The American Pipe Dream
The American Pipe Dream
Shamako Noble
I highly recommend the movie Maxed Out. It’s a documentary produced a few years back about credit card companies, banks, mortgage loaners and their shark like practices. It details some pretty horrific stories that include the suicides deaths of two students, the lost house of a mother, and some very critical questions about the quality of the financial market in the face of certain doom. Indeed, this movie put out in 2005 in essence predicts (with the help of some academic insight) that there must come a reckoning for purchasing and re-purchasing bad debt. With the exception of the person who ran into the movie, I’d never heard of the movie before. One thing that was mentioned in the movie, is how similar credit and housing market is to crack, which was funny because I was writing this article at when I saw movie.
Now you might ask yourself, “Why in the hell would you compare something like the financial market, to the crack market.†Here’s my reasoning. There are commonalities between the crack market and the housing market that should cast clear and permanent doubt over the concept of deregulation for all of eternity.
The Black Market:
The black market exists because the market exists and the market functions on supply and demand. Furthermore, the probability of wanted to be intoxicated coupled with the capitalist incentives for supplying it create a complimentary tension consistently building on each other. Thus, drugs are inevitable. And valuable considering that the illegal drug market is worth an estimated 321.6 billion dollars.
The Market thrives on efficiency. Make more, sell more, spend less. And while some industries must grapple with the reality of diminishing returns (the point where production is actually costing more than you could ever make back), some industries like technology, the financial market and crack don’t experience this law the same way.
Crack hit the scene of America like the Seattle Mariners Ichiro, and in less than five years had completely changed the landscape of American communities in general, and Black communities in particular. Without any historical knowledge of what would happen to the community (or the economics of the situation) it couldn’t’ be known what the impact of crack would be. And the market waits for no man.
What the financial sector really was:
The Housing and financial market, increasing based on speculative capital that, for all intents and purposes is made up and doesn’t actually had any value, was essentially crack. A drug that it’s dealers couldn’t help but sell to communities that, for whatever reason, thought it was the best thing to do at the time. The idea that an entire financial industry worth billions was based off of loans likely to default over a period of time. The value of the loans, were bought and sold over and over until the value of the loans couldn’t even be determined. Credit was crack. And just like with crack, America never wants to admit it has a problem until it’s too late.
Creditors, banks and loan companies use deceit, thug like tactics and ultimately leverage their ability to control debt to harass trick and swindle families into 20 and 30 years debts while losing their homes to foreclosures. We’ve already reached record numbers and we’re only in a first round. The irony here is that crack has a market regulation called the law. There was no regulation for the financial industry, the market was said to be able to correct yourself. But as a result of this, people will lose their homes and their jobs. People are going to lose their retirements funds and the end the primary factor in retrospect was not sound reasoning but greed.
Conclusion
Why are drugs illegal? Because of the effects they have on communities; because of the uncontrollable nature of the drug market and because of who the money does and doesn’t go to at the end of the day. Well then I ask, should not the banks and financiers that drove this madness, and even the day to day workers with whom I sympathize deeply and who may soon find themselves suited to crack like pursuits, also be prosecuted for their crimes. Legalistically, because of the many I know and the millions more I don’t who have had years taken away from their lives because of a bad decision motivated by the desire to feed their families I want to say yes. The humanity in me knows much better. The market is forever altered, but the question remains: what have we really learned?
Weekly Updates | berkhhc November 24, 2008 | 
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