Bailout or Ride it Out?
President Bush and Members of Congress want everyone to panic about this mortgage crisis. They want you so wound up that they can write up and pass a bill in record time, that will be flushing YOUR money into a problem that they CANNOT guarantee it will fix.
Riding high on her own ego and denial (as usual) Nancy Pelosi felt the need to make a stupid political jab before the voting in the House yesterday panning off blame to “failed Bush policies” rather than realizing this has nothing to do with Bush and everything to do with the massive failures of Congress over the past decades.
Policies set by Congress and the federal government put a virtual gun to lenders heads, forcing them into sub-prime mortgages that people KNEW would default. GSE’s like Fannie and Freddy backed up these failed loans and look where we are now. What I want to know is why these mortgage lenders and banks were not throwing a VERY public tantrum about this… if I were forced to make a bad loan to someone I knew was far more likely to default on that loan than pay it off, you can BET I’d be making some noise. What did we hear? Nothing. If you’re in a bad situation and you do nothing to attempt to remedy the problem, I don’t have any sympathy for you at all. Bail yourself out.
I honestly see NO way this is as urgent as Bush and Pelosi and Reed are playing it up to be. Sure the DOW lost 777 points yesterday, but it’s a reactionary market and when looked at from a percentage standpoint the drop yesterday was not even in the top 10 single day drops in the market.
Washington is line to send a message to lenders and Wall Street that failure has no consequence. If you or I had made a decision at our jobs that came even close to having the same results as this has, we would either be on the street looking for a new job or in an orange jump suit behind bars. Instead, we’re here watching some of the SAME people who crafted these failed policies decades ago, stand up and tell us that THEY know how to fix it. Would you continue to trust someone that slapped you in the face every time you went to shake their hand?
Esther
30 Sep, 2008
Coming from the libertarian side of left, I’m a bit conflicted about this bail-out. Thing is, I don’t know enough to decide whether I’m against or for the bill as it stood. Look where deregulation brought us – we could say it’s the fault of the families who took out loans they shouldn’t have qualified for, but there was definite deception involved. People didn’t even know their payments could range so widely. Home ownership became the ultimate sign of achievement in our culture, to show you made it. There was definitely deception involved but that deregulation had to trickle down from somewhere (NYT in 1999). We’ve all learned now that there needs to be accountability. And that’s the minimum of the consequences involved.
BTW, I think the Pelosi speech wasn’t smart – but if we’re trying to place blame on someone for the bill not passing (if that’s in fact what we want) then come on. Can you blame a Democratic speaker for being adverse influence for a Republican bill coming to vote when the Democrats voted “for” by an overwhelming majority? Votes are votes – the left side did their part (by a pretty large majority) and the right didn’t.
James
30 Sep, 2008
Liberal Democrat Congressmen Frank blaming the bills failure on the GOP when 98 Democrats fell into the NAY category?
Stocks opening calmly and UP this morning, the DJI is currently +311.58 despite the failure of this “much needed bailout”…
I’m just highly skeptical that it’s even needed.
I’m not placing all my blame on home buyers… they WERE deceived in their loans but there IS no way I’m giving a pass to them. I don’t go lease a Ferrari just because my initial deal would be a steal… because I KNOW I cannot afford one. If you’re low income, have bad credit and have defaulted on OTHER loans, what the hell are you doing buying into a $300,000 loan with no down payment and interest only payments?
If it SOUNDS too good to be true, it is usually too good to be true.
Problem is, those lenders KNEW better than to issue these sub-prime mortgages but were essentially being blackmailed into them by the higher ups and groups like ACORN by filing lawsuits accusing non-willing lenders of racism and unfair loaning.
So yes, there was more at fault higher up but every single level of this deal is at fault. There is just more at the top that needs to be shaken out.
Here is a great article from CNN on the issue at hand.