Those Who Dance..
I learned how to read by comic book. They were 35 cents and in a wide variety at the bodega in my hood when I was in the 3rd grade in Richmond California. I can still remember a line from one of the bad guys in some alternate universe of that era, “those who dance, must pay the piper!” I think that came from a Spiderman arch nemesis.
But now that phrase has transgressed into our real world- 2008 with respect to our country’s money center: wall street.
On September 15th two of the United States largest private money lenders, Lehman Brothers filed for bankruptcy- meaning they went out of business. Days later Merrill Lynch was absorbed by Bank of America. And AIG, one of the largest international lending firms had to be taken over by the Federal Reserve (the government).
Oh, That Was You Out There!
These private institutions run our money system.
If you or someone you know has a retirement account- money you can’t touch and will get when you retire- that money went to lenders like these. You get paid over time for ‘allowing’ these banks to invest your money- so when retirement comes, you have a little extra cash. except in the event these banks go under. And they have. So you now see why this is such a big deal. These banks took extraordinary risks for profit, and got stuck with loans that many couldn’t or wouldn’t pay back. And it’s also why you hear John McCain calling Wall Street greedy. And why you hear Barak Obama blaming the Bush administration for allowing these conditions to flourish- which they did.
At the center of this money market catastrophe is what you’ve no doubt heard of as the ‘Subprime’ lending practice. Basically, banks started handing out credit where if you failed to ever make a payment on time, interest could change your monthly payment to something you could no longer afford. and that was in the fine print of every loan signed for. Should you blame the people who went out and got those loans? All that glitters ain’t gold perhaps? Or should you blame the banks for signing folks up and not adequately revealing the deets’ of the loan? Hmmm.
Bush the Conductor
It doesn’t matter, because everybody’s hip to the script now that major financial institutions got caught holding these loans that either no one would ever pay back, or couldn’t pay back.
Now remember back in 07’ when housing was being build like crazy because populations were rising? Thats’ called demand. And remember when the housing market slowed? There were many houses and not enough buyers- and then came the practice if subprime lending. tapping into a population of people that were a bit more risky in making consistent payments over time. And don’t forget George Bush’s stimulus checks that were supposed to give an added boost of cash in peoples’ pockets. The only problem with that was that at that very moment in our history his primary backers (the oil industry) were about to catch wreck and make it’s biggest profits in history. See, he’s a president on the way out and he began to pay his folks on the back end!
In January of this year, oil prices surpassed $100 a barrel for the first time ever topping out at $147. I knew families that had to chose between driving their kids to school or eating that week as price per gallon threatened the $5 mark here in the Bay. The price of rice went up, dairy, there was a Salmonella tomato outbreak and lettuce e coli wave across the country too. California didn’t have a state budget signed until mid September. Student loans were on hold. State instructor salaries were on hold. Nationally, sulphuric Acid, a key component of steel and copper manufacturing reportedly increased SIX times this year. And to make matters worse, a whole lot of greedy people hoodwinked folks into thinking that buying a house, with loans that would grow beyond your payments was a good idea. I mean you put money down or start paying- and the cost of the house actually grows! Some people got into really dodgy Adjustable Interest Rate loans. In any case, people start off paying a small amount, but that monthly grows over time. Many people were told, “don’t trip, you can refinance into something more affordable in the future!” damn.
The trend was so seductive that loan lenders who either worked on commission or as a matter of course became addicted to a little extra cash at common folk’s expense. When payment rates changed and people went from paying like $700 monthly home payments to $2100- people just weren’t able to do it.
And the loans grew. The banks were left holding the ticket. People got kicked out. And honest folks who have retirement money in plans called 401k’s- money taken from their paychecks to be set aside and invested in funds on Wall Street- saw their money get smaller and smaller. That means your auntie can’t retire if she’s 65 now, or she’ll get say : $500 a month instead of the $1500 to $2000 she would’ve received IF THIS HADN’T HAPPENED.
Whatchu’ Gwan’ Doo’ Nah’
So you might be thinking- for real hip-hop heads- if you’re already caught up in the struggle and don’t have a retirement and everyday is a hustle- it means things just got a little more expensive- everywhere. And what you could once buy for a dollar, just might cost you four...this year alone. Dubs cost more. McDonald’s cost more. Bodega cost more.
You’d better start reading the paper, gods. And start stacking your chips, privately..cause George Bush’s administration just set us up for the biggest money heist since the Great Depression of the early 1900’s. Exercise more, you might find you don’t have time or need all those things you once felt you could no longer live without. And you’ll have more money in your pocket.
I’m b.hlecksi parmella and this has been a national news report for Birds Who Like Pomegranate.
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