Cause And Effect
Tim Williams
May 10, 2010
Long before the financial crisis of 2008 occurred there were continuing factors already taking place that led to the eventual collapse of the financial, real estate, and auto industries. One of the most prominent factor in contributing to this crisis was the fact that the banking institutions from 1980 onward began a series of policy changes that began to undermine the financial security and stability of those same institutions. When banks through the book away on prudent fiscal policies that worked for generations and relaxed standards for mortgages in order to generate more revenue making mortgages, like the United Auto Workers Union, they got too greedy.
Back in the 1950's, 60's, and 70's the most efficient, prudent, and reliable policy of obtaining mortgages the criteria was quite simple. The amount a person could qualify for in obtaining a mortgage was equivalent to only 25% of their gross income. All this changed with the advent of credit bureaus and new banking concepts such as Adjustable Rate Mortgages or ARM'S a new era of banking was ushered in. Eventually corruption, fraud, and malfeasance resulted as fast as the ever changing ways banks reworded individual mortgage policies.
What also occurred during this transition in banking policies was the Federal Government began the attempt in reworking our trade agreements consequently treaties like NAFTA were formed resulting in the exact opposite of what these trade agreements were supposed to do. Subsequently over the past 30 years our manufacturing base economy was being systematically eradicated resulting in loss of jobs, incomes, and a deterioration of family units. Our once stable economy was now being sucked right out from the American public.
This past decade had Americans in ever increasing numbers being lured into ARM'S thinking that their lively hoods would always be there. Then suddenly it vanished. The mortgages that they took were now being sold at inflated prices to investment firms and when millions could no longer afford their Adjustable Rate Mortgages along with the millions more with fixed rate mortgages who also lost incomes the financial industry began to unravel. This resulted in one of the worst financial, economic and social crisis of our time. Massive foreclosures occurring daily, more people left out in the cold, families being split, and our whole demigraphic society was now in a major shift away from the stability of our economy and the unity of the family.
All across America the stunning and alarming rate of blighted neighborhoods are now surging more rapidly with each bank foreclosure. In every major city in the United States unemployment rates have exceeded 20% with no real abatement occurring anytime soon. The manufacturing foundation of our once strong dominate economy has disappeared, despite what is now being taunted as a minor resurgence of manufacturing by the CEO of General Electric. What has replaced manufacturing is the service industry. This surge in service has only produced a very limited number of workers who make real living wages. An example of a living wage for the Tampa area in Florida is not less than $25 per hr. or $52,000 per year. Today in Tampa, Florida those still employed the average salary is only about $30,000 pre year.This is with an unemployment rate of over 20%. With these figures there is no way going to be enough tax revenue to take care of all the public services that are now mandated by law for the city of Tampa and the county of Hillsbourgh. This is what is occurring all across the United States in practically every city and town. A domino effect in declining economies is resulting because of what is now occurring within every city and state budgets, further pushing any hope of economic reversal of fortunes from happening.
When the federal government stepped in with the massive bailout programs [this is where the government had to step in for the sake of not letting our whole economy from falling into an abyss of debt that America could not climb out of] for the failed institutions that started this crisis in the first place only solidified the United States continuing increasing national debt. Let's hope that this maneuver of going deeper in debt to get out of debt works. But so far it has not. On top of all this the Federal Reserve since 2009 has printed out over $1.4 trillion in cash only to create more inflation for the American public.
What resulted today with all these bail out policies is that the federal government is controlling over 80% of all real estate based upon the United States Credit. The recent tumble of the stock market on May 6 indicates that our economy is just the tip of an economical, and financial iceberg of economic calamity. The economy has not recovered, credit is almost impossible to get and individual incomes continue to shrink.
The United States is not the only country faced with these sets of circumstances. The fiscal problems in Greece has already compromised and compounded the economic conditions of Europe and of the Middle East. Every country is currently face with massive unemployment rates, fiscal unrest, and future instability. What actions taken by governments in the next year will determine the future of all. That old saying" timing is everything" is very apropos in determining outcomes for the future economic stability and growth of all economies. In the United States our future may very well rest in the hands of government and the policies that are undertaken to ensure our own future security, stability, and prosperity. A National Economic Reform agenda is now warranted to protect and ensure that our future will be there for our children and for future generations.
Back in the 1950's, 60's, and 70's the most efficient, prudent, and reliable policy of obtaining mortgages the criteria was quite simple. The amount a person could qualify for in obtaining a mortgage was equivalent to only 25% of their gross income. All this changed with the advent of credit bureaus and new banking concepts such as Adjustable Rate Mortgages or ARM'S a new era of banking was ushered in. Eventually corruption, fraud, and malfeasance resulted as fast as the ever changing ways banks reworded individual mortgage policies.
What also occurred during this transition in banking policies was the Federal Government began the attempt in reworking our trade agreements consequently treaties like NAFTA were formed resulting in the exact opposite of what these trade agreements were supposed to do. Subsequently over the past 30 years our manufacturing base economy was being systematically eradicated resulting in loss of jobs, incomes, and a deterioration of family units. Our once stable economy was now being sucked right out from the American public.
This past decade had Americans in ever increasing numbers being lured into ARM'S thinking that their lively hoods would always be there. Then suddenly it vanished. The mortgages that they took were now being sold at inflated prices to investment firms and when millions could no longer afford their Adjustable Rate Mortgages along with the millions more with fixed rate mortgages who also lost incomes the financial industry began to unravel. This resulted in one of the worst financial, economic and social crisis of our time. Massive foreclosures occurring daily, more people left out in the cold, families being split, and our whole demigraphic society was now in a major shift away from the stability of our economy and the unity of the family.
All across America the stunning and alarming rate of blighted neighborhoods are now surging more rapidly with each bank foreclosure. In every major city in the United States unemployment rates have exceeded 20% with no real abatement occurring anytime soon. The manufacturing foundation of our once strong dominate economy has disappeared, despite what is now being taunted as a minor resurgence of manufacturing by the CEO of General Electric. What has replaced manufacturing is the service industry. This surge in service has only produced a very limited number of workers who make real living wages. An example of a living wage for the Tampa area in Florida is not less than $25 per hr. or $52,000 per year. Today in Tampa, Florida those still employed the average salary is only about $30,000 pre year.This is with an unemployment rate of over 20%. With these figures there is no way going to be enough tax revenue to take care of all the public services that are now mandated by law for the city of Tampa and the county of Hillsbourgh. This is what is occurring all across the United States in practically every city and town. A domino effect in declining economies is resulting because of what is now occurring within every city and state budgets, further pushing any hope of economic reversal of fortunes from happening.
When the federal government stepped in with the massive bailout programs [this is where the government had to step in for the sake of not letting our whole economy from falling into an abyss of debt that America could not climb out of] for the failed institutions that started this crisis in the first place only solidified the United States continuing increasing national debt. Let's hope that this maneuver of going deeper in debt to get out of debt works. But so far it has not. On top of all this the Federal Reserve since 2009 has printed out over $1.4 trillion in cash only to create more inflation for the American public.
What resulted today with all these bail out policies is that the federal government is controlling over 80% of all real estate based upon the United States Credit. The recent tumble of the stock market on May 6 indicates that our economy is just the tip of an economical, and financial iceberg of economic calamity. The economy has not recovered, credit is almost impossible to get and individual incomes continue to shrink.
The United States is not the only country faced with these sets of circumstances. The fiscal problems in Greece has already compromised and compounded the economic conditions of Europe and of the Middle East. Every country is currently face with massive unemployment rates, fiscal unrest, and future instability. What actions taken by governments in the next year will determine the future of all. That old saying" timing is everything" is very apropos in determining outcomes for the future economic stability and growth of all economies. In the United States our future may very well rest in the hands of government and the policies that are undertaken to ensure our own future security, stability, and prosperity. A National Economic Reform agenda is now warranted to protect and ensure that our future will be there for our children and for future generations.
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