Trade Unionist Blames Financial Crisis On Falling Wages

The ongoing financial crisis in the U.S. has occasioned plenty of finger pointing. Some blame reckless mortgage brokers; others greedy financial institutions; and still others lax regulators.

Carl Feuer, a spokesman for UAW Local 2300, sees it slightly differently. According to him, the real cause of the crisis is the falling standard of living of the American worker.

As prices for food, gasoline, and health care rise even as wages stagnate or fall, many households have been unable to make their mortgage payments. Defaults, and foreclosures, were the inevitable result. The losses suffered by banks and other financial institutions are currently making the biggest headlines, but it’s important to remember where the problem started.

Feuer has a point. If average Americans weren’t in a financial bind they wouldn’t be defaulting on their mortgages. Or at least fewer of them would be in default. Still, a lot of the blame must nonetheless be placed on the financial system. Reckless lending practices made unaffordable mortgages too easy to obtain, which resulted in many unwise home purchases, which drove up real estate prices, forcing even prudent people to spend more on housing then they wanted to, thus creating a vicious circle. Now that the circle has come to an end, we’re all paying the price.