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By PAUL KRUGMAN
Fiscal austerity is the fad of 2010. That fad is fading, but the damage is done.
Ted Rudow III, MA
Menlo Park, CA
October 22nd, 2010
As the Obama administration rejects a foreclosure moratorium and austerity protests grip Europe, Nobel Prize-winning economist Joseph Stiglitz backs calls for a foreclosure moratorium and says opponents of a new government stimulus "don’t understand basic economics."
One of the first bankers to loan money to the government was a German who became known as Rothschild who started lending to the prince in power in the late 1700s and who soon found himself a part of the national finance business. Rothschild then sent his five sons to the major cities of Italy, Austria, France and England to set up similar banks, which soon became powerful in the same manner; all the while cooperating with each other and not divulging their business secrets to outsiders.
Those same mortgage companies, the banks, engaged in predatory lending practices. They weren’t asking what was the best mortgage for these homeowners; they were asking what was the mortgage that generated most fees for me. The way the mortgage system worked, they could take bad mortgages, sell them off to investment banks that would repackage them and sell them on to other people.
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