Warning, Bad Storm Coming!
The American economy is in a financialization similar to a condition that ruined countries such as 16th century Spain, 18th century Netherlands, and 20th century Great Britain. The manifestations include shifting taxes from capital to the middle class, treating wage earners as disposable cost commodities, and finance capitalism that is dominant, not supportive.
For example, since 2000, premium, floating-rate housing loans have grown seven fold to $450 billion for those whose who do not qualify for a conventional loan. If the Fed raises their rate to 5%, most borrowers will not be able to pay the $250 a month average addition to their mortgage payments. The banks say, “Why worry?” because they have used credit derivatives to duck the risk, a market that tripled to $8.5 trillion in 2004. Hedge funds are betting on increased foreclosures; your pension funds are betting that things will not be that bad.
Wage earners must demand that their elected representatives regulate hedge funds and derivatives before runaway speculation destroys more pensions.