|
It may be politically incorrect to point out that many of the lenders were greedy, and many of the buyers were being stupid, but doesn't mean that such a conclusion is wrong. Nobody forced the buyers, at gunpoint or otherwise, to take out a loan that required no down payment and was an adjustable rate on interest. It was up to the buyer to protect their own financial interest, and if that meant deferring a housing purchase for a few years until they got a better deal, so be it, but that's what a responsible person does. Instead we had many, many people go ahead and jump right in, trusting to fate that everything would somehow turn out alright even though the odds were against it.
And then to further compound the problem, they used their homes like a goddamn ATM. While many people were forced to do this for pressing financial matters like health care and such, many others used home equities to buy toys and vacations. For instance my neighbor a few years ago bought four acres and a double wide trailer out in the country, a reasonable enough purchase. However he then proceeded to pick up two home equity loans and rack up his credit cards all for things like ATVs, a big boat, a large gas guzzling car, vacations, etc. Within the span of four years he was cleaned out, property foreclosed on by the bank last year. This scenario has been repeated many, many times over. Go to your nearest vacation spot for boaters and ask those people how they got those boats. Odds are, if they are middle class, they emptied their house out to do it. Stupid, stupid, stupid.
People in this country have had a mindset for years now that they could live the good life, live beyond their means, that in fact, they deserved to do so. This attitude is what drove the consumption and so called good times of the ninties. Rather than being smart, careful and frugal, they simply continued to borrow and the institutions continued to lend, and this whole house of cards got built up. Now that it has collapsed, those of us who were careful, who lived within our means are now expected to bail out those who were stupid, greedy and foolish. Gee, thanks, NOT.
Again, I'm not talking about people who were struck by sudden calamities, like a serious health problem, a lost job, etc. Those people need help, and I'm unstintingly willing to help them. But the vast majority of people who are hurting now got into their position through their own foolishness and greed, and they shouldn't be bailed out. If we do bail them out, we're rewarding stupidity, these people and people like them in the future won't learn their lesson, and we'll repeat this all over again in twenty-thirty years.
Yes, there was little oversight, and corporations were being greedy. We shouldn't reward them either, nor bail them out. But in this little scenario it takes two to tango, and the person who is getting the loan has the final say. As the saying goes, if something looks too good to be true, it probably is. But these people didn't do that, they let their own greed for that big house, or flipping a house overcome their better sense and plunged right in. And now they're going to be rewarded with three percent fixed rates, while those of us who did the right thing, or frankly anybody for that matter, can't get a mortgage for under six percent. Gee, how fucked up is that?
|