Ugly. Criminally Ugly.

In less than 18 months forty percent of global wealth has evaporated. Poof!

http://www.reuters.com/article/wtMostRead/idUSTRE52966Z20090310

That makes me think that forty percent (or more) of global wealth was pure bullshit.

In basic terms, this global economic crisis started in the U.S. housing market. Back during the late nineties, Phil Graham, a Senator, wrote legislation which majorly reduced regulation in the mortgage industry. This paved the way for the housing bubble.

People's income started going flat back around 2000. This meant that the housing party was going to be over and that housing prices would stop their meteoric rise and start to fall a bit as demand cooled. ARM and NINJA to the rescue!

ARM, as most people know, stands for Adjustable Rate Mortgage. This is a loan where you initially pay a lower interest rate. At a later date (2 years later, usually) the rate would increase, making mortgage payments as much as double in some cases. Designed for house flipping and speculation, many people were caught with these loans when the housing market started cooling off. Unable to sell, the higher interest rates kicked in and their payments went through the roof. Foreclosures by the millions followed.

NINJA is a less known type of loan. The acronym stands for No Income No Job Applicant. This initially started as a way to sell homes to illegal immigrants who could not legally be employed in America. They had jobs, they just couldn't claim them on the paperwork. The NINJA loan became a way for mortgage brokers to sell to any-old-body. Make a terrible loan, get your commission, and let the recipient of the loan deal with the fallout.

All of this was bad... oh, yes... but the worst has yet to be explained. Any idiot, even a Wall Street executive, could see that these were risky loans. There had to be some other way to make money off these loans aside from the monthly mortgage payment... let's think here, boys...

What Wall Street came up with was nothing short of criminal. Wrap these mortgages up into securities, price them at 20-30 times their value, break up the mortgages and slice them and dice them ten ways to Sunday so no one could tell what securities fund was comprised of what mortgages (and at what terms/rates), insure them, get them rated AAA, and sell them on the global markets.

All of this required massive collusion. The insurers had to be in on it. The rating agencies had to be in on it. Banks had to be in on it. Wall Street had to be in on it.

Massive. Criminal. Fraud. Conspiracy.

And now we, as the American tax payer, are expected to bail out the top 1%. Bail out the bankers. Bail out the insurance giants. Bail out Wall Street. And yes, it is the top 1% who dreamed up these loans and how to insure, rate, and sell them to make more money off of smoke and mirrors. Yes, it is the wealthiest Americans who are almost solely to blame for this mess we're in.

To top it all off, these same people are balking at a tax increase to help cover the fallout! Rich motherfuckers. Most of these people haven't been poor for generations and they have no idea what is is to live hand to mouth. They have no idea what it is like to have to scrimp and save for what they want or need. They have no idea what damage they have done.

Detroit is different. I have no problem bailing out Detroit, and here's why:

Without auto manufacturing in America we are no longer a superpower.

Never mind the fact that GM, Ford, and Chrysler are also victims of Wall Street's greed and incompetence. They are suffering from a lack of demand. Most of the green initiatives they are pursuing started long before the downturn. The Chevy Volt is a good example. They were in the process of changing their faulty business models when the recession hit.

The simple fact of the matter is that auto manufacturing is a matter of national security. It is this industry which provides the backbone for military industrial might. No modern nation can be a superpower without this component. It is a prerequisite.

But the right is using this as an opportunity to attack the unions. Yes, evil unions! Oh, noooo! They are responsible for such evils as child labor laws, workplace safety regulations, the forty hour work week, retirement and health benefits, and the list goes on. Do your research. Before unions, labor was exploited. It was during this time of rampant exploitation of labor that communist and anarchist movements in this country took hold.

Few people know this, but there was an anarchist movement and a communist movement afoot in this nation which was very strong around the turn of the century (1900). Much of their gripe was with industrial exploitation of workers. Horrible and dangerous working conditions where children worked like slaves, the hours were as long as the boss demanded, and the compensation incredibly low. This movement in America even managed to assassinate a President! William McKinley, to be specific.

Oddly enough, once the labor movement in this country started to gain ground and improve conditions for workers, the base for these more violent and destructive movements began to dry up. So why is it that unions get such a bad rap in this country?

Essentially, you can blame it on Jimmy Hoffa and the infiltration of some union shops by the mob. Much of this, at least on the larger scales, was cleaned up by the Justice Department under the RICO Act. However, the taint of this corruption provided the necessary "in" for some elements within our political establishment to go after unions and demonize them.

These same elements persist to this day. They are politicians in the pocket of the captains of industry and finance. These same politicians are eager to bail out Wall Street (no questions asked) and defuse any blame that anyone tries to place at the feet of these captains. At the same time they make Detroit grovel for an amount that was roughly 5% of what they approved for Wall Street with no strings attached!

All I am saying is that we have been taken for a ride. We've been pumped and dumped. Forces are at work that favor the extremely wealthy and screw the middle class and poor. And many of us still don't see it!

The American Dream once meant an honest shot at a decent life for anyone who would work hard and play by the rules. It has been hijacked to mean "wealth and glamor", or wild success. It is no longer good enough to simply own your home, raise your family without hunger or desperation, and retire with dignity. Now you have to have your ride pimped, granite counter tops, and take deluxe vacations to have attained the "American Dream."

By hijacking the American Dream to mean "extreme wealth" we have been made to think that any policies that do not favor the wealthy above all others are somehow unAmerican. We are meant to believe that tax policies that shift wealth upwards are fine, but that tax policies that shift wealth to the middle class or poor are "class warfare" or socialism at work.

Let me tell you something - America has never experienced class warfare. The French Revolution was class warfare. The Russian Revolution was class warfare. The American Revolution was not class warfare. The elite and wealthy in America lead a revolution against the wealthy and elite of England.

In France the wealthy were carted off and executed en masse at the guillotine. In Russia the ruling class was exterminated like rats. And so I say to you again - America has never seen class warfare. The wealthy are terrified of it here because the wealthy never win at class warfare. They die like rats.

Am I saying we should start killing rich people? Hell no! I'm saying that the wealthy interests in this country are doing everything they can to rip us off, to squeeze every last drop of blood they can out of us, and at the same time stave off retribution at the hands of the masses. These chickens always come home to roost, however.

One thing that France and Russia both had in common was an autocratic regime that ignored the people and favored the wealthy to the exclusion of everyone else. America is different in that we have a democracy which is at least marginally responsive to the will of the People.

We have flirted with open class warfare in the past and we were brought back from the brink by people like Teddy Roosevelt (Republican - trust busting) and Franklin Roosevelt (Democrat - New Deal). Regardless of whether or not you feel these initiatives were worthwhile or not, they altered public perception of the landscape and brought us back from potentially huge civil unrest as a result of the lower classes rebelling at their lot in society.

In both cases (trust busting and the New Deal), the public was outraged by the abuses of the wealthy. At the turn of the century it was the robber barons and industrial titans like Carnegie, Rockefeller, and Schwab who used the Pinkertons and like methods to brutally suppress worker strikes and unionization.

In 1929, short selling and abuses on the stock market were the cause of massive hardships in this nation. Forces beyond the average man's control had ruined his life and they were rightly angered by this. These forces were again comprised of those who had wealth and wanted more and more and more and more.

Forty percent of world wealth lost. The poorest among us always bear the heaviest brunt of these downturns. Historically, when the better educated middle class starts to feel the pinch is when things get ugly. They "rouse the rabble", as it were, and with numbers they break the back of the wealthy establishment and, at least, force concessions.

So let's all pull together before it gets that bad, eh? We're rocketing in that direction, if you hadn't noticed. How many people do you know who have lost a home, a job, or both? I am lucky in that I live in Charlottesville. Between the University of Virginia, hospitals, NGIC, and other agencies and industries our area only tends to get hit by the worst recessions.

I will tell you one thing, however... I walk to work every day right through our downtown and Main Street areas and I've been seeing a noticeable uptick in the number of homeless people or people begging for change. Old ladies living in tents, people pushing shopping carts around picking up cans, disabled people in wheel chairs on the Mall asking for money.

It's getting ugly.