Wednesday, September 17, 2008

How Safe is the Middle Class?

A couple of nights ago I was watching the news and heard that banking giant, Lehman Brothers would be filing for bankruptcy.  The other big news of the evening was that Merrill Lynch was probably going to be bought by Bank of America and that AIG (the insurance giant) was also in danger of going out of business.  

I receive an online publication called "The Mortgage Graveyard" and for the past year and a half more and more banks have been added to that list. I couldn't believe it when I was directly e-mailed, by my account executive at Indy Mac, last month, that they too were going out of business.  Right now there are very few banks left to do business with.  The real scary part of all of this is that if you happened to have over $100,000 in Indy Mac Bank, you were in danger of losing your money. 

Trying to get a mortgage in this lending environment is like pulling teeth. It's hard, uncomfortable and will cause you a whole bunch of pain and that's if you are lucky enough to find a decent dentist.  

Now,  you may ask why is it just the middle class that aren't safe?  My attorney and friend, Paul Barlow, neatly summed it up when he said  "the poor don't have any money to begin with and the rich always have money.  It's the middle class like you and me that always get squeezed".
He's right, the rich never have a problem buying homes and the poor are happy just to have a roof over their heads. It's the striving middle class that dream of home ownership and take the steps necessary to achieve those goals that are in danger of being squeezed out. It's also the middle class who will be losing their well paying jobs at "Lehman Brothers, Indy Mac, AIG, Merrill Lynch, etc".  Those nice middle class salaries will be very hard to replace in a failing economy, such as the one we have now, which was created by our wonderful Republican President George W Bush who has systematically catered to his very rich corporate cronies like Ken Lay who pilfered the pensions of the loyal, hardworking middle class employees of  Enron. I pray that we can get our country back on track and back on it's feet so that we can once more have a strong economy and a healthy environment.  Four more years of the same and we will be in for a depression instead of a hard core recession.

When the middle class feels safe and consumer sentiment is positive we all share in a strong economy.  We are anything but safe right now. These are, indeed, very scary times.

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