Wednesday, August 29, 2007

Socialism, Still Alive and Well

At least in the mind of Barbara Ehrenreich. Her analysis of the subprime mortgage meltdown is brilliant, in a Karl Marx meets Homer Simpson kind of way.

In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you'll never earn that much, but, as the lenders were saying--heh, heh--do we have a mortgage for you!

Pay day loans, rent-to-buy furniture and exorbitant credit card interest rates for the poor were just the beginning. In its May 21 cover story on " The Poverty Business," Business Week documented the stampede, in just the last few years, to lend money to the people who could least afford to pay the interest: Buy your dream home! Refinance your house! Take on a car loan even if your credit rating sucks! Financiamos a Todos! Somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were being offered.

Global capitalism will survive the current credit crisis; already, the government has rushed in to soothe the feverish markets. But in the long term, a system that depends on extracting every last cent from the poor cannot hope for a healthy prognosis.

A system that depends on extracting every last cent from the poor? Wasn't this over-extension of credit the problem? Haven't all the lenders that looked to the poor gone under? Does Barbara Ehrenreich understand how .... anything works?


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