Daily Mutterings
Let me state for the record I'm not a huge fan of mortgage bailouts. I could be made to understand why the government feels the need it has to "do something" about this pressing concern--because the chattel (voters) are clamoring for relief from "predatory lenders" who took advantage of them. "It's not our fault," they cry, "We wouldn't be in this position if it weren't for the big, bad wolf with huge eyes, and big teeth, and 0% down mortgages. Besides, it's for the good of the economy."
What a fairy tale.
Defaulting borrowers and lenders alike are equally at fault for low lending rates, bizarre mortgage products, and fast 'n easy money. It's not solely on the shoulders of the lenders. They made the money easy, but somebody reached into the cookie jar and took far more than they could eat--"Their eyes were bigger than their stomachs."
Borrowers and lenders made their bed, they should be made to lie in it. Many families could have emulated the neighbors (now in danger foreclosing) and taken out variable rate loans with 0% down to buy their houses; many could even have used such techniques to buy "more". They did not. Fiscal prudence forced them to accept the reality they could not (should not?) afford "more" where their neighbors pretended the economy would supply their desires. Historical insight reminded them of the adjusted maxim, "Whatever goes down, must come up." Too bad the neighbors didn't look to the past.
What part of cyclic economies did the neighbors not understand?
Economies run in cycles and grow in spurts. The incredible growth in recent years must inevitably result in a time where the gears of the nation must rest and catch its breath. 'Tis natural. It's like pruning a tree, the deadwood--the inefficient companies, the bad fiscal decisions, the poor lending practices--must be cut away and burnt. Hence, I see no reason why the government should bail out greedy corporations or greedy borrowers. The problem with a bailout is that the welfare of the greedy lot will be forced upon those of you who were fiscally conservative, or smart enough to know when to refinance.
What a fairy tale.
Defaulting borrowers and lenders alike are equally at fault for low lending rates, bizarre mortgage products, and fast 'n easy money. It's not solely on the shoulders of the lenders. They made the money easy, but somebody reached into the cookie jar and took far more than they could eat--"Their eyes were bigger than their stomachs."
Borrowers and lenders made their bed, they should be made to lie in it. Many families could have emulated the neighbors (now in danger foreclosing) and taken out variable rate loans with 0% down to buy their houses; many could even have used such techniques to buy "more". They did not. Fiscal prudence forced them to accept the reality they could not (should not?) afford "more" where their neighbors pretended the economy would supply their desires. Historical insight reminded them of the adjusted maxim, "Whatever goes down, must come up." Too bad the neighbors didn't look to the past.
What part of cyclic economies did the neighbors not understand?
Economies run in cycles and grow in spurts. The incredible growth in recent years must inevitably result in a time where the gears of the nation must rest and catch its breath. 'Tis natural. It's like pruning a tree, the deadwood--the inefficient companies, the bad fiscal decisions, the poor lending practices--must be cut away and burnt. Hence, I see no reason why the government should bail out greedy corporations or greedy borrowers. The problem with a bailout is that the welfare of the greedy lot will be forced upon those of you who were fiscally conservative, or smart enough to know when to refinance.
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