This book starts out with a bang.
1933. FDR has just been elected president. "He inherits the worst economic crisis in the nation's history. An era of rampant speculation had come to an end. The stock market had collapsed, rendering investments valueless. Banks were shutting down, stripping people of their lifetime savings. About a third of workers were unemployed; wages were falling; tens of thousands homeless. Real estate prices had plummeted, and millions of homeowners faced foreclosure."
This reads like the headlines in today's newspapers.
Back to 1933..."People took out what were called 'bullet' loans, which were interest-only loans that buyers were told they should refinance in three or five years. Lenders told home buyers not to worry; homes were rising so fast in value that it would be easy to refinance into another loan."
Sound familiar? Too bad people didn't remember this didn't work in 1933 and so why would it work in 2008? Thank you Alan Greenspan!
I just saw Michael Moore's new film "Capitalism, A Love Story". It needed some editing, but told a raw story. He shows footage of families being evicted from their homes because they haven't made their house payments. Part of me asks, "so why did they borrow so much money, it's irresponsible" but now I'm asking what kind of banking system purposely loans people money they know they'll never be able to pay back just so they can make a processing fee. So who's to blame? Where's consumer protection?
But what about Francis Perkins? She worked for protecting the laborer at a time when conditions were awful. She's a gutsy lady. After graduating from college against her family's good advice she moves to Chicago where "immediately upon arriving, she reinvented herself. She changed her name, her faith and her political persuasion."
If women are all about change she did an amazing job.
More later, I have to go feed the cats...
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