The 'Credit Crunch' angers me, because the system has taken our money, gambled with it, and lost- and as a result it is us that have to bail them out because the treasury believe the disease is less painful than the cure. And what is worse- virtually no one has lost their jobs: the same people who gambled our deposits, pensions, savings etc. are still sitting in their ivory towers, draped in lavish lifestyles that have come regardless of the fact they have de-stabilized the entire western world.
I am sure everyone knows this, but the financial system is extraordinarily greedy. It hires the best brains, and the most talented mathematicians to conceive new financial vehicles from which to derive more profit. To this end, these mathematicians devised 'gearing' of high-risk debt, through complex restructuring, so that they could then be sold on the debt market as 'AAA' debt- debt that is the least risky to buy. However, the debt that was contained within it often included the poor - the kind of people of earned $16k a year but were given a $300k mortgage- who had no hope in hell of repaying that debt. But the system's fail-safes- the credit-scoring of debt by people such as Moody's- was too slow to adapt to the new vehicles that had been conceived by the banks.
Let us be clear- all of the banks [with very few exceptions] were in on this scam. They wilfully lent the money to people who were not smart, were mis-sold the mortgages by greddy brokers who got a commission on sale. Even those brokers who knew it was wrong did nothing about it, because they knew these customers would just go across the street to a competitor- hell, why EVEN BOTHER trying to intervene when you might lose out on some cash?
And this is the rotting, stinking heart of the American/Capitalist Dream- it all comes down to getting rich, with the ends justifying the means. As long as you look after yourself, everything else is expendable. During the last 5 years, fat cats have literally sucked billions out of the system to line their own pockets, and got out whilst the going was good. But then the cracks began to appear, and senior executives realised they were holding bonds that were bad- they owned debt that was owed by hicks, the underclass- and the game was up.
The system has let us all down- not only can we now not get mortgages, which means that the economic system declines across the board [no new house= no new furnishings, no new cars, electricals, broadband, TV etc] but the taxpayer has had to bail out the very companies who got us into this mess. Small business can't expand because their are no loans, and people cannot Our taxes - that I personally work 70 hours a week to pay- have propped up Northern Rock, which is sucking £3bn a quarter out of the treasury- in spite of 2.2k employees losing their jobs and in spite of the fact that the elderly can't afford their electricity.
It is clear that capitalism is a destructive force, that has served to only make a handful of people extremely rich, at the expense of those who are less smart, less driven, less lucky. And what is worse, we have all contributed to it invisibly, and it has come home to roost- our pensions are gambled with; our taxes have been bet on a quick recovery that won't come and our livlihoods have been put on the line. But has anyone paid for this? No: the government dithers as time goes on, paralysed by having to make tough decisions [thanks Labour] opn a system that funds it, a system that shrugs its shoulders and closes rank- and a toothless press that meekly follows the orders of the bosses who own the same system that it should be exposing as being broken and flawed.
It is a disgrace that capitalism has eaten itself, that NOT ONE institution stood up to challenge it. and that we are all staring into the abyss.
