Raghuram Rajan, the IMF’s former chief economist, argues that the subprime debt build-up was an attempt – “whether carefully planned or the path of least resistance” – to disguise stagnating incomes and to buy off the poor.I have observed that mainstream media has managed to condition the American people to view any taxes as evil incarnate. I came to this realization quite recently with the results of a ballot initiative in Washington State that called for an income tax on people earning over $200,000 a year. It was defeated! As a result, this state, as many others, is drastically cutting back on social, medical, educational, and other government services that mostly impact poor people.
“The inevitable bill could be postponed into the future. Cynical as it might seem, easy credit has been used throughout history as a palliative by governments that are unable to address the deeper anxieties of the middle class directly,” he said.
In contrast, people have been led to believe that credit is just fine, that funding local infrastructure and services through the purchase of bonds is just fine, while signing up for onerous mortgage loans on homes was greatly encouraged and celebrated ("the ownership society'). Meanwhile the 30 year destruction of well paying jobs and the suppression of wages has continued. Do you see a pattern here?
Well, by design or not, the end result is what we have today--Americans and a large part of the world indebted to a tiny group of capitalists. Welcome to neo-feudalism!
