As we all know by now, the moneylenders bought and sold packages of home loans and sold them to each other as investments. Other parasites bet placed bets on whether or not some struggling worker or small business person would collapse on under strain of the payments and default. John Paulson, hedge fund manager and one of the more successful social parasites made $5 billion in 2007 betting that workers with mortgages would be crushed under the weight of the payments and default.
The language used to describe their activity reveals how inhuman these people are. The Journal talks of how the aggrieved investors "scooped up" the securities, the securities being the debt workers owed to bankers for the right to shelter. The aggrieved investors felt the moneylenders didn't tell the truth about the "Quality of the borrowers or the collateral". The borrows being workers, many of them older and low waged trying desperately to get out from under the clutches of the landlord and in to their own home where at least the interest on the mortgage is tax deductable.
When first faced with the investors seeking recompense BofA took a tough stance accusing the investors of having the attitude that "I bought a Chevy Vega but I want it to be a Mercedes." This is how they see it but for millions of workers and the poorest of us it has meant being thrown out of their homes, losing their jobs etc. One disabled woman who contacted me was living in a motel with her husband and child. Her husband was working but their home was in the same small town just a few minutes away. They had been driven out by the sheriffs on behalf of the moneylenders. Most of their belongings were still in the home but they could not enter it without official permission and accompanied by a representative of the owners. If she entered the home she had thought she bought without authorization she was guilty of trespass.
As the wasters talk about Chevy's and Mercedes when referring to a yoke they have around the neck of some worker, it's important to recall what this yoke meant in real terms to someone like Gertrude Johnson, an 89-year-old still working as a health aide. Her mortgage, at more than $3000 was more than she could handle:
"I just wanted to be able to eat and sleep in my house and have a roof over my head", says 89 year old Gertrude Robertson, "Every day at midnight when I go to sleep, I think maybe when I wake in the morning they'll tell me to get out."*
The same problems that caused the present crisis remain and are building up again, these problems are an inherent part of the capitalist economy. One of the clients that is being compensated because he bought a Chevy that he hoped was a Mercedes, the mortgage debt of a poor worker like the 89 year old Gertrude Johnson instead of a rock stars mansion or the home of a TV executive, was Larry Fink, the private equity head of Blackstone. Fink was one of those the capitalist journals referred to as "Masters of the Universe" prior to the collapse. Fink earned $22 million last year. He is presently traveling the world telling other wasters many of them richer than him, that "Once stability returns to the markets, all the cash that's on hold will set off a massive rally". This is yet more proof that there is plenty of money in society and there is no need to cut services jobs or anything else, it proves there is wealth enough for every human being on this planet to have housing, health care, water, food, adequate social infrastructure etc.
This wealth was stolen from millions of people throughout the world, people like Gertrude Johnson. The $8 billion BofA is forking over to investors would eliminate the present budget deficit of the state of California----it shows how easy it would be to solve the problems we have once we control the means of production in society and the wealth created from it.
While no one would opposes regulation of the finance houses and the banks this would not eradicate these problems as we are asking them to regulate themselves and they will not do that to their ultimate detriment. There have been numerous blogs on this site over the last few years on the need to nationalize the financial institutions. Unionize the workers in the banks and financial houses and nationalize them under workers control and management with compensation only on the basis of proven need. It is not the individual accounts of workers that are taken under workers control and management, but the institutions themselves and their functions determined through elected committees of workers who would obviously be the majority, consumers, savers, various experts etc.
As we suggested past blogs, we can then use the capital in such a newly nationalized financial institution to solve the problem of people in homes they cannot afford, renegotiate mortgages to they are no more than 15% of income or a democratically agreed upon amount, use the rest of the capital to build homes, roads, schools, hospitals, bridges and create union jobs with union benefits and conditions.
This is how we prevent another housing crisis.
* WSJ 3-12-07
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