The Overeducated Idiots: Is Socialism the Way to Fix America?
It never ceases to amaze me at how many over-educated idiots actually believe the “free market” was responsible for the 2008 mortgage market meltdown. The perpetually parroted meme that ‘deregulation’ and ‘greed’ were the causes of the mess is about as rational and powerful explanation for what happened as saying that Justin Bieber songs cause double rainbows and that suspicious Nigerian emails make the moon go around the sun.
The admixture of intellectual arrogance and abject economic ignorance in our self-professed elite is a heady toxin that is poisoning our politics. The lucid and sane are no longer able to communicate meaningfully with a gaggle of self-styled braniacs whose beliefs about market economics border on Dark Age-era superstition. Many seem to believe corporations earn money by witchcraft, and use dark necromancy to “force” governments to bail them out. Bankers apparently slaughter goats in boardrooms, praying for the upcoming year’s dollar harvest, whose seeds must be watered with the blood of suffering workers in order to grow.
Oh blather, these people are obtuse!
The reason the market tanked was because the bankers’ unfettered “greed,” the left’s unified theory of all that is wrong with the world* ™, caused them to give mortgages to people who could not afford them. Now why on earth would they do that? Because they are stupid and like losing time and money on loans they assumed would be paid off at interest? No, they were told by The Federal Reserve and the Democrats to make the loans to subprime borrowers who happened to be ethnic minorities or else be brought up on charges of redlining! Does this sound at all familiar to you left-wing eggheads out there?
Oh yeah, now you remember.
And then, claiming the mortgages were assets, the banks leveraged new investments on the securities in a pyramid structure doomed to collapse. Everyone knows that if you leverage outstanding obligations on assets at more than ten-to-one, you risk default. And what were the MBS’ leverages? Often thirty-to-one, and even forty-to-one!
Why would these greedy, nefarious, downright evil and nasty bankers concoct such a precarious scheme? Had these avaricious financiers gone mad? Had they been shooting heroine out back behind the Chase Manhattan with the future occupy crowd?
No. The assets were insured and the holder of most of the mortgages were none other than Fannie Mae and Freddie Mac, two gargoyle GSEs crafted by the government to bundle mortgages and sell them to banks. So would the banks have made the loans, or bought the MBS if the government had not guaranteed the assets? Are you out of your mind, lefties?
This only explains what went wrong mechanically, it doesn’t even begin to explain the nationwide scale. The reason why it was a country-wide problem requires a discussion of how The Fed toys with the money supply, but I don’t want to blow a brain hemorrhage explaining how it works or why it’s bad. But isn’t it a bit ironic that Moody’s gave the subprime assets a AAA rating, since real estate markets are notable for being localized, thereby dispersing risk in mortgage bundles? But if the causes of a real estate crash aren’t local, and instead are due to ridiculously stupid national policy, it should be little surprise when the entire country is knee-deep in shit.
In the free market, the government does not loan money, set interest rates, arrange mortgages, insure assets, or bail-out failed enterprises. This is so blatantly obvious that a properly educated five-year old can figure it out.
So if it’s obvious that the free market is not to blame, since there is only a phantasm of the system present in the US of A, then why don’t the lefties acknowledge it? Do they seriously want to say that capitalism is responsible for all the evils in the country, even if they know that the economic system we have now in no wise resembles capitalism, and is still bestrewn with glaring faults?
Instead, we are supposed to suspend our disbelief, abandon capitalism, and throw in lot together on an economic system that has never proven to be worth a tinker’s damn. Like a bunch of stoned lemmings deciding to give the economic and sometimes literal suicide pact of socialism one more try.
The left does not care if capitalism works. It does not care if socialism works. Its fanatical adherents will criticize the world as it is, name it whatever they like, just to gin up dissatisfaction enough to change the free country of the United States into the utopian kleptocracy of their dreams.
But a lot of us Americans, we feel the rising temperature of the bubbling cauldron of socialism that we’ve been immersed in and we’re hopping mad. And telling us that it’s soothing and refreshing is not going to adjust our internal thermostats to like it.