Posted in economy, politics, tagged asset, auto financing, bad loans, bets, boom and bust, bubble, business, cap, capitalism, casino, catostrophic, CDO, class war, climate of fear, commerce, concrete, creative contribution, employment outlook, fail, false economy, Fannie Mae, Freddie, free, fundamental economy, funds, gambles, Greenspan, haves and have nots, hedge, house of cards, inside job, IOUs, irrational exuberance, irrationality, lending, lose, Main Street, market inversion, marketplace, markets, MBS, mess, monetary policy, mortgage, OTC, predatory, rationality, real economy, redistribute, REMIC, speculative, speculator, subprime, subsidize, systemic risk, three Rs, trading, uncertainty, volatility, Wall Street, was Ayn Rand wrong, win, win by losing, work, yo-yo economics on November 15, 2011|
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For all the talk of Wall Street reform and consumer protections the problem of predatory lending has not been eliminated.
Subprime lending continues in the auto financing industry and elsewhere, and unlike conservatives’ criticism of the housing market there are no federal subsidies to finger. Policymakers have, indeed, caused the problem but for reasons other than what many of us have been led to believe. True, Freddie and Fannie Mae advocated for the dream of home ownership even as it floated out of Americans’ reach. However, this reality only begs the obvious but lesser asked question: Why is the American Dream drifting out of reach in the first place? And might the answer to this question reveal that the hollowing-out of the middle class bears a reciprocal relationship to market volatility?
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