Our Whiny Ponzi Middle Class
May 2, 2010 3 Comments
An unpleasant but unavoidable conclusion of this paper is that Wall Street was (and remains) a giant government-sanctioned Ponzi scheme.
Read the whole thing.
Earlier I stated that a lot of people who
borrowed “bought” houses in the past ten years, far from having some sort of legitimate grievance now against Wall Street for ‘causing the crash’, are actually folks who benefitted undeservingly from the Ponzi scheme that Wall Street enabled. I don’t begrudge Americans who played this game and made out like bandits, but when the bubble bursts and everyone starts blaming Wall Street for the fact that their Ponzi scheme did not continue forever and allow them to live a highly-leveraged, cushy, McMansioned life on other suckers’ money indefinitely, and insist that I – who did not really play the game – be taxed more to make up the difference, well that’s when I start to get fucking angry. And you wouldn’t like me when I’m angry. (Hell, people barely like me when I’m happy….)
Suppose you bought into a Ponzi scheme this year, and got $100k back, and were able to support yourself this year on that amount. Not only that but you made a bunch of purchases and plans premised on the idea that $100k would keep flowing to you yearly from Ponzi schemes. But then the next year rolls around and the Ponzi scheme stops paying, and you’re unable to find a new one that pays that $100k.
Do you have a grievance against the Ponzi arrangers for ‘causing a crisis’? Do you have the right to be self-righteously angry with them for your financial hardships?
Hardly. You made out like a bandit. You got $100k passed to you from Ponzi suckers further down the chain. Among these suckers were IKB and ACA Capital, the investors in Abacus 2007-AC1, who handed over $1 billion for nothing. They were at the bottom of a giant pyramid. If you’re a homeowner who
borrowed “bought” a nice house you couldn’t really afford, you were in the middle, not the bottom, of a Ponzi scheme. You have no grievance against anyone. If anything, people have a grievance against you.