. Oh, whether it is nobler to suffer the slings and arrows of outrageous misfortune or take up arms.... Well, these are the questions we'll need to answer, I suppose.