Prior to the derivative meltdown, the Democrats were saying that there is no problem in the mortgage market while the Republicans were saying there was. So much for the double talk I heard from the president of the Labor Management Relations Association meeting earlier this month. Academia has become so politicized that instead of talking about workplace issues, the president's speech revolved around a partisan pro-Democratic interpretation of the financial crisis.
Showing posts with label mortgage crisis. Show all posts
Showing posts with label mortgage crisis. Show all posts
Friday, January 28, 2011
Tuesday, January 29, 2008
The Mortgage Crisis and the Economy
The Texas Rainmaker blog shreds an AFP article meant to make the reader feel sorry for homeowners who have failed to repay their mortgage loans. TR argues:
"Am I heartless? Hardly. Unless I’m supposed to feel bad for companies who failed to conduct proper due diligence on those to whom they’re lending huge sums of money… or borrowers who over-extended themselves, didn’t take time to learn the terms of their loan or simply lied on their applications."
I agree. The exaggeration of the pain from the mortgage crisis might even be greater, because many of the borrowers were probably real estate speculators who had bought houses in order to ride the real estate bubble earlier in the decade. Not all of the borrowers were poor and oppressed. Why should the American public subsidize speculators whose bets turned sour?
As well, Captain Midnight of the Captain's Comments blog argues that government should leave the problem alone:
"if the government butts out of the economy and allows people to engage in commerce without restrictive and repressive rules and regulations, the economy can soar. When the government plays the role of buttinski, their actions can cause the economy to sour.
"There's no shortage of ideas in an election year. But it remains to be seen just how much the government can do to halt the continued slide in an economy battered by falling housing prices, rising energy costs and a lending slowdown caused by worries about how many more loans will go bad...
"Politicians get to look good twice: first when they cause a problem, and later when they try to "fix" the same problem they created."
Actually, they get to look good a third time: when they fix the problems that the fix created. And a fourth, when they fix the problems that the fix that fixed the fix goes bad, etc. There's no end to how much money Washington and the state capitols can waste.
"Am I heartless? Hardly. Unless I’m supposed to feel bad for companies who failed to conduct proper due diligence on those to whom they’re lending huge sums of money… or borrowers who over-extended themselves, didn’t take time to learn the terms of their loan or simply lied on their applications."
I agree. The exaggeration of the pain from the mortgage crisis might even be greater, because many of the borrowers were probably real estate speculators who had bought houses in order to ride the real estate bubble earlier in the decade. Not all of the borrowers were poor and oppressed. Why should the American public subsidize speculators whose bets turned sour?
As well, Captain Midnight of the Captain's Comments blog argues that government should leave the problem alone:
"if the government butts out of the economy and allows people to engage in commerce without restrictive and repressive rules and regulations, the economy can soar. When the government plays the role of buttinski, their actions can cause the economy to sour.
"There's no shortage of ideas in an election year. But it remains to be seen just how much the government can do to halt the continued slide in an economy battered by falling housing prices, rising energy costs and a lending slowdown caused by worries about how many more loans will go bad...
"Politicians get to look good twice: first when they cause a problem, and later when they try to "fix" the same problem they created."
Actually, they get to look good a third time: when they fix the problems that the fix created. And a fourth, when they fix the problems that the fix that fixed the fix goes bad, etc. There's no end to how much money Washington and the state capitols can waste.
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