POPULISM, G.O.P. STYLE

Posted on | by Ed

I am probably not the most qualified person to comment on this issue, but I have been deriving a significant amount of amusement from the Bush administration's recent comments about addressing the subprime mortgage meltdown. Check out this WSJ piece, which is laden with right-wing comedy clips. My favorite:

"The president wants to see as many homeowners who can stay in their homes with a little help be able to stay in their homes," a senior administration official said. "We're not looking for an industry bailout or a Wall Street bailout. The focus here is on the homeowner."

Translation: good God almighty, is this ever a bailout.

This talk about "helping people stay in their homes" is about as convincing as those "consumer credit counseling" agencies you see advertising on late-night TV (all of which are fronts for credit card companies, if you weren't aware). Such efforts to "help" debtors, mostly people who shouldn't have been issued loans in the first place, is a transparent ploy to keep people out of bankruptcy. Bankruptcy costs the financial industry a lot of money. "Refinancing" to slightly-lower usurious rates of interest costs pennies in comparison.

I always (perhaps unfairly) picture Wall Street, banks, and the credit industry to be populated entirely with Cato Institute market-worshipping types, and therefore the irony of the myriad government efforts to indirectly support the industries' poor lending decisions is even more hilarious. It's a nice little symbiotic relationship. In the future, textbooks will laud the beauty of this scheme.

  • 1. Talk a lot about "GDP growth" but ignore the Brazilification of the American economy by brushing aside the fact that real wages are stagnant or declining for the overwhelming majority of Americans. Sure, that GDP growth benefits the top 10% of the population almost exclusively, but….um, here's another reality show!
  • 2. Pass laws permitting the financial industry to give loans and credit cards to appalingly unqualified borrowers, creating in those lower- and working-class individuals the illusion of greater buying power. Instead of a raise, you get a new MasterCard!
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    That'll keep'em nice, quiet, and totally disinterested in working toward constructive political change.

  • 3. Wait until the situation reaches a breaking point, namely when the amount of lending reaches a point at which the debtors' stagnant wages can't even accomodate minimum payments.
  • 4. Set up a bunch of wolves in sheep's clothing like "credit counseling" or the FHA to keep said debtors from costing Wall Street any money via bankruptcy.
  • 5. Stabilize through "refinancing," i.
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    e. dropping the debtors' MasterCard APR from a crippling 27% to a merely crushing 14.99%.

  • 6. Repeat when necessary, i.e. when income inequality threatens to motivate some people to vote.

    Ah, yes. Thanks for reaching out to make sure more income-stagnant, debt-crippled Americans can "stay in their homes." I mean, we wouldn't want to piss them off.

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    What if they started asking questions or looking behind the curtain?

    • 2 thoughts on “POPULISM, G.O.P. STYLE”

    • Matthew says:

      This is STUNNINGLY cynical, and – I fear – terribly apt.

      Don't forget about the Payday Loans sorts of establishments, which appeal to a different sort of people, and are exempt from usury laws!

      "Are you familiar with our states stringent usury laws? Oh I'm sorry! I must have just made up a word which doesn't exist."

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