The government wants to hand banks tens of billions of dollars by buying up their bad mortgage debt.

No one wants to pay higher taxes, but when the big banks are in trouble, who could be so heartless not to open their pocketbooks? That seems to be the consensus in the media in their discussion of the latest set of plans to bail out the Wall Street clowns who are losing hundreds of billions of dollars in the housing market meltdown.

Just to remind everyone, we are in the middle of a meltdown of an $8 trillion housing bubble. In the most recent data, house prices were declining at a 16 percent annual rate. This rate of price decline implies a loss of $3.2 trillion (more than $40,000 per homeowner) over the course of a year. This collapse is throwing the economy into a recession and leading millions of people to lose their homes.

As part of this story, most of the major banks have taken huge hits as a result of the fact that the financial wizards who guide them apparently didn't know what they were doing.

RLCC: They knew what they were doing. The whole thing was planned to transfer taxes (paid by the middle and lower classes) to the ultra-rich. It's just another in a long series of transfers of wealth from everybody else to the ultra-rich. There is a constant redistribution of wealth to the top that is accomplished via a series of totally unethical schemes. It is just one such scheme after another. Take away all the schemes, and there wouldn't even be any poor people. Everyone would rise. It is the greedy, diabolical schemers who ruin everything.

Originally by Dean Baker, from on February 26, 2008, 1:00pm

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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