For those who were not paying attention the last time around, it was not just the pervasiveness of highly leveraged mortgages that endangered the economy, it was $4 a gallon gasoline. I don't intend to let the government off the hook here, because the demand on banks to honor the Community Reinvestment Act of Carter's Administration had a lot to do with it.
The fear of banks to use their own standards for lending money on mortgages began back in the Clinton Administration when Attorney General Janet Reno promised to vigorously enforce the Community Reinvestment Act passed by Carter. The Clinton Administration even sought strengthened powers in order to do so. The threat helped to encourage a lax lending system, but it wasn't until the Bush Administration that the government actively sought to further home-ownership by encouraging lax standards and allowing mortgage lenders to bundle mortgages into Mortgage Backed Securities which fractionalized the mortgages and has led to the fraudulent foreclosures by banks who don't even know how much of the mortgage they own on a given property.
That is all bad enough, and yes, I am aware that the Bush Administration tried to rein in Fannie Mae and Freddie Mac, but I am not exactly prepared to argue out the mortgage mess, except to point out that even with all of these dangerous mortgages floating around the crucial issue did not arise until gasoline topped $4 per gallon and it will do it again.
Those who live in ivory towers might not quite understand that us at the lower levels of society work to make enough money to pay our bills. Once a week, or month, or quarter there might be enough left over to have a beer in a tavern, or go to a movie. Things are even tighter now than they were before the initial collapse. Those of us who have survived are not yet thriving as we were before 2008. Our budgets are tight enough to play a tune on. Just as before, if you take another $200 a month out of that budget to pay for the same amount of gasoline we are already paying for, the system will come tumbling down again, only this time there may not be enough financially stable families to pick up their obligations and move forward. It might just be the end.
Those of us who have spent everything we had on getting debt-free cannot now take a drubbing on our budgets and maintain our homes, the one thing left to be paid off. To be honest, I may not even try. I may take whatever cash I can and just move along. I may take the gold and silver I have converted my savings into and bury it, then stand up and let the vultures have whatever they can get.
It may very well be the dawn of the middle-class rebellion, where we all just walk away from our obligations the way the big banks and brokerages walked away from their debts with government assistance. It is about to get mean.