Victims being blamed for sinking economy

[babylonsister]

Victims being blamed for sinking economy
by Jaime O'Neill | March 2, 2009

— from the San Francisco Chronicle

"The poor are not just living off the crumbs from the rich man's table, they are being asked to put the crumbs back." - David Bryer, Oxfam


To hear some radio talk show pundits tell it, the responsibility for the world's current financial troubles can be laid at the door of Alycia Robertson's 12-by-48-foot trailer. That 30-year-old domicile Alycia lives in sits in a trailer park in Oroville (Butte County), one of thousands of American towns where poverty grinds the townsfolk, and where the media cliche of "Main Street" absorbs the pain generated by the problems on Wall Street.

The scenario mounted by some of the blame-casters these days is that too many people like Robertson were given loans.

Outfits like Freddie Mac and Fannie Mae, along with legions of big bankers, were forced by Democrats to dole out debt to deadbeats like Robertson, a 63-year-old widow who has never been without a job, who has raised four children, who stands less than 5 feet tall, and who, along with others of her class, are now being saddled with the blame for collapsing the system because of misguided social engineering designed to aid the poor and generate votes for Democrats.

According to this oft-told talk show tale, the loans to people like Robertson had the lamentable side effect of sinking capitalism as we know it, and issuing in a vast socialistic bailout for the beleaguered free marketeers who were struck low by government interference with their otherwise sage and prudent money-lending policies.

So, according to the right-wing mantra, if you want to affix blame for the abysmal state of the economy, you need look no farther than places like Oroville, where lots of hardworking poor people drift by boarded-up stores on Main Street, and shop frugally at the Wal-Mart out near the city limits.

Robertson recently filed for bankruptcy, joining millions of others who could not meet their obligations. And, in their failure to pay back what they'd borrowed, they sank the boat we all were floating in, or nearly sank it, forcing government bailouts with every taxpayer still afloat reluctantly manning a bucket.

So it's the people like Robertson who are the villains in this piece, according to Limbaugh & Co. After a lifetime spent working as a certified nurse's aide, raising those aforementioned children, and doing all anyone might have expected of her - paying bills, paying taxes, keeping a home, bringing in a salary, meeting her mortgage payments - she found herself widowed, sweltering through the debilitating heat of a summer in the Butte County foothills in a tiny mobile box, with the wheels off, but no air conditioner to turn on.

more...

http://www.smirkingchimp.com/thread/20542

[corpseratemedia]

1. I read a constant stream of "blame the poor assaulting the rich" letters to the editor

In our local newsrag.

If it helps the backwash shield their psyches from reality...

[lelgt60]

2. No shit Sherlock...and here's a back of the envelope calc...

So far there's been about 2 million foreclosures. Lets say each "deadbeat" owed about 5 $2,000 payments at the time of foreclosure - $10,000. Total: 20 billion. That's right, the total foreclosure problem could be cleaned up for 20 billion. Let' throw in another 40 billion to give these people payments for another 10 months. Total: 60 billion.

Maybe I'm off by a factor of 2, making it 120 billion, but why the trillion?

Direct foreclosures are not the problem. It's the derivatives traded by our friends like Rick Santelli that are the problem.

[babylonsister]

3. No shit, Sherlock? Talk about derivatives to people who are

unemployed, uninsured, and about to lose the roof over their head.

[VPStoltz]

6. Got that right!

I heard that jerk who is head of AIG tell the story - those insured with the company are in fine shape, nothing to worry about.
It's the other financial "instruments" that the company uses you premiums to invest in have gone belly up.
Again that blame the borrower is so dishonest. If the loans had not been sold five times down the road, it could have been easily refied.
Some of the lender can't even find the deed to the property its been passed down so many times.

[Waiting For Everyman]

4. Then how come the heavy majority of foreclosures were private loans?

Bernanke et al agree on that. Said so in a Senate hearing. (And in more hearings than the one I saw, I'm sure.)

This "blame the homeowner" schtick is ridiculous nonsense - mostly, to divert attantion from the real perpetrators, in the hope that they won't end up behind bars, where they belong. And the financial media were just as complicit in it.

[babylonsister]

5. Can you attempt to read this?

Thanks.

[Waiting For Everyman]

7. Yes, I did.

The premise referred to in the OP is that the crisis was caused by the gov't pressuring banks to make subprime loans. The fact is, most of the loans that foreclosed weren't subject to that pressure.