Web Letters: Smashing Capitalism

Aurora evolved from a small town east of Denver to a bedroom suburb, and now in the words of the Aurora Association of Realtors in their 2004 Newsletter (on their site: "It's the 3rd most populous city in Colorado and the 62nd largest in the country." Lyn (a native Auroran) and I (a native Cozad, Nebraskan) like to road trip, get out of the burb, and she's had to listen to me ask a hundred times as we're motoring through a new housing development sprawled across what used to be peaceful pastureland, "Who the $%&@!'s buying all of these ticky-tacky (credit Malvina Reynolds) pieces of @##&*%!@%?"

Back then middle-class suburban houses were more box-like in the sense of what normal people considered to be "an affordable box." These days, houses are akin to "shipping crates" delivered to eager homeowner wannabes who placed their order using the COD plan ("credit on demand"). (Recently, there are lots of "For Sale" signs in front of those crates).

Bill Richey

Aurora, CO

The people here who are complaining about "personal responsibility" are missing the point. We are in a situation where many, many people fell for these mortgage scams. You can call them irresponsible, stupid or whatever you want, but so many people made the mistake that clearly there's a systemic problem. If any of us were in their shoes, we might have made the same mistake. Anyway, if we believe (as most of us do) that even so-called "irresponsible" people deserve a home and a decent standard of living, then we educated elite who read The Nation should not blame those who don't have our advantages.

Overall, I think this article is thought-provoking. But as for Ehrenreich's comments about social democracy and socialism, they're superfluous. We don't need to endorse a previously established system to be effective protesters.

Greg Pinsky

New York, NY

Anyone who was paying attention could have predicted this train wreck coming for years. These lenders are called "predatory" for a very good reason: They prey on the the working poor who want nothing more than the American Dream of homeownership and a better life for their families. These folks, the hardest working amoung us arguably, were targeting by print, television, mailings, infomercials, internet popups, ad nauseam offering them what they thought they could never achieve. A home of their own. Most of us, when buying our first homes, felt like we may have bit off a little too much, but with fixed rate mortgages things (thankfully) got easier with time and a few pay raises. OK, so much for mortgages. Then we have the home equity industry, which has been throwing these come-ons in our faces everywhere we look (that poor sad man who "lost another loan to Ditech"). Does anyone not yet realize that the billions in equity that people have taken out of their homes in these last few years have been what has fueled this so-called "great" economy. Helloooooo? Salaries across the board have fallen for the fifth straight year. And so here we are and lest the poor investors participate in any suffering the fed is bailing out Wall Street once more. It's all been a house of cards, and the article gets it exactly right.

Joanne Kelley

Gales Ferry,, CT

How ironic that Ms. Ehrenreich laments systematic capitalist exploitation the poor, while at the same time fantasizing of a financial revolution where the burden would be borne by... The Poor!

Why should she have to take the lead? Let the poor default on their mortgages, lose their homes, and destroy what is left of their credit ratings. We can't honestly expect the author to sacrifice her luxuries in the quest for economic equality, can we? Funny thing is, the poor are the least well-equipped to incite financial chaos because they are, well, poor. Those more well-off among us would inflict far more damage by stopping their mortgage payments and other spending. But we all know that would require sacrifices the author, and others pining for a new financial order, are unwilling to make.

The most amusing part of the whole fantasy is the inherent contradiction. On one hand, we have the poor who apparently lack the mental processing ability to recognize a loan they can't afford and the associated consequences of borrowing on such terms. On the other hand, we have the poor organizing a complex scheme of mortgage defaults and limited spending in order smash capitalism. Then again, it is only slightly more believable that a small percentage of subprime defaults and lower than expected big-box profits are evidence that capitalism's long term survival prospects are bleak.

Kevin McCabe

Mentor, OH

Jonathan [Sager], I'm glad you cleared up my confusion. I thought the 20 million people who were murdered in the USSR died at the hand of a communist government. Now I learn that they died at the hand of an authoritarian government.

Too bad we couldn't have made that distinction clear to them before they were snuffed. I’m sure it would have made death a little easier to understand as just one more example of social injustice.

But I guess I'm still afflicted with 1950s US propaganda. What's the difference between communism and authoritarianism? As F.A. Hayek made incontestably clear in The Road to Serfdom, the lofty intentions of one system inevitably lead to the horrors of the other.

Ben Rast
The Bastiat Society

Columbia, SC

I can't believe this author's poor reasoning. She crows about the potential fall of capitalism so that it may be replaced by Latin American-style socialism? What--to be lorded over by some supreme leader à la Castro or Chávez? I'll take my chances with a creep like Bush any time.

As for all those homeowners in trouble. Too bad. What they did wasn't much different than gambling. And they lost. I sure don't want the government to bail them out with my money. As for the greedy lenders and brokers, the market is taking care of them through massive layoffs and big stock losses.

The author's pithy view of these homeowners is typical of the paternalistic attitute of many liberals who view the working poor as children who can't possibly know what they are doing.

Vincent Hamon

Los Angeles, CA

I'm glad to see an article containing critiques of global capitalism in this magazine. It seems hard to believe that humans will ever reach a perfect politcal or economic practice, but that doesn't mean we shouldn't progress as much as we can. The outcomes of capitalism are apparent. Wealth becomes dispropotionately allocated (by a system that does not allocate wealth according to anything tangible--few rich work, many poor do) and monarchies of capital are created. Some of the criticism of this article in other web letters are narrowly focused in their view of the "poor." Global capitalism affects the global economy. The majority of the "poor" population exists outside of the US. Should citizens hide behind the boundaries of nationalism when it comes to the social injusticies their "nation's" economy is inflicting upon others? I would hope the answer is no, but it seems too many people with adequate wealth are too comfortable to want to change how they live. However, I sincerely doubt mankind has reached its ultimate achievement with capitalism; politics and economics will always be changing.

P.S. I wish people would realize that a true communist government has ever been established. Pointing at Russia and China is pointing to authoritarian governments, which is diametrically opposed to communist theory. People need to forget 1950s US propoganda.

Jonathan Sager

Pittsburgh, PA

Individuals make decisions. Sometimes bad sometimes good. If you screw up, learn from your mistakes and move on. In some cases you cannot help. In the immortal words of Ron White, "you can't fix stupid."

J. J. Gahr

Charles Town, WV

Wal-Mart is a big part of the problem here. Look at where most of their merchandise is produced. It isn't in the USA. No, most of it is imported from China. They pay their workers cheap, then those workers have to scrimp on what they buy. I could afford Wal-Mart, except I refuse to waste my money on their cheap imported stuff anymore! Why waste hard earned money buying poorly made stuff when it isn't a necessity?

Whoever came up with this "global economy" also caused this problem. There need to be more than Wal-Mart or "service" jobs available to get this economy rolling! Bring manufacturing jobs back so anybody who wants a job can get one the first attempt! People shouldn't have to walk the soles off their shoes trying to get employed! Nobody should have to get "educated" to get a basic job that they can do. Another thing is housing being built. Do builders think there is going to be a market for all those huge homes they've sprouted all over the country? How many fancy "homes" do they expect billionaires to be buying? Maybe if they built smaller-sized houses then priced them to where people wouldn't have to max out their credit to buy them, they'd be able to sell more of them.

The government should raise tariffs on imported cheap stuff to match what Wal-Mart would have to pay if they bought the same American-made stuff for stocking their shelves! Maybe then we could have more production jobs brought back to this country. Make capitalism work as good for poor people as it does for the rich people and maybe we can get the economy back to what it should be.

Lisa A. Cate

Ava, MO

Aren't you folks at The Nation the ones always demanding that people who can't afford a big loan be granted a big loan, regardless of income and assets? Seems to me you're the ones who helped create this problem. Hypocrites.

Mike Long

Washington, DC

If Wal-Mart employees should have income sufficient to buy the in-store goods, and Ford was genius in setting the employees about buying Fords, ya gotta wonder about those folks working at Tiffany's and at the local Bentley dealership.

I couldn't make up such silliness!

Carl Lendro

Houston, TX

I am surprised that you ignore the fact that there are free programs that teach a person to how to buy a home. You cite lack of education as a reason people bought into the sub-prime loans. Fannie Mae has free seminars that give poor people both good information and even help in purchasing a home. They don't push you into more home than you can afford though.

Where does personal responsibility come into the picture? If one chooses to make such a large purchase with no understanding of how the process works or what the loans are about, how can you in good conscience blame the lender above the buyer?

I am always stunned by people who absolve other adult people of responsibility due to poor education. Being uneducated is a personal choice. People in this country are given the opportunity to become educated. One can educate oneself by simply reading books from the library instead of sitting in mindlessly front of a TV.

My mother only has a eighth-grade education. She is self-taught through reading. I learned my ethics and that I can continue to learn out side of a classroom from her.

How demeaning your article is to the people you profess to speak for. You make them into less than competent to live in the world as adults. You infer they are not capable of making good decisions. Being poor does not automatically mean you are stupid and illiterate.

Sue Weible

Marietta, GA

"Get The Nation at home (and online!) for 75 cents a week!"

"If you like this article, consider making a donation to The Nation."

How the heck am I supposed to afford that?! According to you, I should be a miserable wretch fighting off the predatory loans that will eventually break me and the rest of Western civilization... But at least I'll be able to read The Nation.

Cameron Sholty

Milwaukee, WI

A few more smashing victories like this one, and the "low, strangled, cry of pain" of the poor will rise to howls of indignation at a system that makes them wait in line for basic necessities (when they are available), offers loans only to those who don't need them or those who are politically well-connected, gives consumers their choice of empty shelves, but does all this with a nice color scheme, most likely red.

Ben Rast
The Bastiat Society

Columbia, SC

The "poor" are the ones most excluded and marginalized by economic failure, as in Zimbabwe. Mugabe has done the Marxist routine by the numbers, and what is the result?

Poll after poll shows that people want mobility and a chance to earn more tomorrow than they did today. Being on the government dole, or subject to centralized planning economies so dear to the heart and anti-capitalists everywhere, have failed and will continue to fail to produce this kind of mobility.

It isn't that the right people haven't been in charge. It is that freedom works, in the market and politically. You cannot have economic freedom without political freedom and regulatory freedom. Some people will fail and others gain, but the pie is not zero-sum and more win than lose. It is not so tidy, and people like you don't get to run others around, but who said tidy was always good, or that you are smart enough to decide what others should eat for dinner?

I couldn't be Larry Ellison if I had his money, but I am glad he does. His excess provides a lot of jobs that make a lot of people pretty happy. Ever see a poor man hire a house painter?

George Schirtzinger

Pasadena, CA

Boo-hoo-hoo. I think I'm going to cry. My wife and I thought about an adjustable rate mortgage when we bought our house 4+ years ago. We thought (yes, we actually thought for ourselves. How unusual, ay?) the better of it. Looks like we made a pretty good decision. (Yes, we made our own decision. What a radical notion, yes?)

I think after work today, I'll go camp out across the street from a pay-day lender and see how many customers are forced in the doors by that lender to do business. Obviously, that's how all these lenders obtain these people's business, right? These people don't actually make their decisions on their own, correct?

How silly of me to think that people should be responsible for the decisions they make! Whatta dummy I am, duuuuhhhh!

Chris Baecker

San Antonio, TX

Ehrenreich's gleeful outburst as to how the downtrodden have tricked the greedy capitalists into giving them the opportunity to live in a nice home of their own without the wherewithal to pay for such accommodations is some of the most inane commentary written. Now these po' folk are going to push the US economy into a recession because they are all going to default on their mortages and stop buying groceries and home improvement items. After that, they are going to march in the streets and sing the "The Internationale," while the government crumbles and a worker's paradise is put in place. All because some third-tier lenders agreed to make highly risky loans to people unaccustomed to such largesse.

This woman needs to get a better understanding of how our economy works, beginning with the concept of purchasing power, who has it and who doesn't. Hint: The poor don't have much to begin with, that's the definition of poor. Therefore, their not showing up at Wal-Mart isn't going to have much of an impact one way or the other.

Robert Gruber

Fairfield, CT

Well, I am sure people had a variety of reasons for getting these loans. Some people used them for investment purposes, because bank interest rates are low and real estate increased quickly in value. It looked like a good deal. This "quick" increase in value was caused by this speculative bubble, that was bound to burst. Wall Street speculation came down to Main Street.

However, the basic fact is that even for the "middle class," wages are going down. Without a consumer class that doesn't have the money to consume, the great internal American market will disappear, and even Wal-Mart is feeling the pinch.

Additionally, with this globalized economy, if one part sneezes, everybody catches a cold. In the Dictionary of Military Terms, one aspect of the word "dispersion" is "the spreading or separating of troops, material, establishments, or activities which are usually concentrated in limited areas to reduce vulnerability." Using this definition, a globalized economy increases the possibility of global economic failure. Decentralized national economies spread the risk around, and economic failure in one part of the globe reduces the effect of that failure for the other parts of the world.

However, under "free trade," with the disappearance of the middle class, I would not be surprised by groups and nations seeking radical solutions for the poverty that will result from this practice.

Pervis J. Casey

Riverside, CA

Where do I begin?! Ehrenreich's hatred of capitalism, and probable love of socialism and most likely even communism, is so reflexively cliché and sophomoric. There are several reasons why the US is the most powerful country economically, and capitalism is up at the top of the list. Even "the poor" have multiple amenities such as more than one TV set, personal computers, DVDs, et cetera, et cetera. I doubt "the poor" in your beloved socialist and communist utopias can claim the same.

Yes, the subprime lenders were scum, but the market will deal with them accordingly. People need to be responsible for their own actions and quit blaming others for their stupid (and dare I say selfish) mistakes. It doesn't take an MBA or rocket scientist to figure out that after twelve or twenty-four months, your payments will be beyond your means. And there's the rub...living beyond your means. If you can't afford it, you shouldn't be buying things on credit and crying later when you can't make the payments. You should never have bought the thing in the first place.

Paul Healy

Reno, NV

Home Depot and Wal-Mart have a bad quarter and you think that spells the end of capitalism? Sorry, but communism has had a bad existence, yet it's still around. And somehow I daresay capitalism will survive this too.

Michael Peters

New York, NY

I find it unfortunate that one of the letters posted here assumes that the author is speaking for them. The writer of that letter appears to be doing just fine, so what would make him think the article was about him? Stupid.

My wife and I are also poor, paying a mortgage and doing just fine. That doesn't mean that we are all laboring under the same circumstances.

And the other writer has obviously never been poor, and at the mercy of the filth that rules over our economic system.

Doug Reeves

Kansas City, KS

If the stupid bastids in Boston didn't get a lawyer to go over the fine print, it could have been because the sartorially suited lawyer "went over it" when she wrote the fine print.

Class action maybe? Class action is where upper-class lawyers in classy suits protect the put-upon under-class from deceptive professional practice.

Lawyers get to "go over it" again--it's due process and the rule of lawyers. Ain't no other law game in town.

Gerald Spezio

Willits, CA

My wife Lisa and I are the people for whom Ms. Ehrenreich thinks she writes. We're currently struggling to make our monthly payments on time so that we may refinance our mortgage and achieve a more favorable fixed rate.

My wife and I are educated people who knew exactly what we were doing when we got into this mess. My wife had just embarked on her new career as a realtor when we bought our house. We hoped she would have more success, as I am a public school teacher on a fixed income, and my income alone does not pay our bills.

We were glad for the opportunity to move our growing family from the house we rented to the house we own. We remain optimistic, but if we fail that failure belongs to us. You ask us to blame the wealthy, as if their success has somehow come at my expense. Most irrational. I pity the fools who are comforted by your words.

Donn Sierra

Columbia, TN

Oh, yeah, Barbara, I'm a dirty, filthy capitalist so I want to loan money to poor people in such a way that I will then lose my money. Hmm, why does that sound, well, stupid?

Mike Kious

Albuquerque, NM