We are going through a very difficult time. We have suffered a major recession that on paper looked more like a depression. We are on the verge of falling into another recession. The possibility of falling into another recession means that we are going on the assumption that we were delivered from the first one. This is debatable but regardless of what our opinion is on the economy, we have had a difficult run. If you are in your 40s you are living through something never before seen in your lifetime. We have seen the standard of living for the current generation fall below that of the previous generation for the first time since WWII. If you were in high school in the 80s and finishing college in the 90’s you probably had a very good beginning to your career.
If you survived the dot com bubble and were able to start a business, invest in the right stocks, or find a good job you likely had your life on the right track for nearly 20 years. You did all the right things, read all the right books and invested for the long term. Everything you read and researched on the stock market and real estate told you to invest for the long term. The graphs and the pie charts all showed the best way to have a secure retirement was to invest in the long term and not worry.
Kleptocracy as defined by Wikipedia:
Kleptocracy, alternatively cleptocracy or kleptarchy, from Ancient Greek: κλέπτης (thief) and κράτος (rule), is a term applied to a government subject to control fraud that takes advantage of governmental corruption to extend the personal wealth and political power of government officials and the ruling class (collectively, kleptocrats), via the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service.
As the economy grew, manipulations by the government, the banks and the corporate Kleptocracy hypnotized everyone into believing we were safe in our investments. We could take any book off the shelf in the library or book store and see that real estate has never gone down if we took date from the 50 states. The trend of the housing market was always increasing. We had all the evidence to believe that the safest, most stable investment was our home or rental property. Americans took pride in making their monthly payments and meeting their obligations to the banks and lenders. What was interesting was that people remained committed to making payments to the banks even after the savings and loan scandals of the 70’s, 80’s and 90’
We were given a wake up call that should have increased our suspicion of the mortgage banking, banking and lending industry. However, thanks to government coming to the rescue, and an unsuspicious media, the banks were given a free pass. This free pass seemed to make the banks and lending institutions even more brazen and fearless. The banking industry took over the economy and bought off the entire government as well.
This all sounds like conspiracy theory but if we look more closely at what has happened to our form of “capitalism and free markets” we can see that we have given up on a free market economy and allowed corporate America to pillage Main Street from their ivory towers of Wall Street. How else could we explain the unquestioned fleecing of county and state governments with the magical creation of the Mortgage Electronic Registration System? The MERS system was instituted with no fan fare, scrutiny or act of law. It was a drastic change to one of the founding principals of our country. The registration of property and chain of title has been one of the reasons for our successful economy. How could the corporate banks completely ignore the system in place and create a new one without any vote of the people or legal standing?
They did it because the politicians are in bed with the banks. Our so called representatives have been bought and paid for many times over. They were all fell to their enormous desire for power and money. The banks bought politicians easily and created a pseudo power system through campaign donations and strategic appropriations against their enemies. They were smart on one level however, by giving the country a taste of super prosperity in the real estate markets so they could continue their bidding to put all the pieces in place to plunder trillions of dollars from the American middle class. Who would question what the banks were doing when so many people were making easy money? Who would question the banking system when banks were freely lending out capital at great rates?
No one would question the banks behind the scenes manipulations during prosperity. The late 1990’s and the early 2000’s were the banks final push to destroy the economy and redistribute trillions of dollars out of the hands of hard working Americans and place it in the fat bank accounts of the Wall Street and D.C. criminal elite. There is no question there was a method to their madness. Anyone who thinks this was all a big accident is gravely mistaken.
Despite the hype and cheerleading of the President and Congressional officials angling for re-election we are no where near the end of this recession or recession like economy. The foundation of the country is the financial system. This system must thrive for the country to prosper now that we have little manufacturing left to generate the dollars needed to increase the velocity of money. The only reason we were able to have a stable system of banking was because of a stable housing market. The home mortgage gave the banks a very high yielding, highly profitable and highly consistent and stable source of income. The banks were taking little or no risk on home mortgages. If you factor in the high percentage of paying customers with the reality that the collateral backing these mortgages were valued well in excess of the note. The unbeatable combination of homeowners paying down mortgages while the collateral securing the notes continued to increase, lined the coffers of the banks with unlimited amounts of money.
Lets not forget that a large percentage of mortgages were insured by the government and were sold quickly by the originator at huge, fast profits made the banking model perform a lot like a Ponzi Scheme. Of course it was all done under the vale of “free market” capitalism but it was a complete scam backed 100% by the full faith and credit of the US Government. Our government was complicit in the devastation of the economy and the destruction of the retirement accounts of millions of Americans.
What does that leave for the next generation? It leaves a very different world for our children and grandchildren. It also leaves a very treacherous and winding road back to prosperity for the 40 something demographic. Our economy has ground to a halt and we are not seeing any recovery since the economic meltdown that started over 5 years ago. We have seen the American dream that has been the guiding light of average Americans who had the freedom to work hard and persistently and expect to get ahead by the time they retired. The arrogance of power has taken our country to the abyss. Those in power are trying so hard to convince the rest of us that we are not hanging over the edge of oblivion with our lifeline working the hold loose as we wait for some real evidence that were are not heading straight down.