subprime mortgage crisis

2008 Mortgage Crisis in a nutshell

So the government forces banks to make shoddy sub-prime mortgage loans, because of racially dubious practices which ultimately leads to a climate of lax mortgage practices.

Banks, plush with all these shoddy mortgages try to reduce risk, by bundling slices of thousands of these mortgages into MBS, or mortgage backed securities, then get these MBS insured by AIG against default with credit default swaps.

Then they convince ratings agencies Moody’s and S&P to rate them highly, and they get them backed by Fannie and Freddie Mac, which are government-sponsored agencies (much like the Federal Reserve). Sp when they sell these high yielding MBS’ to unsuspecting investors and banks it turns out all the mortgages are junk and everything collapses and the government bails out the very banks they induced into making this mess in the first place.

Gillovny and Buyer’s Remorse

I don’t know if this is necessary or even helpful. We probably don’t need anymore voices weighing in on the state of things in the fandom, so if you’re sick of things and want to look past this, please do. If you venture below the cut, please take this in the spirit you know I intend it – as a longtime X Files fan with a sometimes-too-soft heart that was weaned on MSR yearning, but who is also striving for a clear-eyed grasp of reality. Here goes:

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Let’s start by asking an important question: Is it even natural for men to be in the workplace in the first place? It is well known, for example, that men are not good with money. Companies run by female CEOs perform better in the stock market, and women are better at both saving and investing. It feels uncomfortable to assume that male irresponsibility with money is a biological trait. But with their higher salaries and disproportionate representation in business schools and and boardrooms, men have been given every opportunity to succeed in the corporate world by now. Many industries have essentially operated decadeslong affirmative action programs for men.

Yet even after all these advantages, men have not only failed to live up to their potential but have also been responsible for the subprime mortgage crisis, defrauding investors, destroying hardworking people’s retirement funds, and triggering worldwide economic crashes. Instead of learning from their mistakes and misdeeds, they have often rewarded themselves with bonuses and lobbied to remove regulations that prevent them from hurting people again. We must ask ourselves, do men really have judgment and intellectual abilities to be entrusted with our most important resources?

Hey okay okay hear me out on this: the nineties were basically our version of the Roaring Twenties.  Why?  Here we go:

  1. Prohibition = War on Drugs.  In both cases, we had drug laws tailored with the excuse of “morality” that were not only ineffective, but resulted in many deaths for people in the lowest echelons of society.  
    During prohibition, the rich were able to afford higher-quality speakeasies with perfectly safe drinks like gin.  Politicians could even go to embassies and drink legally bc they weren’t on american soil.  Similarly, the drug war did not target drugs affecting mostly white people, like heroin or prescription medications illegally sold (and also marijuana for white people was basically ignored)

    Not only THAT, but such conditions also led to terrible substitutes that caused a number of deaths.  During prohibition, people would turn to synthetic methyl alcohol, which tastes like grain alcohol except it, you know, causes blindness and death.  They would also drink industrial alcohol, which the government “denatured” by adding poison despite knowing that people would drink it regardless.  Meanwhile, we now have dangerous synthetic marijuana seen as a safe substitute when it is in reality often incredibly dangerous.

  2. Speculation = Subprime Mortgage Crisis.  I will admit to knowing less about this than about the chemistry of prohibition alcohol substitutes (huge nerd alert) but think about it: in both cases, you have people intentionally making risky financial decisions on the stock market in the hopes of profiting off of future changes in value, causing massive expansion in their respective markets and eventually creating bubbles that burst, causing everything to fall to shit.  Hell, speculation in the 20s even saw the beginning of hedge funds and selling borrowed stocks.  During both crises, the richest stayed in their positions of privilege, in some cases even profiting through smart investment.  

  3. Undeserved Nostalgia=Undeserved Nostalgia.  We LOVE romanticizing both time periods for their music, glamour, weird fashion, and so on, while ignoring the fact that both decades were rife with economic inequality, laws that targeted poor people to a cruel extent, and of course, racism.  

@emperor-of-matzah do you know if I’ve missed or got anything wrong