Hat’s off to Federal Reserve Chairman Ben Bernanke, and the other members of the board.  They successfully avoided the housing bubble bust that was inevitably going to happen in the last couple of weeks.

The Federal Reserve cut interest rates 1.25% over the last couple of weeks.  This not only helped to preserve the large housing bubble, but it also led to the highest weekly stock gains in five years.  The S&P 500 was up 4.9%, the Dow was up 4.4%, and the NASDAQ was up 3.8% for the week.  That’s great news for the minority of Americans that have money to invest in any significant quantity of stocks.

The Fed has saved the day, and now some economists are predicting a recession may now be avoided.  That’s great news!  But don’t these economists get paid to wear rose colored glasses and pump a failed economy which ultimately gets dumped on hard working Americans backs?  You bet they do!

At the same time the Federal reserve was cutting interest rates, the working class was getting in some data of its own.  First, there’s the first reduction of jobs since 2003.  Second, there was the largest yearly decline of home sales ever recorded.  And let’s not forget that the economy nearly stalled in the fourth quarter - which by the way is the most profitable part of the year for retailers.

While the Fed’s action may have averted a stock market meltdown for the rich, hard working Americans invested mainly in Cd’s and Money Market accounts watched their interest rates plummet.  Even longer term Cd’s have yields of just 3.5% or less.  That’s a big difference from a couple weeks ago.  For senior citizens, this is a hard pill to swallow.  As we know, most senior citizens and those living week to week on little pay mainly invest in sure bets.  The interest earned from Cd’s or money market accounts is typically used to make ends meet, and the Fed’s recent action hurts those that can least afford it.

Instead of trying to patch the housing bubble and preventing it from bursting, maybe the Federal Government needs to aggressively go after those that created the bubble in the first place.  The Government should simply identify and prosecute anyone or any business that engaged in unlawful activities.  And if a company has violated laws that created this financial mess, their business should be liquidated and the remaining funds used to compensate the victims of such devastating crimes.

For the average hard working American, our home is our greatest investment.  Our homes are now losing value at an alarming rate because of a small number of greedy people and a Government that turned a blind eye to the home lending corruption.  To send a clear signal to businesses that profited from this, the corporate leaders must not only sit behind bars for a long time, but their assets and businesses forcibly taken from them.

Make no mistake, the housing bubble must burst.  It stands to reason that those that profited from creating the housing bubble most certainly can pay to limit the losses realized by the many homeowners that were tossed into the streets in the name of greed and profit.

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