A Revoltin' DevelopmentShareThis
by Ron Daly
We've already established that there's a "debtor's revolt" going on in this country. Our rioters are not people who knowingly drove themselves into hundreds of thousands of dollars in debt, mind you. They're good people who make their payments, don't default and try to get ahead honestly. People that, as we discussed last time with our Suze Orman video and my Chase-chess game, are sick of big banks and lenders trying to rig the game.
The revolt came to Chicago yesterday as protesters organized by the Service Employees International Union and National Peoples Action marched on the ABA Convention (click here to read the CU Journal story). Even as representatives of the ABA tried to pardon their members, citing that the crisis was not specifically caused by banks but by lending powerhouses like Fannie Mae and Freddie Mac, the crowd gathered outside to register its displeasure. According to the article, the protesters also visited offices of Goldman Sachs and Wells Fargo - two institutions that are not ABA members but did receive bailouts.
Maybe they should have swung by Detroit, too. The Feds are looking to shovel another $2.8 to $5.6 billion into GMAC in exchange for preferred stock. That would make three bailouts for the auto company that's staking its future on the 230 mile-per-gallon Volt hybrid, not due on the market until 2011. How many more bailouts are we going to throw at GM until they're able to do right on their own? Do we have to pour in $10 billion per year until they have a competitive product that the market is interested in buying?
Maybe we're being to narrow in our definition of "debtor" when we're talking debtor's revolt. We're going to be paying off all these bailouts for decades, maybe the next century. Unless, of course, in the next few years we get taxed to death by a government that suddenly realized it was out of money. Either way, we're going to be busted. Each and every one of us is thousands in debt, if not personally then because someone keeps writing checks on our behalf to companies and banks that keep failing over and over again.