Big Short, Big Shaft

“The right will always invoke an enemy within. They will insist on a distinction between real Americans and those who say they are but aren’t. This latter is your basic nativist amalgam of people of the wrong color, recent immigration or incorrect religious persuasion.” E.L. Doctorow, Notes on Art & Politics

My wife and I saw the Big Short a few days ago, a fine, clever film based on the book of the same name by Michael Lewis about the collapse of the American housing market in 2008. This calamity, engineered by the unfettered greed of the big banks, legions of mortgage brokers and real estate hucksters, with assistance from the Federal Reserve, Standard and Poor’s and Moody’s, and gutted regulatory agencies, caused widespread misery in this country – homes, jobs, and savings obliterated practically overnight – that is still being felt today.  

The Big Short captures the exuberance of the gamblers – those clever and cunning people who figured out how to bet against the American housing market and win – as well as the rapacity of the financial industry. As we all know, or should, the major banks, along with AIG, received millions of taxpayer dollars to remain solvent. In fact, in a perverse twist that could only happen in a country held captive by its financial industry, some of the banks emerged larger and more powerful than they were before the collapse.

I remember thinking at the time how glorious it was to be an American banker. You billed yourself a capitalist, praised “free markets” and the glory of being unfettered by annoying government oversight and regulation; you made risky, even criminal wagers on complicated financial instruments, and then, when the house of straw imploded, took money from the government with both hands as if being rescued by the hapless taxpayers was your divine right.

Is this a magnificent country or what?

In another perverse irony, former executives from Goldman Sachs and other Wall Street firms were tapped to lead the nation out of the wilderness. In a world flipped on its head, the thieves became the police. How they must have laughed as they shuttled from Wall Street boardrooms to the corridors of power in Washington.

It wasn’t so easy for folks in the states hammered hardest by the fraud, including Florida, Arizona, Nevada, and California. Mortgage loans were easy to obtain before the bubble burst, all you needed was a pulse and a signature and the home of your dreams was yours along with the expectation that its value would appreciate forever and ever. When reality reasserted itself, millions of people were ruined.

Eight years later, the crash is almost forgotten. Once the Occupy Movement was silenced, 2008 has been out of sight, out of mind. The Obama Administration and the mainstream media have pushed the narrative of recovery, of job creation and a rising stock market. Isn’t capitalism wonderful? Oh, how the invisible hand corrects itself. Try that line out on the man who lost his house, his job and his pension. What we have in America now is socialism for the wealthy and austerity for the rest, and when the wealthy and powerful fuck things up, the poor and weak pay for it.

Eight years on and an organization called Keep Your Home California still runs TV ads promising help for homeowners on the brink of foreclosure.

The Big Short might as easily been titled, The Big Shaft.