theadanews.com - Ada, Oklahoma

October 12, 2011

Letter to the Editor


The Ada News

Ada —  

Editor, The Ada News:

I take exception to your article Occupy Wall Street Crowd Misguided. These marches across the U.S. are showing frustration of masses against overall condition of our economy, dysfunctional political system and big banks. The unemployment rate in the U.S. remains high at 9 percent. The economy is not showing any signs of recovery. Rather the fear is now of another recession. The debt is at an all-time high and alarmingly approaching the gross domestic product (GDP) level. The debt rating has been lowered to AA+. The Federal Reserve is simply printing money to buy back U.S. debt and thus destroying wealth and creating risk of inflation (or stagflation, a condition where we have recession and inflation together) and risk devaluation of the dollar. The world has started questioning the validity of U.S. dollar as a global currency.

Further, it is a fact real wages have been stagnant for the last three decades. The poverty level in the U.S. is at its highest level. The middle class is feeling the pressure of recession, lost jobs and depleting wealth. Big banks, which went much beyond self-interest in approving bad loans to those who could not have afforded those loans, were bailed out with taxpayer money. Deregulation of the banking industry helped banks made huge profits and — as a result — big bonuses and salaries were paid regularly to big bank executives. Yes, free enterprises work in self-interest to make a profit and there is nothing wrong in doing so. However, when free enterprises work out of greed and take advantage of loop holes in laws and work unethically, it creates unjust wealth for some and then others have to pay the price. Even, the famous economist John Maynard Keynes advocated thoughtful regulations for the free enterprise system to work. 

The article mentioned the Clinton Administration pressured Fannie Mae to expand mortgage loans among low and moderate income people so these people could own homes. This is one part of the story. The Bush Administration was well aware of this practice and supported it wholeheartedly by siding with key Democrats, including (Conn. Sen. Chris ) Dodd and (Mass. Rep. Barney) Frank. President Bush called this an “ownership society” for making sure typically unqualified (buyers) could own homes.

Another important thing to note is our political system, as well as the Federal Reserve, puts Wall Street as its main focus in making policies or taking economic decisions. The goal is to please Wall Street and somehow boost the stock market. This results in wrong economic decisions. Here is an example: Alan Greenspan kept interest rates very low (1-2 percent) in the early 2000s to give a boost to the stock market after September 11, 2001, crash of the market. As a result — low interest rates plus aggressive lending practices — created a mortgage bubble (created false wealth due to rising home prices). Wall Street benefited greatly until the 2008 crash. Greenspan was viewed as a hero by Wall Street. The ultimate (victims) of this crash were middle-class or poor people. They lost their jobs and lost their wealth exponentially. Big banks and other enterprises were bailed out by the federal government by using tax money. The poverty level is now at its highest level in the U.S. history.

Today’s youth are awakening to this reality. When the political system has become dysfunctional and political parties put their own interests before the interest of people and don’t feel the pain of the public, it is very democratic to have peaceful demonstrations around and send your message to those who are in power. Their marches should send a strong message to politicians in Washington D.C. to fix the system, turn around the economy, create jobs, cut debt, work in a bipartisan way and keep this great nation strong and a leader of the world. Another message (protesters deliver is) to hold big enterprises accountable for their wrongdoing. These peaceful marches are very democratic and must be welcomed at this critical time.

 

Ajay Kumar

Ada