Get Your Class War On

Get Your Class War On - WSJ.com

Consider the current economic catastrophe, which has been building for a year. Just as it has taken down Countrywide, Bear Stearns, Indymac, Freddie, Fannie, Lehman, Merrill and Lord knows who else in the weeks to come, it has also pulverized the reigning conservative shibboleths of the past 28 years.

There is simply no way to blame this disaster, as Republicans used to do, on labor unions or over-regulation. No, this is the conservatives' beloved financial system doing what comes naturally. Freed from the intrusive meddling of government, just as generations of supply-siders and entrepreneurial exuberants demanded it be, the American financial establishment has proceeded to cheat and deceive and beggar itself -- and us -- to the edge of Armageddon.

This was a very disappointing article for me to read as it appeared in the Wall Street Journal. I felt compelled to write the columnist and share my thoughts. I've posted them here if you care to see them:

Sent: Wednesday, September 17, 2008 11:35 PM
To: 'thomas@wsj.com'
Subject: Get Your Class War On

Mr. Frank,

As I was reading your article, I was thinking to myself “here’s a guy that almost gets it but doesn’t know he gets it” and then I ran into this statement:

“...this is the conservatives' beloved financial system doing what comes naturally. Freed from the intrusive meddling of government, just as generations of supply-siders and entrepreneurial exuberants demanded it be, the American financial establishment has proceeded to cheat and deceive and beggar itself -- and us -- to the edge of Armageddon.”

I am very disappointed that the Wall Street Journal would employ someone who so poorly understands what has been happening in the financial services industry. Greed, corruption and multi-million dollar CEO packages are a problem, but they are not THE problem. If the problem was in the millions, Wall Street would barely notice and business would continue as usual. But this is not the case.

The downfall of these organization was caused, not by being “free from the intrusive meddling of government”, but BECAUSE of the intrusive meddling of government. Billions and billions of dollars of loans that should not have been made to people who were not qualified to receive them. Loans that would have NEVER been made if the government wasn’t forcing the financial institutions to make unwise loans or face the public outcry of racism and not supporting the ‘working class’ of America.

For decades, centuries even, banks have done just fine when they are allowed to assess their own risks and take responsibility for the risks they choose to expose themselves to. It wasn’t until these government-forced, low-income, variable rate, subprime loans started defaulting that we ran into the problems we have today. No, the government didn’t invent the loans – but it created the environment that forced the banks to invent something that would allow people who wouldn’t normally qualify for a mortgage to get through the process.

Do the banks share some of the responsibility? Absolutely, and a good portion of it. But the problem arose when problems like these always do – when government sticks its nose into something it knows nothing about and makes decisions based on votes rather than sound financial judgment.

You got it partially right, Mr. Frank, this is due to a class war, you are just wrong about by whom that war is being fought.

Sincerely,

Author :)