Trust and the Economy

Although I get all excited about dropping my own truth here at Fackin Truth, I can't help but get a little giddy when somebody else publishes a great thought-provoking point. And I'm all about re-posting the best pieces, right here, for your reading pleasure.

Over and over again, the media features economic analysis that eventually cites "consumer trust" as a major contributor to the current financial crisis. In other words, weeze folks don't expect things to get better, so we're not spending as much money or trusting banks to protect the little money we already have. Since our economy is based on spending, and success is measured by the viral spread of Affluenza, our current desire to save money (and inability/lack of desire to borrow) just perpetuates the problem.

Well over at Robert Reich's spot, a commenter named "consultant" broke down the issue of trust as follows:

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When are we we going to start to see serious numbers of people charged and arrested for wire fraud, conspiracy, etc.? Trust will not return to the markets until people are assured that those who cheated them are in jail, or, no longer work in the financial sector. And folks, that is a lot of people!

Let me again quickly run down the list of those eligible for arrest:

Real estate agents and brokers (please arrest some of them; I won't mention names). They colluded to increase the price of homes to get fatter commissions; appraisers who said homes were worth more than they actually were; city and county bureaucrats who knew property appraisals were coming in too high but loved the increasing property tax revenues;

mortgage brokers and companies who offered liar loans (no documentation) and changed loan conditions at closing;

regular banks who started doing what mortgage companies did when they saw all the money being made;

Fannie & Freddie officials who bought all of the phony and unsupportable mortgage paper, knowing most of it was toxic;

Ditto for Wall St. banks, who sliced it up (securitized) into little pieces and sold them off to investors around the world;

Ditto for the insurance companies (i.e. AIG) who rated these investments AAA!;

Federal government-idiots, bought and paid for-most of them need to go to jail.

As you can see, since most of the financial and legislative system is criminally corrupt, no one of consequence is going to jail. Which means trust will not be restored anytime soon.

[All silly emphasis and bold formatting added by me for effect... just to get you all fired-up about something you're not likely able to change. Take that with your Tums.]

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Buy that man a drink. Does any of consultant's comment ring true in your heart? If the same crooks are left to steward over the bailout money, how confident do you feel?

Thanks to the Frugal Zeitgeist for hipping me to a new term in "Affluenza and the new economy."

Comments

[Deacon Blue]

And when ignorant ass folks blame minorities (blacks and hispanics, that is) for the vast majority of crime in this nation, it is precisely THESE people they fail to account for. If they did, they'd be forced to face that dirty little secret of the criminal justice system:

Every race is just as criminal-minded as the next. But if you're white, your chances of going to jail for it are so, so, so much less.

[Hawa]

@Deacon Blue: I'm reading an excellent book by Derrick Jensen called "Endgame Volume 1: The problem of civilization." He provides 20 premises upon which the book is based, and this premise (#5) covers the point you make:

"The property of those higher on the hierarchy is more valuable than the lives of those below. It is acceptable for those above to increase the amount of property they control - in everyday language, to make money - by destroying or taking the lives of those below. This is called production. If those below damage the property of those above, those above may kill or otherwise destroy the lives of those below. This is called justice.

As an example, Jensen offers the following:

"Whites could, should, and would systematically destroy the possessions of the Indians, but the Indians were not allowed to return the favor."

He also offers a more timely example:

"Petrochemical companies are allowed to make peoples' home uninhabitable by toxifying the surrounding landscape, but the residents of those homes are not allowed to destroy the refineries (or the homes of the owners).

Jensen shares more shocking but poingnant truths about "civilization" that I plan to share in posts on this blog. The book is a MUST READ.

[Kathy]

That sounds like a great book. And I think a lot of these crooks should be going to jail too. The MSM is so full of it that I don't even read it.

The huge crash last Thursday was caused by the lifting of the ban on short selling, a no brainer, but it's hardly mentioned at all.

[axisone]

This is why I have a problem with the bailout bill. I know, I know, I'm betraying my Democratic party line and sounding eerily like a liberatarian. But I think the market can (and should) fix itself. I fear that the bailout bill is going to reward the slimeball CEO's that helped get us in this mess. Rewarding corrupt businessmen is really not going to help the market, at least not in the long run. Consumers aren't completely stupid, and as you pointed out, we're going to be less likely to trust banks and businesses now.

[frugal zeitgeist]

Great article, and thank you for the link!!

[GC]

I almost got a job in this industry back in 05 and for two years I kicked myself for not becoming a loan officer because they were making that paper--getting the fat bonus every Christmas
now I'm not so sorry 'cause my company is not about to fire anybody--they are not paying us handsomely but we're not starving either.

[Hawa]

@Kathy: It really is a great book, but it's a bittersweet read. While enjoying the enlightened presentation of truly human-centered and earth-centered ideas, I can't help but feel even more powerless in the plight to achieve such a state.

But I'm gonna keep reading. LOL

[Hawa]

@axisone: I am a huge fan of the market fixing itself. Isn't that what markets are supposed to be "free" to do? Throwing a life line to floundering banks hasn't (and won't necessarily) save millions of Americans from foreclosure - but it will help folks like AIG finance a $400K party.

I believe that something needed to be done... but padding the pockets of rich bankers didn't cross my mind as the best idea. LOL

Thanks for stopping by and adding to our discussion!

[Deacon Blue]

Would have liked to see the bailout money geared toward the smaller loan needs and not the big folks who can weather this mess. As my wife pointed out to me, a lot of smaller businesses and non-profits cover payroll with short term credit lines. This is because they have money coming in, but it doesn't necessarily come in at the time needed for payroll. So, they aren't taking out serious loans, but they still need access to a stable credit market.

But yes, in general, as painful as it may be, market correction is probably the best thing overall, particularly for big business.

[Believer 1964]

Yep, it doesn't look like this will get fixed overnight. Americans, willing or not, are in it for the long haul and trust is certainly a factor.

[Hawa]

@Believer 1964: The bailout bill was presented like some kind of magic-kick-start-bullet. It wasn't long after the bill was approved that plans for even more --[raping of public funds]-- plans were in the works. The banks (and their wealthy executives) are getting their fix. The stock market rallied. And I agree with you wholeheartedly that the average citizen must endure the long haul to see improvements on a personal level since the "trickle down economics" philosophy rules the day.