Posted with permission from www.socialistproject.ca/bullet/
by Stanley Aronowitz
Socialist Project | The Bullet
December 26, 2008
The main news these days is the global economic crisis, an event ascribed by economists and most pundits alike to a “financial” meltdown caused by the irresponsibility of mainly, but not exclusively, U.S. lending institutions and consumers in offering – and accepting – “sub-prime” mortgages. The variable mortgages, initiated during the credit driven bubble of the 1990s, and welcomed by the Clinton Administration but accelerated in the first six years of the new century, require home buyers to put no money down. Interest rates, which begin at 5%-9% are fated to rise within a few years, after which they could double, triple or more. In September 2008 we began to hear of massive foreclosures in almost all sections of the country as the first round of ballooning rates took effect, and the projections for 2008 and 2009 were for 2 million homes, six percent of the U.S. total to go into serious default. New home construction came to a screeching halt and commercial building suffered only slightly less pain.