LJWorld.com weblogs Loyal Opposition
1984 Whoops 2008
There I was sitting at my desk processing our bills. Off in the corner the TV was showing an interview with Mayor Bloomberg of New York. Something he said caught my attention. His take, paraphrased, was that we are all equally responsible for the financial melt down. We have all been greedy and now we all have to pay the piper.I almost lost my breakfast. Where did that spin come from? With a little research on the web one can find all sorts of data on various government web sites. It tells a very different story.Between 85 and 90% of us that own homes are paying our mortgages as agreed. Yes, there are some people (a million or more, who have lost their jobs) who are victims of what has happened. None of these people contributed to the generation of the mortgage backed securities that became the catalyst for the melt down. So where is the mayor coming from?He mentioned credit card debt. Well the web sites reflect that about the same percentages as above are managing their credit responsibly. On average they have about $2K in debt and seem to be holding it stable. There are a few, wonder if they are the same ones with the mortgage problems, who have substantial outstanding credit, say maybe $20K, and who are having trouble servicing that debt.The matter of savings was mentioned. Yes, we are not the biggest savers in the world. Of course, for most of us just meeting our obligations consumes most of our resources. For the more affluent among us our homes have been our major investment. If we are such poor savers then how could we be demanding the high investment returns that were part of the problem that led to the melt down?Maybe someone out there can help me understand the mayor’s point. Could the mayor be mixing notions of overconsumption that are heralded by some because they are focused on our depredation to the environment? I do not discount the view that we are over-consuming but it does not support the realities of the meltdown. In fact, our consumption drawback may be aggravating it.Could we be once again looking at our leadership elite trying to fractionate the middle class to avoid the significant responsibility they have for what happened? If that is the case it is a clear example of the big “Lie” as we have come to know it. What makes this lie even more despicable is the fact that the middle class is losing the jobs and has seen what savings they have accumulated ravaged by the melt down. The leadership elites, on the other hand, are getting large multi-million dollar severance packages, major pay raises and significant income tax preferences. I would even bet that most of them got out of the market early and avoided major losses to their not inconsequential investments.What am I missing?