The economic crisis was caused in large part because millions of Americans could not pay their mortgages when interest rates kicked in that were far too high for them to be able to maintain payments on their home loans.  As millions of forclosures started appearing across the land (now known euphemistically as "troubled assets") the greedy masters of high finance looked the other way and did nothing, hoping to preserve the mortgage ponzi scheme that had paid so handsomely thus far.

At last, the bottom dropped out and the mortgage flim flam was exposed for all to see as major financial institutions began to implode.  The scions of Wall Street (many of whom were major architects of the schemes leading to the financial collapse), realized the catastrophic nature of what was occuring and so began to clamp down on the free flow of money and to charge higher rates to the remaining customers they actually would lend to, in order to try and recoup some of their losses.  The Bush regime stepped in and announced that a massive relief package had to be enacted immediately in order to stave off a far more cataclysmic financial collapse and general worldwide depression. 

Democrats and Republicans hearing the call of their masters via the lobbyists who engineer their government favors, quickly fell into line.  Unfortunately some of the wackier Republican members refused to go along with the transfer of yet another trillion dollars from average citizens to the wealthy and so they had to be bribed to the tune of $150 billion in "sweeteners" into supporting this giveaway and it got passed on the second attempt in less than a week.

All during this crisis and continuing to this day nearly everything about this bailout package and how the money should be used has focused on propping up the failed banking system.  In Europe they are taking a straightforward and honest approach by simply buying large numbers of shares in the various "distressed" banks and calling the shots as any major stockholder might do after rescuing a company from insolvency.  Not so in America.  Here we are doing far more to give this money away with as few strings attached as possible.  This means that in return for the billions taxpayers are shelling out, the banks will have few, if any real or enforcable obligations or responsibilities to fulfill in return. 

The hogs are really begining to feed at the trough now, to paraphrase the once powerful David Stockman, over this newfound source of easy money.

Returning to the beginning of this post let us pause to reflect that much of this could have been avoided if only homeowners could have continued paying their mortgages.  But there has been precious little discussion of how to assist homeowners in doing this.  Obama's anemic proposal for a 90 day moratorium on forclosures is so ineffectual that it's tantamount to a cruel joke and even if it wasn't is a startlingly inadequate response to the problem facing millions of families regarding their mortgages.

Right now, there are 10,000 foreclosures daily in this country.  How would a "moratorium" help any significant number out of that 10,000 daily foreclosures group?  It wouldn't.  Remember, that means about 300,000 foreclosures monthly which is roughly 3.6 million foreclosures within the next year.  Meanwhile, the entire focus of Washington remains on enticing the greedy bastards who engineered this crisis to start loaning money again.  Unfortunately, those greedy bastards are now hoarding money because they want their ill-gotten gains cake and to eat it too!  In many cases, if not most, the banks themselves could renegotiate terms more suitable for the borrowers so they would continued to be paid monthly but they are so greedy they will not provide any such relief on their own.

I have thought for some time, that the best means of stopping the bleeding in this crisis is to start approaching the problem on the front end instead of on the back end.  Why not help homeowners keep meeting their mortgage obligations directly and thus forestalling an ongoing collapse?  Ater all, it will be the very people who are being helped and their children who will have to pay back all the taxpayer money being used for the bailout not the bankers and financiers.  Once American families receive the direct support they need to maintain their mortgage payments on their homes, the uncertainty factor is effectively addressed.  There are a number of ways of achieving direct assistance to homeowners, but one example is in Italy where they passed legislation that simply required all adjustable rate mortgages in the country to be returned and fixed at the original rate.  That way, the bank continues to have the original loan obligation repaid, but at a reduced profit and it doesn't require taxpayers to bribe the bankers to do it.  Seems a pretty good deal for the banker when the alternative is the homeowner walks away leaving the banker emptyhanded.  There are other means of achieving this same sort of relief to families but my point is that is can and should be done but that neither Democrats nor Republicans are even attempting to advance any sort of policy approach even resembling direct relief for homeowners.  Why?

I believe it is because over the past thirty years, as more and more Congressional Democrats have been cozying up to and carrying the water for corporate interests, they have lost touch with why they were sent to Washington in the first place.  I dont' think anyone would realistically expect the Republicans to attempt any kind of relief for regular Americans so it is to the Democrats alone that most people look to for some leadership on most issues.  Sadly, for the regular American of today, unless and until Democrats realize that they must choose between those who actually elect them and the corporations they have become so accustomed to responding to, there will be no real change in the way things get done in America. 

I believe that few of the leaders in either party understand the catastrophic magnitude of what has happened and what the implications are for the regular American family in the coming years.  It is 1929 again and they are all acting as though it's just a bump in the road.  It's not.  Capitalism has, once again, failed in spectacular fashion and it is once again time for another New Deal.  Will Obama, Reid or Pelosi understand this assuming Obama is elected?  Will any of them understand that if they do not act quickly when the next Congress opens that things will continue to grow worse and worse and worse?   I doubt it and I won't be changing my opinion on it until I actually hear something out of any major leader in our government about directly, massively and quickly assisting the average American family with as much unfettered financial assistance as they are providing for the fat cats who built the house of cards and knew all along it could not be sustained.