3 August 2010: Plunder: The Crime of Our Time
("Never before have so few done so much to so many")
As an economically challenged but concerned activist, I have learned most of what I understand about today's economic morass from my good friend Danny Schechter, producer and director of the films In Debt We Trust and Plunder: The Crime of Our Time.
In Debt We Trust
The film begins and ends with protests by enraged foreclosure victims, members of the middle class whom the film describes as financially desiccated by the upper class in this country. Basically, they were manipulated into signing adjustable-rate mortgage agreements that they could not afford, seduced by the American dream of the possibility of occupying a home more luxurious that their realities. The interests associated with such mortgages could start out at one percent and quickly skyrocket to 7 and then 9 percent interest rates, devouring the victims' entire monthly wages and then some, plunging them into bankruptcy as well as foreclosure or ruining their pursuit of happiness by the threat of both disasters from this "financial Katrina."
But before that happened, such subprime loans would be bundled by the banks and sold to investors, who would package them with other instruments and resell them to higher-level financeers. These moguls would flood giants like AIG with insurance premiums.
As a result, there was a real estate boom followed by a real estate bust as higher institutions like Bear Sternes and Lehman collapsed, passing on their diseases to most smaller banks, with behemoths like World Bank devouring the small and medium-sized fish (this happened to my DC-area bank, recently purchased by Capital One).
Meanwhile, decisions from U.S. Treasury Secretary Tim Geithner and the "head of the Fed," Ben Bernanke, dictated a way out: financial bailouts to save our economy and ward off a massive recession that would reverberate worldwide.
Who would be bailed out? We were all in distress. The taxpayers, source of the funds that would save the world, or those who so abused the funds and forced so many of us out onto the streets?