We all are.

It is true that Wall Street gamblers have been buying and selling subprime mortgages as commodities, in a kind of pyramid scheme based on the unrealistic belief that home prices would always go up.

It is true that mortgage deregulation began with the Democrat administration, and it is true that Republican tax policies favored speculators in shady, out-of-sight transactions. It is true that bipartisan populism created the fantasy world in which everybody “deserved” to own a home.

Now, as those assets lose their value dramatically (when not totally), so does the stock value of the companies who owned them, and eventually so does the 401k of millions. People ended up stuck with big loans, negative equity, and the entire economy lost trust.

But the truth is, until this point, millions of past sellers enjoyed the ride. Standing on thousands of dollars in “equity” built in thin air, they used their homes as ATMs. For every sub-prime mortgage approved with no oversight by greedy lenders there was also a lucky seller cashing out big bucks.

There was a culture of easy, quick money in real estate, with “Flip My House” TV shows and real-estate seminars teaching how to make money with “smart” investments. Late-night infomercials still promise to tell you how to buy homes with no money down and get rich quick.

As the money flowed and returns were expected to be greater and greated, the entire country invested heavily in those real-estate portfolios directly with stocks, or with 401k and mutual funds.

It’s not the first time an entire nation goes into a easy-money-making frenzy: remember the Caritas Collapse? Or the Albanian pyramid schemes?

The Romanian Ponzi-scheme at one point had, according to Romanian media, around three or four million people involved (in a country of 18 million), and had invested between $1 billion and $5 billion, the equivalent of 20% of the Romanian Government expenditure. Until, of course, its collapse in 1994.

Close by, dozens of huge Albanian pyramid schemes collapsed in 1997, taking with it the “investment” of almost two thirds of the population.

Now portrayed as growing-up pains of former socialist societies coming to the nasty capitalist world, they were massive, nationwide schemes to make easy money based on the Greater Fool Theory: it doesn’t matter if your investment isn’t real, solid or even legal… as long as there is another fool later to take it over, leaving you with some profit.

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