Thursday, October 2, 2014

Why the Middle Class Gets Screwed—My Short Sale Taught Me How the Rich Really Think

I was taught growing up to “keep my word” and that your handshake “meant something.” Yet businessmen and individual wealthy people make decisions that are far less moral than a short sale. People “incorporate” so they can avoid legal responsibility for individual actions. It works great. You can stiff creditors, declare bankruptcy, pollute daily and raid pensions to enrich individual executives. If it all goes wrong, like it has so often for Donald Trump, you can keep your mansions and individual fortunes. It is no accident that the best-paid CEO in America has never made a dime for the company. If regular Americans acted like corporations and the moneyed class, our country would collapse in a week from systemic theft, corruption and greed.

I always knew business was getting over on me, but I had no idea the extent until I started looking to short-sell. I first learned all I could about private home financing. I called up some shady investment groups around town and questioned them at length. I didn’t end up using them, but they were frank, informative and unashamed.

“Who would pay 11 percent on a home loan?” I asked.

“Rich people,” said “Bill” from the legal loan-sharking company. “The rich have terrible credit.”

Rich people = bad credit: Just let that sink in.

Bill told me in roundabout ways that rich people never pay a bill if there is any way around it. If something goes wrong in an investment or a business, they always preserve their own assets first.

Most Americans are clueless about business and finance. Instead, we are a caste of customers. We consume short-term predatory lending, school loans that can never be discharged, inflated mortgages, high-interest credit cards, fast food and overpriced automobiles. We “invest” in basic IRAs, doomsday prepping or Ponzi schemes. The worst part is that no matter how much money we gain or lose, the investor class always gets paid.

During the same five- or six-year period my house value tanked, I also lost tens of thousands of dollars in retirement accounts. At the same time, my “money manager” collected a fee day after day, month after month. Since he is the dealer of America’s crack-based stock market, he got paid regardless of performance.

Middle-class Americans just aren’t the same species of human as the wealthy, but we refuse to even discuss the class issue in America. “Class” is for the British, even though the U.K. now has more upward mobility. There have been many great essays and movies about the parallel but unequal capitalist systems in America. There exists a baffling, byzantine maze of corporate and personal benefits enjoyed by the super-rich and investment class both indecipherable and unavailable to regular people.

Lest I be accused of “sour grapes,” because I’m not rich, let me be clear. I live what used to be a middle-class life. We vacation every year without fail, own a home and live in a nice neighborhood. My hands stay clean at work. Of course, it could all crumble tomorrow, but for the moment, I’m a “winner” of some kind. Because I’ve reached some small level of financial stability, I’ve had the time to look around and see how utterly broken the system has become for most people.

Living a middle-class life is an impediment to meaningful change. We are taught that we have everything we should dare to expect and capitalism has “worked” for us. Middle-class people are also urged to hate poor people, and those who cannot or will not work. They are the “other,” the moocher class. Poor people are the reason you haven’t gotten a raise in five years or that your house is worthless or that your company only gives you one week off a year. Those who have something detest those with nothing. We’re letting rich people get away with fleecing America, while turning our rage on poor people.

When you examine it, you cannot blame the rich for the oligarchy we’ve become or for what looks more and more like the return of Dark Age feudalism. Rather, the blame lies with my fellow work-a-day slobs who vote for politicians and policies that favor investment and wealth over the work of regular people. Middle-class Americans are self-flagellating and dispirited over their own lack of wealth, as if it were a character flaw. At the same time, they fall for the deception that everyone can be rich when, of course, most people lack the connections, education and plain old luck to even get close.

I can uncover an individual’s actual potential for wealth with one easy test: If you equate business opportunity with a multilevel marketing scheme, like Amway, you will never be rich. If that doesn’t work, just ask yourself if you think you’ve got a shot at winning the lottery. If the answer is “yes,” you will most assuredly die poorer than you are now.

Read full story:
http://www.alternet.org/economy/why-middle-class-gets-screwed-my-short-sale-taught-me-how-rich-really-think?page=0%2C2

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