There’s a reason why every middle class family in America should be independent voters. And that reason is self-defense.
From President Obama to Harry Reid and from John Boehner to Eric Cantor, Democrats and Republicans are wholly in thrall to Wall Street and the financial wizards who fund their campaigns. So if you are looking to Washington to help protect you, you’re looking in the wrong direction.
We all remember not that many years ago, when anybody who could fog a mirror could qualify for hundreds of thousands of dollars in a mortgage loan, or refinance and pull out hundreds of thousands of dollars of fake home equity, with virtually no loan underwriting standards. The result? Hundreds of thousands of middle class families lost their most precious asset—their home—to the banks.
If you look back at the economic meltdown of 2008, it had its roots in financial practices dating back to the 1980s and 1990s.
Back then, we saw predatory lending practices like payday loans and tax refund loans. Because the American Dream is home ownership, financial institutions invented subprime mortgage loans, especially for people who could only afford mobile homes or trailer homes. Of course those loans, which it turned out many couldn’t afford, ended up costing those families everything they had, including their new home.
Next, banks pushed home equity loans, so every family, no matter how poor, could buy those boats and motorhomes and ATVs and motorcycles and jet skis they wanted. They also began passing out credit cards like candy; credit cards with usurious interest rates, that is. Many financial institutions moved their credit card operations to states with weak or no anti-usury laws.
And where once you had 30 day billing cycles to pay your credit card, now you’re lucky to get 20 days. One late payment can trigger jumps in interest rates and fees that can cost you hundreds of dollars.
Think your bank is on your side? Think again. Your bank might give you free checking, and the “convenience” of a free debit card, but those were enticements to get you into their system. Many banks would work overtime to figure out how to manipulate paying the checks drawn on your account to put you in the worst possible financial position, while maximizing their overdraft fees.
Then financial institutions invented something called “universal default,” where if you missed or were late with a payment with just one of your lenders, that action triggered the default provisions in all of your other loans, whether they were with different lenders or not, and even if you were current on all the rest of your loans.
And when it looked like you were getting in too deep, financial companies sprung up to offer you exorbitantly priced credit insurance.
Who were the most common victims of these practices? Less educated people, the elderly, and racial minorities. In other words, the poorer members of our society.
Now that banks have pretty much milked all they can out of poor and lower middle class people, who do you think is next?
The infamous criminal Willie Sutton was once asked why he robbed banks. “Because that’s where the money is,” he replied.
Ask that same question of banks today, and the answer is obvious. It’s America’s middle class. Because that’s where the money is.