If you have been hiding under a rock then you may not be aware of the problems facing the financial markets. The foreclosures, the sub-prime collapse or any of the accompanying tragedies. Goldman-Sachs, Countrywide, Merril Lynch, Bear Stearns and Lehman Bros all are indicators of the collapse of the financial markets.

One subprime industry analyst wrote in 1997: “Due to wide economic swings, massive layoffs and regional recession, as well as increases in the divorce rate and the high number of business failures over the past 10 years, the subprime market has mushroomed.” Furthermore, the analyst continues, approximately 45 percent of second-lien subprime mortgages were used for debt consolidation.

As cited above, and surely many more that the interested reader will find on the Internet, provide empirical evidence that most of the criticisms of subprime mortgages made by politicians and the press today, looking for at least partial answers to the current financial catastrophe, have been around since the 1980s and 1990s. Furthermore, the origins of subprime mortgages are linked to a rise in poverty, unemployment and a decrease in the quality of life for working-class families. Something that NO politician wants to admit. These reports reveal how subprime mortgages were designed to exploit the most vulnerable sectors of the population.

To summarize: The subprime mortgage originated as an instrument devised by finance capital to replace bad debt with new loans to people who had lost their jobs or had suffered wage cuts and needed cash to continue feeding their families. In exchange, bankers got a security—i.e., guarantee—on the borrowers’ homes. In other words, banks “traded” risky, unsecured debt for a new loan backed by the guarantee that if a borrower failed to pay the mortgage, the bank had the legal means to repossess the family home. Once again, I will say what no one wants to say, it was about the accumulation of wealth at the expense of the middle class. It is all about—GREED!

Now is there a solution? Yes there is, bu there is no silver bullet that can fix it in a short term program. This will take time and effort to repair the damage that greed has done to the economy. The really bad news is that it is gonna hurt.