We the People – Too Big To Fail

         The Wall Street protests have reminded me of a question I asked in a Brain Drops blog post back in December of last year. I never did find an answer, and never really thought I would. It’s one of those unanswerable questions we wail into the wind hoping to relieve the frustration. But it’s a question I hope every homeowner in America will think about while you decide whether you are going to support the people out in the street; whether you are going to add your voice, write a check, send some pizzas to the protesters, maybe even march yourself.

 Why didn’t the government save the banks by saving the homeowners?

 I’ve asked and I’ve asked, but no one has ever been able to explain to me why “we the people” who are supposed to be the government,  could not have taken those same tax dollars we handed over to the banks, and bought all those bundles of bad mortgages? The banks would still be re-capitalized. Saved. Relieved of their bad loans. But the real estate market might also have been saved. Many of those homeowners who were foreclosed on might have been saved.  Home prices, and home equity might have been saved. Instead we rewarded the banks that caused the recession with an influx of our tax dollars Yes it was  a “loan”,  but a loan repaid with money the banks raised by hiking interest rates and charging “we the people” every kind of fee they could concoct. In reality, “we the people” paid the bail-out money and “we the people” repaid the loan. The bankers? They got bonuses. Ask the Wall Street protesters what “we the people” got.

If our government  had purchased that bad paper from the bank (presumably at a discount) for the next 20 or 30 years, “we the people” could have acted like a credit union, holding the mortgages of our fellow citizens. Our goal could have been to keep as many families in their homes as possible. We could have rewritten the terms of those ballooning ARMs. Given fresh starts. We couldn’t have saved everyone, certainly not the speculators, but I bet we could have saved enough primary homesteads to cushion the real estate market. Maybe all that equity would not have evaporated. Poof, gone. They’d still be buying and selling and building houses which means jobs jobs jobs.  But hey, Wall Street’s went on booming. Now it’s going to be booming with the voices of “we the people”.

We may have lost sight of the fact that in America “we the people” really do have the ultimate power. The Citizens United decision tried to take that from us, but the thirst for fairness is something that can’t be legislated. It is in our DNA. We are the many. They call themselves “leaders” but they are the few. They may think “we the people” have been effectively sidelined. Benched. Hobbled. Forgotten. But surprise Wall Street! Surprise Washington! Surprise to every governor and state legislature  in the nation. Surprise all you greedy bastards everywhere, “we the people” are on the playing field.

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