The Price Of Gas ... ...

The real looting started back in the Reagan years, when installment credit interest was suddenly disallowed as a tax deduction. Then, age-old usury laws fell out of fashion, and states went into the business of chasing each other to the bottom, promising “pay NO taxes, penalties, or fees, and charge your poorest customers whatever-the-heck you please.” There just had to be a prosperous underbelly down there somewhere.

Remember when a new company couldn’t float stock until they’d been profitable for three of the prior five years? Oh dear, how arcane that all seems today!  

Forcing people into defined contribution pension plans was as easy as promising the moon. Why settle for a modest defined benefit amount when you could become Daddy Warbucks on steroids managing your own retirement account?

Why, indeed.

That set the stage for every mom and pop to speculate to live. It’s better to bleat than bleed. To avoid those non-deductible credit charges, why not open a fully-deductible credit line secured by your home? Monthly payments optional. In the long run, we’ll all be ahead. 

In the long run, actually, everyone’s just dead.

When the hedge funds went bust, we snickered, “Suckers!” When Wall Street hit the wall, we secretly smiled, “Schmucks!” When our local banks bottomed out we thanked God for the FDIC. 

(It couldn’t possibly happen to me.)

Then margin calls came to Main Street. No, you didn’t speculate on stocks or buy sub-prime, you just supplemented your shrinking income, tapping the only asset you could ever call “mine.” When Wall Street stumbled, your good old reliable home value slipped. 

Your collateral became your collateral damage.

The Feds were pre-emptively bailing out the Big Boys, the ones who’d pitched the sale, who’d grown through acquisitions ‘till they were just too big to fail. While you and I were working hard to weather wind and hail, the Feds were just too busy to help the little guys bail.

Swamped and sinking, homeless now, we’ve finally found the cure for unaffordable housing here: Can I make you a deal? 

Unless you were a hedge fund jockey or a golden parachute-wearing CFO, the bankruptcy judge will order you to submit to credit counseling. Submit as serenely as you speculated. Remember fondly, friends, the good old days, when all we fussed about was the price of gas?

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