I'll admit that I haven't understood the housing crisis as well as I could have. Maybe that's because the media and politicians kept talking about how crazily complex the "financial instruments" (or whatever you call them) were that caused the housing meltdown which continues to reverberate across the world economy. Not only are we the victims of the meltdown, but we were often told that we had no business trying to understand why it happened. Talk about a sense of helplessness.
But after watching American Casino -- Leslie Cockburn's excellent, comprehensive documentary about what caused the housing crisis and its effects on communities and the rest of the economy -- I was left feeling pretty pissed. That's because American Casino proves that understanding what caused the housing crisis and its effects on individuals, communities, and the economy isn't nearly as difficult as we've been led to believe. And to prevent this from happening again, it's vital that we understand how it happened and repudiate the failed ideology at its root.
Watch my ReThink Review of American Casino below.
To see me on Cenk Uygur's XM/Air America show, The Young Turks discussing American Casino, predatory lending, overtly racist lending practices, and what the government is/isn't doing to prevent another housing debacle, watch my discussion with Cenk below:
One thing that struck me while watching American Casino was the official-sounding terms for the tactics used to create this mess. When you hear terms that sound very technical like "credit default swap" and "reverse redlining", it's easy for part of your brain to shut off, especially if you already feel that you don't/can't/won't understand housing or finance. I was guilty of this myself.
But these terms belie the simplicity of what really happened. I'm clearly no expert on this subject, but thanks to American Casino, this is how I've attempted to boil it down:
Reverse redlining = racist lending, targeting minorities for shitty, high-risk loans. Tony Paschal, a former Wells Fargo loan officer turned whistleblower, stated in an affidavit, "[Wells Fargo] referred to subprime loans made in minority communities as ghetto loans and minority customers as 'those people have bad credit', 'those people don't pay their bills' and 'mud people.'" If "reverse redlining" was called "mudpeople mugging", that would clear up a lot of the confusion. (To find out about Baltimore's lawsuit against Wells Fargo over reverse redlining, go here.)
Subprime loan = timebomb loan, where lenders gave themselves bonuses for putting bombs in people's houses, especially if they had brown skin. They knew these bombs would go off and wreak havoc on the lives of homeowners and their communities. They just didn't care. Credit default swap = misery bet, where you bet that someone will lose their home. That means lenders put bombs in people's houses, then investment banks told investors they could bet that the houses would blow up, even though the banks didn't have the money to pay off those bets. If you can't pay off a bet in the real world, you get your thumbs broken -- on Wall Street, it somehow qualifies you to receive billions in bailout money.
Hopefully Michael Moore's Capitalism: A Love Story won't eat American Casino's lunch, since it's an important film that everyone should see (to find out where American Casino is playing near you, go here). While the housing crisis gets its due attention in Capitalism, American Casino shows that it's a subject that more than deserves its own film.
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