According to L. Randall Wray, the blossoming mortgage and foreclosure crisis represents the Biggest Fraud in Human History.
That's saying something. But given the nature of the beast, it's probably quite true. Much of the real estate bubble was based on fraud, perpetrated by almost all the players, deliberately engineered to produce enormous profits at the top of the pyramid, not so much as you slid down toward the bottom, but still, even there, an illusion of profit could be manufactured or maintained for as long as housing prices kept going UP.
Drill deeper, though, and we find that the whole structure of capitalist economies is built on fraud, complicity, conquest, exploitation, theft, and sleight of hand. That's what it is and has always been. Don't like it? Move to Russia! As they used to say. Only you won't escape there any more. If anything, it's worse there than it is here.
The deregulation of the banks and the financial "industry", combined with the pretense of an "Ownership Society" caused this situation. Unraveling it is going to take some heavy lifting, but I think it can be done. The outlines of a solution have been clear enough for years now. The avoidance of a solution has characterized the entire Recessionary Period. We can assume the avoidance is due to the fact that the predators are still making out like the bandits they are, and they have no intention of setting their ravening aside for the Greater Good. They won't do it. Don't ask them.
What should be done is simple: 1) Nationalize the banks; 2) Prosecute criminal fraud; 3) Provide substantial and sustained debt relief to households until the recessionary pressure is relieved.
None of that, of course, is being done. Consequently the Endless Recession continues; the banksters and fraudsters continue to prosper; the People suffer and pay for it.
And of course the TeaBagging segment of the People like it that way.
James K. Galbraith has suggested approximately the same solution I've been yelling about for years. He doesn't do it quite as straightforwardly since he's an economist, but he gets to approximately the same place nonetheless.
- Nationalize the banks
- Prosecute criminal fraud
- Provide substantial debt relief to households.
As long as there's a banker's grandson in the White House, unfortunately, and as long as the banksters rule the roost in Congress, regardless of which major party is nominally in power, none of that will be done.
But it is interesting to see all the hankie wringing over the little problem of "documents not in order" that is causing the supposed freeze on foreclosures which apparently is as fraudulent as any other aspect of this whole miserable mess. But then, that's been true every time a "foreclosure freeze" has been announced. It's true of all the myriad work-out programs, too. The whole system is fraudulent, top to bottom, inside out.