I think I’ve got it…


This economic mess has been a long time abrewin’. There are a lot of things we can point at and say that’s where it started. My belief, as I have written before, is that it started with the Reagan/Bush/Cheney/McCain economic philosophy. It assumed that economic growth stems from wealth starting at the top, among the wealthiest, and trickling down to the rest of us. The tax policy corollary of that assumption is that the taxes paid by the rich should be reduced as much as possible.

Jump now to the year 2000 and the start of George W. Bush’s presidency. His tax cuts disproportionately favored the wealthy and initiated the largest transfer of wealth in our history. Since then the top couple percent of our population has had a huge increase in their income, and the rest of us haven’t had a raise,

Both groups, the rich and the rest of us, developed serious problems. We saw our buying power decline. It became harder to buy groceries and gasoline. Medical bills became more of a burden. Cars got more expensive. Higher education became less affordable. The rich, on the other hand, had to figure out where to invest their money.

The solution to both problems — real estate.

The rich could buy expensive condos and flip them. They could buy mortgage backed securities. Home prices would go up. The rest of us could refinance our homes and use the equity to pay bills.

Oops. We now have to pay for food, gas, health care, college, a first mortgage and an adjustable rate home equity loan that is going to do what? Reset? OMG!

Oops. The rich have flipped condos like pancakes, but there is no one left to eat the last one. Just why can’t the poor pay their debts?

If the money didn’t trickle down, where did it go? Is it under shell number one, the rich? Or shell number two, the rest of us? Or shell number three, Halliburton?


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