Wednesday, September 24, 2008

Wait, Why Am I in Debt at All?

Today the President said we have to give $700 billion to Wall Street because if we don't we won't be able to get loans for cars, college and housing.


Why in the Hell do people who work every day need loans to by simple things like cars, education and housing?

Seriously, the real failure here doesn't have anything to do with any capital markets, the failure is that our government allowed an economy to develop where the totally reasonable wishes of everyday workers have been priced to the point where those workers have to go into debt to get them.

Personal transportation, education, housing. Those all strike me as reasonable desires that any person might have. If they perform labor in the service of others on a daily babsis, seems to me like those three things should be givens.

The crisis right now is not a credit crisis, it's a compensation crisis. People who work day in and day out simply shouldn't have to borrow in order to meet basic needs. The problem is that managers and executives take too much and that they pay too little to the people who make the profits.

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At 2:02 PM , Blogger Jon E. said...

There's a lot of truth to what you say, but let's not forget that a lot of this happened because people are greedy and people in this country may be greedier than most. I think, in fact, our country is driven as much by unreasonable desires and expectations as the more legitimate kind.

For every poor SOB (or DOB) who got conned into a balloon mortgage when he or she could have qualified for a safer one, there seem to have been at least one person willing to say, "Sure, I'll say that I make four times as much as I do if that'll get me extra square footage." A lot of Americans have credit card debt because they're buying diapers with next month's money, but a lot of us have it because we wanted to buy a plasma HD TV so that our televised lifestyle porn would become even more enticing than it was in analog.

You're right that we have a compensation crisis because the top 1% of this country suck a way larger portion of the fruits of everybody else's hard work than they do in most other developed nations. But the problem isn't that the top 1% is greedy but that the rest of us are too and we're willing to let them reap all the benefits because we hope one day to win that lottery too. The problem is that a lot of us aren't willing to tax ourselves enough up front to get real benefits from taxation down the road, so we end up paying only enough to keep the current flawed system stumbling along. And, like most greed, it ends up costing us money in the long run.


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