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predatory lending would have been a problem had there not been reagan-period deregulation of banking. the earlier version of the subprime fiasco, which was called the "savings and loan" crisis should have been a signal that something was seriously wrong--that was brushed aside...i think you can make one argument that the effects of subprime mortgages follow from the ideologically driven incompetence of the us state. so that's one.
another is the same kind of realpolitik that issued in the bear-stearns buyout: this sector of homeowners may be too big to be allowed to just go under without generating political consequences that are potentially unacceptable. maybe the political legitimacy of the neo-liberal state is at stake in it.
or maybe the calculation is the obvious one: without some help to the folk who are getting foreclosed, but with help to bear-stearns and other financial institutions, the Interests of the state become a bit too transparent, even for the comfort of the right.
i'm not sure that the crisis we are tipping into is driven by this alone, however: most of it seems to be a function of the transnational trafficking in debt as a commodity, which is itself the leading edge of maybe other problems to come as the consequences of the range of new financial instruments the nature of which i don't entirely understand (but i'm working on it) since the reagan period start to surface.
this is a multi-pronged cluster fuck--so at bottom, i think most of the moves are political face-saving and ass-covering--system protection in short. none of the moralizing interpretations of borrowers seem relevant. and i don't see their problems as in themselves motives for any state action.
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a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear
it make you sick.
-kamau brathwaite
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