The strong feelings of discontent among the American people revealed in the Pew survey, and in several other recent polls, have intensified over the past several years for a number of reasons. I believe this discontent has come about largely as the result of the Wall Street meltdown which started in 2007, and climaxing in 2008 when our nation’s economy was on the verge of collapse. One example of why folks are mad definitely involves Wall Street and specifically the Big Banks and for good reason. Working men and women, as well as retirees, also started to see executives at huge corporations making salaries in the $50 million range, some doing things that bordered on criminal and avoiding prosecution, and being paid huge severance packages when they were let go.
The housing collapse that almost brought about another Great Depression had a root cause that few people knew about at the time. Big Banks fraudulently packaged “bad mortgages” as securities and sold them, knowing the under-collateralized mortgages, made by property owners who couldn’t afford them, would result in defaults. By any standard, these were very bad investments. The series of events revolving around those mortgages took place over a relatively short period of time and involved practices that nobody outside the loop knew about and few people really understood at the time.
The public learned the hard way about such things as subprime mortgages, collateralized debt obligations (CDOs) and credit default swaps (CDSs). The banks sold CDSs through Goldman Sachs, which in effect became a middle man, making a huge financial killing in the process. Insurance was bought from AIG to protect the sellers of the CDSs when the mortgages failed.
Goldman Sachs made the scheme work by bundling good and bad mortgages, acquiring triple A ratings for the CDOs, which made the instruments very attractive, and the rest is history. We now know that companies like Goldman Sachs were actually betting on the bundled mortgages to fail. The executives at the big banks paid themselves huge bonuses, made a fortune, and during all of this our economy almost collapsed.
Our government bailed out the banks, at a huge cost to taxpayers, and more bonuses were paid out by the very banks that were bailed out. Sadly, these bonuses went to the very same executives. AIG received bailouts to cover its losses and the government hasn’t been repaid by the huge insurance company. The American taxpayers footed the bill for all of this. When people finally saw how the top executives at the big banks profited at their expense, they were “mad as heck,” and let the world know they were fed up. This widespread discontent is being reflected in all of the polls that I have seen. I don’t believe we have seen the end of this discontent and that’s bad news for those politicians who cater to the super rich.
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