It's the Stupid, Economy!

Yup, yup.

Okay. It's all about those pesky sub-prime mortgages--what were the Wall Street barons thinking? We need more regulation! We need to fix the greed on Wall Street! We need better oversight!

How's that again?

Well, of course, mortgage-backed securities were a pretty safe bet until the housing market started going down instead of up. As long as home prices kept escalating, banks could sell foreclosed properties for more than the amounts they'd loaned for their purchase, so except for a few legal fees, a little paperwork, and a few man-hours from the county Sheriff, defaults were a managable and relatively painless cost of doing business.

But let's recap.

First of all, incomes have been flat (except for the swaggering gambling-class) for about 8 years. Unemployment has been rising, and most of the job loss has been in the sectors where incomes hovered around the $50,000 mark. That's approximately what a full-time union auto worker made, give or take. The jobs that have been "created" (what a lovely image--I picture Hermione Grainger waving her wand) in the past decade have mostly paid less than that--even folks with an education can't reliably find employment here, because big companies aren't just exporting manufacturing jobs any more--it's the white-collar stuff, too.

Unfortunately, until pretty recently, housing prices continued to rise. So let's see...a persistently shrinking portion of the population-at-large (and whatever gains the rich may have made, ours is still an economy that depends on scale) was losing its ability to afford homes, but still the prices continued to rise.

Which part of "supply and demand" didn't the money-grubbers understand? Sure, there were people making a killing buying and selling money to each other, and those folks were able (and probably still are able, for the most part) to afford the mortgages on homes median-priced around $300k and rising. But the supply of housing (particularly the supply of expensive housing) continued to expand, as the demand for that level of real estate was shrinking.

Economists have been shouting for years that more and more of the wealth in this country is being concentrated into fewer and fewer hands. There simply aren't enough John-and-Cindy McCains (how many houses do they own?) to pick up the slack by buying multiple residences in order to prop up the prices. At some point, it comes down to numbers-of-bodies...and most families only need one house. Even if the richest 1% bought a string of houses spaced 50 miles apart, stretching from the Atlantic to the Pacific, eventually we were going to have to face the reality that there were more homes on the market than there were people who could afford to buy them.

What happens when supply is up and demand is down? (We're not talking college-sophomore Econ 101 here, folks--this is 3rd-grade stuff). Duh. The price goes down. You lower the price, or your property sits there, vacant, costing you money every day it doesn't sell. After a while you can't wait for a "qualified buyer" any more--you have to unload that stone around your neck, or you're going to drown. So you'll take whatever you can get. If things get bad enough, you'll sell at a loss, just to unload the albatross.

The idea that Adjustable Rate Mortgages (ARMs) could bridge the gap between earning power and housing prices might have looked good on paper, but those instruments are based on the idea that when a young family buys a home, its earning power will eventually grow, enabling the payment of higher interest rates further down the pike. But employment/income growth didn't happen--real incomes shrank or remained stagnant--and the people who were speculating on all this bad paper were the same insensitive idiots who were busy gleefully shipping American jobs overseas, where they could get a better labor price (thus reducing their own costs, and shoring up their own bottom lines).

The money people flourished for a while, having their cake and eating it too. But housing prices could not continue to rise, unless the available customer base kept pace with the supply of housing. Yet another "duh"--real incomes shrinking (except for a very few), housing supply expanding...it's not exactly rocket science, is it?

When John McCain talks about regulating "greed," his focus on Wall Street real estate speculation is pitifully narrow. Wall Street can't expect returns when its largest market has next to no income to spend, as a direct result of corporate stockholders' own refusal to pay living wages to living humans. Americans, in order to participate in a vibrant economy, need (duh) a job, and it has to pay enough to facilitate (duh) the purchase of a home. Furthermore, (duh) loaning people money they're not going to be able to pay back because (duh) you shipped their jobs overseas and (duh) forced them to seek lower-paying jobs just to pay the bills, is eventually going to result (duh) in a massive foreclosure crisis, which (duh) is going to blow up in your face if (duh) housing prices go down because the supply is greater than the demand.

McCain, in his now-famous back-pedal on the statement "the fundamentals of our economy are strong," said he misspoke--oh, I see--it's the American worker who's the fundamental in the equation!!

Which idiots did he think would actually believe that cockamamie nonsense? The unemployed auto workers, or the unemployed computer programmers? It's bad enough that his statement is an obvious, transparent lie. His estimation of the "fundamentals" (which, first of all, is just a stump line he's repeated so many times it pops out of him without a conscious thought) hasn't changed. No, the thing that's changed is that he's running for president of the United States instead of an Arizona Senate seat. It's suddenly dawned on him that he has to appeal not just to the sunbelt set, which, though strapped, isn't hurting all that badly, but to the entire country--much of which is composed of people he'd rather not have to converse with at all--poor people, displaced workers, people in places where the economy didn't just tank yesterday, but has been in decline for years. A lot of those folks would normally not think twice about supporting the Republican Party in principle, but in practice can't afford to wait around for the trickle-down from on high. For these folks, something has to give, and soon.

What' really pathetic about McCain's latest statement (American workers are the "fundamentals") isn't that it's obvious that he's lying--it's that the people he thinks he's pandering to are more than likely to lay down their little 8x12 American-flags-on-a-stick, and stare blankly at him, like Mr. Garrison's class on "South Park."

Much the same as the false adulation paid our "heroic men and women in uniform" by the same Republicans who sent them into Iraq on false pretenses, and got them mired in the muck with no end in sight (and the risk of a horrible death lurking around every corner), the concept of giving the American workforce a pat on the head, as if it were composed of sub-literate 5-year-olds, while at the same time lying in bed with the same people whose actions have thrown millions of them out of work, is an insult of epic proportions. When they were working, maybe that little pep talk might have inspired...but it doesn't make a dime's worth of difference to an unemployed American worker that you tell her she's "the greatest," when she's scared half to death that the meal she just fed her kids may be the last she'll be able to afford this month.

If the American worker is "the fundamental," then that worker deserves to be paid. If you can find cheaper labor elsewhere, and you buy it, and you're okay with that, then the American worker isn't a fundamental-anything. To you, the American worker is a nuisance, a thorn in your side, a "whiner," an irrelevancy whose only function is to vote (Republican, naturally) so that you can continue to bathe in gravy.

American workers have been lied to, repeatedly, for decades, by the Republican Party and its corporate sponsors. That the American worker manages to muster even an ounce of patriotism, even the slightest desire to "pull together for the team," is nothing short of a miracle at this point. Yet the Republican Party has the inconceivable gall to continue to ask these "salt of the Earth folks," with their "homey, small-town values," to bend over, again and again.

And the American worker, incredibly, remains optimistic, in the face of overwheming evidence that her leaders don't give a flying f*** about her, or the needs of her family. They just want her vote, so that they can continue the plunder.

Which part of "duh" don't they understand?