Wednesday, July 01, 2009
The housing meltdown in the USA seen from another perspective: the overly generous mortgages offered to American lower classes were not designed to curry political favor with them. For those who followed he matter, it must have been obvious that these people would not return the monies lended to them and the whole mess was bound to end badly. The idea behind the mortgages was to create demand for houses, to generate work for the large building industry. Building is the main economic activity of the American working class, and while the housing boom lasted, they had full employment and took home good salaries. They could maintain families. Recession is here and they have no proper function in economy and no way to maintain families. They are dependent on their wives's service jobs and not very proud of it. This situation, if lasts, will lead to social patologies such a alcoholism and violence, a la Eastern Germany and Russia.