It Takes a Pillage

I have just read “It takes a Pillage” by Naomi Prins. She tells the story of the Global Financial Crisis.

In a chapter called “This was Never about the Little Guy” she says,

Here are some numbers for you. There were approximately $1.4 trillion worth of subprime loans outstanding in the United States by the end of 2007. By May 2009, there were foreclose filings against approximately 5.1 million properties. If it was only the subprime markets fault, $1.4 trillion would have covered the entire problem, right?

Yet the Federal Reserve, the Treasury and the FDIC formed out more than $13 trillion to fix the “housing correction” as Hank Paulson steadfastly referred to the second Great Banked Depression as late as November 20, 2008, while he was treasury secretary. With that money, the government could have bought up every residential mortgage in their country-there were about $11.0 trillion worth at the end of December 2008- and still have had a trillion left over to buy homes for every single American who couldn’t afford them and pay their health care to boot.

Paulson was not very sympathetic to struggling homeowners. He was happy to spend trillions of dollars bailing out his mates in the finance sector, but he expected home owners to bear the consequences of their “untenable financial decisions”. Just a small double standard.

“Due to the lax credit and underwriting standards of the past years, some people took out mortgages they can possibly afford and they will lose their homes”, Paulson said with an assassin’s calm on July 8. “There is little public policy makers can or should do to compensate for untenable financial decisions.” He further argued against government intervention in the mortgage market because an undefined “some” people might make a wick profit by flipping homes.

“Now that their investments have not turned out as they had hoped, these people may walk away, even thought the can afford their mortgage payment” he said. “These borrowers can should be living up to their mortgage commitment-government intervention here would be inappropriate”.

I am puzzled why the prophets who are so agitated about Obama’s socialist health care scheme, were not equally stirred up by Bush’s finance sector socialism.