Struggling homeowners should not get a bailout just because everybody else has. Instead, struggling homeowners should be the first to be bailed out, even if they are the only ones.
The discussion over the mortgage bailout is just the latest surfacing of America's ongoing class war, and the very wealthy have been winning it. They have devastated the working class, impoverished consumers, and robbed small shareholders. They provide most of the reelection funds for politicians, define mainstream political thought, and pick the winners in every policy debate.
The collapse of the mortgage industry illustrates perfectly the destructive effect of this domination. When banking leaders didn't like the strict policies of quasi-public institutions Fannie Mae and Freddie Mac, they got congress to rewrite banking regulations. In 1999, Phil Gramm sponsored the law that allowed commercial and investment banks to merge with underwriters. HUD forced FNMA and FHLMC to reduce their standards and accept subprime loans. Starting in 2004, banks could use subprime loans to comply with the Community Reinvestment Act, which for nearly thirty years had worked extremely well to help minorities become homeowners.
Banks and underwriters got very rich selling mortgages to more people. As fee revenues grew, their share prices skyrocketed. Investors from around the world threw money at American banks to buy their riskiest packaged mortgage equities. It couldn't fail unless there was a weak link somewhere.
And there was. As banks reaped the rewards of subprime mortgages, companies in every sector shed good jobs and replaced them with cheaper labor. The term 'outsourcing' is well known, but it doesn't just mean overseas. It also means trading experienced engineers and managers for recent college graduates, contractors, and part-time workers. Payrolls were slashed and benefits disappeared. Americans who knew only one professional career for decades found themselves applying at Home Depot and Wal-Mart.
So while banks handed out the American Dream, the wealthy undermined the new homeowners' ability to meet the loans. Is it any surprise that such large portions of the citizenry are out of work, out of food, out of health coverage, and out of their homes? No. The real surprise is that anybody still believes in America.
Every American who goes to college, takes a job, buys a home, opens a business, or brings children into this world is casting a vote for the future. They are stating, with more than their words, that they believe in America's promise. Everyone who bought a home during the last eight years should be applauded, not jeered. Jobs were being cut, benefits were being taken away, food and fuel were becoming more expensive, and homebuyers still dared to believe that America was where they wanted to have a stake.
They were guilty of optimism. American optimism. Now, the same wealthy who have made their fortunes on the backs of these optimists seek to refuse their bailout. Will you let the wealthy continue to win the class war?