Op-Ed: Romance, young love, aspirations, and no money – Any questions?

America is off track. Immigration and homelessness crisis in large metropolises like Los Angeles is the best example. — Image: © AFP

As absolute existential catastrophes go, the inexcusable global cost of living atrocity couldn’t have timed it better for younger people. The gig economy, that famous charity, will combine with artificial intelligence and a total lack of human intelligence to create a huge abyss for the 30s and under.

The days of suburban sitcom certainty were already pretty much gone. You grew up, had fun, friends, and a family in more or less that order. The big issues were whether you had a new suit, car, or anything else on the shopping list, like maybe a house.

Well, you’ve fixed that problem, haven’t you? These guys can now no longer afford fun, friends, and a family. The whole idea of a job is in the blender. Your murderously expensive college degree in any profession now has a shelf life dependent on a whole new class of technology and the whims of the job market.

The other problem is that if you have no money, your only option is credit. The credit market, as everyone knows, is run by geniuses with the IQ of generationally constipated fruit flies. They gouge, too.

Most of the huge numbers for housing, corporations, and everything else that makes everything unaffordable are actually based on this market. In effect, the 2008 crash is still going on, it’s just diversified to all other forms of credit.

In this environment, there are no winners. Increasing prices devalue wealth. They also drastically reduce purchasing power throughout the economy. Responsible lending is extinct. Deregulation, the idiocy of idiocies, has yet again made basic things dysfunctional in the name of pandering to a few useless rich brats.

So where are the 30s and under supposed to go? A nice stroll looking at a tiny Dorito to call home?

They might as well be.

This has happened before. After the Great Depression, the US economy was so battered and bruised that the idea of affordable homes was glued into the economy to make it work and build capital. It was part of the New Deal, which conservatives have been squeaking about ever since.

There’s a book called Homewreckers by Aaron Glantz which I’m currently re-reading. I’m still as horrified as I was the first time I read it. The book spells out in hideous detail how Main Street got assassinated. The murder is still going on, now in its second generation.

The good news is that most of the people involved are still around. They’re fine. One of them is currently taking up far too much space in US courts.

This entire mess is based on the ever-alluring credit markets. Mortgage securities, aka the sub-primes, were the first version. There was nothing to stop them. Exactly the same way there was nothing to stop anyone lending to people whether they could afford to borrow or not.

These ridiculous loans became worthless mortgage “securities” in the form of the subprimes. They then short-sold those securities. Another book, The Big Short by Michael Lewis, tells how the vendors of these obscene securities effectively short-sold the entire American domestic economy and the American middle class.

(I happened to read these books one after the other, and I’m still nauseated, years later.)

The same people who created the biggest financial and credit mess in US history then picked up huge amounts of residential property at bargain prices and began gouging. Hence the rental disasters. This was always pure fraud.

Miraculously, the idea of charging top dollar for everything else became popular. This is now how people are trained to “do business”. They don’t do any real business of course. They just glue themselves on to the cashflow coming from the poor bastards trying to borrow and stay solvent.

At the same time, two or three generations went out with the bathwater liquidity. Costs are now so high that any sort of life or future is at best theoretical for the 30s and under age groups.

Consider, O presumably subterranean, reluctant, and ever so slightly jaded spectator, the wonders of the future.

Alice and Billy are in love. They somehow found time between their seventeen part-time jobs to meet. They shared a romantic evening in a chic reconditioned dumpster they shared with 20 other like-minded people and a few like-minded rodents.

Most exciting of all – They went out and looked at a building! They went home fantasizing about what it must be like inside one of those things. They went to their parents for advice. Alice’s parents live in a luxurious tree house and Bill’s living in a far too fashionable storm drain.

They asked if they could borrow some money. Their parents were very sympathetic. They promised to make time for a meeting and cleared their schedules from their own eighteen part-time jobs to discuss it.

Three years later they all met under the remains of a KFC bucket to plan for a down payment on a real honest-to-goodness piece of cardboard.

That fun popular song, “If you ever had anything you ain’t got it now” played across the street in the cemetery.

Things worked out well. Alice and Bill will be able to afford 0.00001 children and a skateboard sometime in the 45^th century.  

(I wanted a happy ending for them, somehow.)

The world is currently made of bad loans made by idiots to morons. That’s the real problem.

Even the theory of credibility for these absurd amounts of borrowing has basically given up the ghost.

The bank of Mom and Pop is at best creaking under price rises. Big crashes in property, stocks, and other critical economic fundamentals are inevitable. When the markets go up, they invariably crash, and everyone suffers.

The credit market is the primary cause. There are ways of fixing this mess, but it requires vertebrae and a certain lack of patience with parasites.

Quarantine and/or write off the most egregious of the big corporate loans. That means the loans are effectively void or neutralized. It’s unrealistic in this environment to keep those loans on the books anyway. They have zero credibility as assets.  

Credit providers should be fully liable for any defective, misleading, onerous, or fraudulent loan. That means the borrower pays nothing and all costs devolve on the lender.

Credit rating agencies should be held accountable and financially liable for any rating that is based on hearsay from a hostile lender or false information.

“Balloon” or cumulative debt mortgages should be illegal.

Make debt securities and debt speculation illegal. Wipe out that entire market. Debt transfers should be between licensed credit providers.

Enforcement should target specific lending practices.

Credit licenses should be revoked for repeat offenses against borrowers.

Price gouging in rentals and financing should be made a criminal offense.

The old system of dull-as-dishwater loans and rentals actually worked quite well.  People who own their own homes are far more economically productive. Prosperity has to be based on something, after all.

Meanwhile, get rid of the geniuses who created this global cluster.

You’ll feel much better.