I think it raises some very interesting points on how the boom in the economy these last few years has not reached a great many people. From the story:
we’ve had brisk growth for the past few years, as the president has tirelessly reminded us, only without those promised increases in personal income, at least not for the poor and the middle class. According to a study just released by the Economic Policy Institute, real wages actually fell last year. Growth, some of the economists are conceding in perplexity, has been “decoupled” from widely shared prosperity.
Growth is not the only economic indicator that has let us down. In the past five years, America’s briskly rising productivity has been the envy of much of the world. But again, there’s been no corresponding increase in most people’s wages. It’s not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.
The current economic problem, downturn, recession or whatever you like to call it started in the subprime market. If the Federal Reserve or the government had been a little more concerned or aware of the practices of some of these loans, action might have been taken to prevent this problem. It seems action was only taken when the large bank and investment firms were suddenly brought into the picture that the powers that be took notice.
The interest freeze on the subprime market is a help. But what happens after five years if people are still unable to pay their mortgages? Will be right back where we started or will the government do something to really and truly help this people get out of this mess?