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James Kwak on the Advancing Oligarchy

“Middle class wages have been declining for ten years and stagnant for thirty years, and if you have a financial system that allows people making $15,000 a year to take out $400,000 mortgages, I don’t think that’s the fault of the guy making $15,000.  I think it’s the fault of the financial system.”

“But, let’s say I’m a guy who makes $15,000 a year.  I realize, wow, I can get a $400,000 mortgage and I can live in this house for a few years, and if housing prices go up, I can flip it and I can actually make a couple hundred thousand dollars.  And let’s say I’m really clever, and I say, if housing prices go down, I’ll just walk away and I will have gotten to live in a really nice house for three years at no cost to myself.  I mean, that’s the worst, most cynical spin you can put on it, right?  But this is exactly what people on Wall Street do.  The person who is criticizing the janitor for doing this is the same person who thinks that businesses should exploit every legal opportunity to make profits.  So even if you attribute the worst possible state of mind to the guy making $15,000, he’s still just doing what any businessman should do under the circumstances.  But our national ideology somehow doesn’t allow us to think about it in those terms.”

James Kwak


8 thoughts on “James Kwak on the Advancing Oligarchy”

  1. When business does it, it’s called ‘strategic default.’ When a person does it, it’s some kind of grave moral offense. And yet businesses are now, under the law, persons. I have no idea how all of this squares.


  2. Compassionless “rational ideology” more honoured in the breach than in the observance. The majority are losing dreadful, desolate humble abodes and their lives are hard. Can you imagine what would happen if social security were to be privatized?


  3. Geraldine, I agree, I can’t even understand the whole privatizing social security argument. And it seems like following this economic recession, how does privatizing something and leaving it to the whims of the market sound better? It’s just bizarre.


  4. Yes, Astasia. Who represents the poor in the market? The poor do not have the means or knowledge to avail themselves of the market. They tend to live pay-check to pay-check. Social security is their only safety net. Let’s hope it never happens for their sake.


  5. Geraldine and Astasia: Put me down as also against privatizing social security. I want no return to the county poor houses of the 1920s and before. But then again, I’m not Pete Peterson nor Glenn Beck.


  6. This is a good point. Sadly, we couldn’t bring ourselves to think in these terms several years ago, and the result is a huge disaster.


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