OK here's my question. Did you go to high school? Didn't they teach us all that one of the major causes of the Great Depression was leveraging, buying "on margins": buying stock for a percentage and paying off the rest from sale of the stock at a higher rate, until price slides caused the crash? AND didn't they teach us that we had rules and regulations now that would prevent such a thing from ever happening again? And that our government kept an eye on all that sort of investment? And that we were safe?
So what happened? Wasn't the SEC supposed to regulate speculation? Weren't banks, like stock investments, supposed to be monitored? Weren't bank boards supposed to monitor housing loans? How did we land here again?
I wish I understood better the deregulation that I know has been implemented over time. I know that some of the housing regulatory let-up was designed to make it easier for less affluent Americans to buy homes and ended up making many of these same people vulnerable to predatory lenders. I know that some people simply bought homes they couldn't afford, and banks let them do it. I know that there have been stories about this for years, yet it continued.
I know that regulation has been substantially lifted from our entire market system. I know that our crisis is infecting other countries and taking the global economy with it. That the American consumer has kept our economy strong for years and that now, as consumers lock up their money and cancel their credit cards, that vital tool is fading.
As a US website, America.gov, explained in December:
Goods and services purchased by Americans make up
one-fifth of the global economy, but the third quarter of 2008 saw the
largest drop in consumer spending since 1980.As the financial-market turbulence prompts U.S. households to cut back spending, economies around the globe feel repercussions.
Even after all this time, it's so hard to think about this – about how clear it is now that the deregulation and even the push for an arguably necessary but overdone easing of credit for housing purchases, how between politics and greed, banks lent to many who had no business entering into the debt that has rendered them homeless now. And that doesn't even begin to consider the careless greed of much of the financial community.
Nothing new here.
But I'll bet I'm not the only one whose anger continues to grow, whose frustration continues to grow, whose sadness overpowers. The futures of my honorable, hard-working children and their friends, and the younger ones who come after, are rendered fragile and discouraging. The future of the ideas and principles that were the Obama campaign are endangered by debt and the need to rescue the economy. The debts of the Bush years have eliminated alternatives. And as usual, when politics gets ugly and institutions become careless, the future of those who most rely on government support or protection, the weakest and less established among us, are hurt the most.
If I were my friends PunditMom Joanne or Jill, at Writes Like She Talks, I would have lots of policy citations to back all this up. But this is a piece built more of mourning than reporting. Some days recently, as I think about all this, I can literally feel myself in my seat in AP American History reading about the Great Depression and the checks put into place to prevent its recurrence. I can literally feel myself listening to my parents describe their lives in the 1930's and the permanent scars those years left. And in some ways, I can't believe it, can't believe that carelessness and greed and ignorance and an arrogance beyond describing has threatened us with those times once again.