I had heard that the Federal Reserve has been buying mortgage-backed securities, many of them the so-called "toxic assets" that poisoned our financial system during the great recession. Now I hear that next week the Fed will quit buying these sketchy securities, and many of us are wondering what effect that will have on the money supply and economic conditions.
I had spent most of my adult life working as a free-lance, uninsured carpenter--although a relatively educated one, since I had earlier been a wandering English major. I had watched the housing industry inflate fairly steadily over twenty-five years or so. Like many other folks in America, I and my family were direct beneficiaries of that housing bubble, and the "securitized" financial bubble of false prosperity that exponentially inflated it until the whole damned thing burst in 2008. The construction industry was my source of wages during all those years, as well as being the source of economic fodder that fueled our steadily-growing home equity.
When the crash happened in fall of 2008, I was hearing from the free-market gripers that the socialist dems were responsible for the whole mess with their force-fed federal attempts to get unqualified buyers into houses. And I was hearing from the controlled-economy crowd that the unregulated greed of wallstreeters was the main cause of our downfall.
However, it's obvious to me that the culpability for our financial woes is widely dispersed. In a perfect storm of economic destruction, everybody did their part one way or another--including me, who earned, as a hapless carpenter, steadily-increasing wages during the 25-year filling of that hot-air balloon. When the shit hit the fan, the air was thick with theoretical accusations flying from both directions. The free-market crowd blamed the bleeding heart dems for having laid a sandy foundation of unqualified consumer mortgage debt with their overactive pie-in-the-sky housing policies. The liberals blamed the gaming wallstreeters for having built their derivitized, credit-default-swapped house of cards on that shakily-mortgaged foundation until the weight of it brought the entire structure down.
Everybody's right and everybody's wrong. Last time I checked, we were all still members of the human race, and that explains a lot about this whole damn situation. Deal with it.
And realize we still have the same problem that our grandparents had back in the '30s: their ain't no free lunch.
Anyway, now I'm hearing again about these infamous mortgage-backed securities--the ones that nobody knows how to assign value to. They didn't just, you know, go away. The tooth fairy didn't just remove them from beneath our dreamy, media-puffed pillows while we slept. Turns out, ole gentle Ben was quietly buying them, to remove them and their destructive effects from the system, although their toxicity seems now to have hopelessly polluted our political civility and even, perhaps, the integrity of our republic itself.
It's nice to know, Ben, that you were out there attempting to clean up our mess. But now what happens? I suppose we'll find out after next week.
Fasten your seat belts, folks; we could be in for a rough ride, and our national vehicle is in need of some pretty serious repair. It reminds me--not that I've ever seen one, mind ye--of a runaway train.
Or the situation described by C.J. McCall in his old country song hit from back in the day: "...Wolf Creek pass, way up on the great divide, trucking on down...the other side,"
with worn-out brakes.