Saturday, October 04, 2008

Blaming and fixing

I'm getting really frustrated with all the politicians and pundits who are saying we shouldn't be pointing the finger of blame at anyone about the economic crisis.

If we don't know exactly how and why we got into this mess--and who is responsible--we will throw 700 billion dollars at a problem that has not been fixed!!!


Alcamadus said...

Maybe the problem is is that everyone is to blame? And that corruption in Washington is so thick that pointing the finger just makes you a hypocrite.

Kevin said...

There are 3 reasons we're in this mess:

Politicians, particularly Democrats, used government power to push their social agenda of providing houses to people who could not afford them. Not only reducing regulation and control but actually applying political pressure to businesses to make risky and dangerous loans all-the-while encouraging the purchases through Fannie Mae and Freddie Mac. I'd like everyone to own a home too and a pony, but it's just not reasonable if they can't afford to pay the mortgage and buy feed for the pony. Homes get foreclosed and pony's starve... and then we're left cleaning up the mess. Let's face it, nobody wants to eat a starved pony.

'Wall Street' got "greedy", or in-fact did what they were incented to do... they made loans to people who couldn't afford them, they pushed for absurd loan structures so they didn't get punished by the government and could keep their business profitable. They marketed to ill-informed, naive people, who wanted to own a home. They made the loans that they knew would go bad and made substantial profits off of it.

The people who got the loans - The Americans who took ARMs, interest-only, and other sub-prime high-risk loans are to blame if they can't keep making the payments on their mortgage. They took on way too much risk either because they were ill-informed or just saw an opportunity to make a bunch of money by buying a house they couldn't afford. It sucks when someone loses their home, but if they signed the mortage their responsible. Buying a home is a HUGE decision and should NEVER be taken lightly. The buyer must always beware.

We fundamentally need reform in government. We need oversight of Wall Street, but also need to ensure that these business that take on too much risk can just fail and the investors in them can pay the cost of taking on too much risk... this bailout broke that cycle, that check in the system. We need Americans to take responsibility for their financial situation, for their obligations, for themselves. What this bailout shows is that we're a nation of suckers.