The Lending Crisis Is Becoming a Poltical Battleground

By Danny Schechter, AlterNet. Posted December 3, 2007.

So where is this credit crisis going? How will it end? What's the prognosis?

As the citizen of a country without an attention span, everyone wants some else to play forecaster and tick off what must be done. And they want it quick and simple even though there are no real quickie responses to a complicated problem. Almost any reassuring soundbite will do. The questions are predicable. What should I do to protect my money? Can't they fix this, after all our economy is supposed to be, oh so, "resilient?"

And yes your government is trying. George Bush doesn't want to leave office with two million families in the streets. He doesn't want a legacy worse that Herbert Hoovers. The loss of the incompletely managed war in Iraq is a tough enough burden to carry around.

Its probably truthful but not helpful to say that the mismanagement of our economy is an outgrowth of the very corporatist policies that will haunt this country for decades to come, including costly wars, and obscenely high levels of corruption and the list goes on.

This crisis, however is a bit different because it has built in intensity for years without much visibility or attention. It speaks to structural problems in an economy built on the quick sand of debt and delusion.

In order for the economy to function, in order for consumption to continue and profits to keep flowing, people have to believe that everything's all right. They want remedies modeled after Alka Seltzer. Put one tablet in water. It fizzes. You drink and feel better in minutes.

The truth is that confidence is eroding not because "the masses" hate capitalism but because our brand of unregulated capitalism is increasingly not working for them. They know that because prices keep rising and good paying jobs are harder to find. They know that because crime is going up in many cities, and it's harder to make ends meet.

And some even know that the very concept of the masses has been replaced by highly stratifies classes built on growing income inequality.

The credit cad companies are now encouraging us to pay our rent by charging it, They have jacked up their fees and passed rules that just somehow leads to more late fees and other charges which have doubled and tripled by fiat. Some economic wise men believe that the credit card bubble is the next to go in a widely predicted severe recession.

Personally, I don't know will happen with any certainty.. It is possible that we will bounce back from the precipice somehow. The big chiefs of our economy have done it before. There are whole industries at risk if we don't. There are a large number of wealthy people and institutions who want to get back to the business of making money. They have a strong self-interest in "normalizing" the system.

What's "normal" for then is of course why we are in the trouble we are. At the same time, many of the free marketers argue that all is needed is a correction of some undefined kind to put the "fundamentals" in line and bounce back. Capitalism has had history of boom and bust cycles and recoveries because there is no perceived alternative. And yes a depression is not out of the question.

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News Dissector Danny Schechter directed In Debt We Trust and wrote "SQUEEZED: America As The Bubble Bursts" (Coldtype.net). Comments to Dissector@mediachannel.org

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