What is sacrosanct about adults? The history books are full of
boneheaded, greedy, malicious, absurd, murderous etc. things that ADULTS
have done. Other than Lizzie Borden, I can't think of too many children
who have created the calamities that humanity has experienced.
The advantage of collaboration and group think.... (in this case
representative government/ regulation) ... is that history has shown
that usually ... not always ... bringing more minds to bear in the
decision and management process makes for a better outcome for most
people.
The trade-off in this kind "let's try to do better" of arrangement is
that not everyone gets to do just what they want to do. Representative
government came to be after thousands of years of "laissez faire"
whoever is the fastest, strongest, meanest, smartest rules proved that
didn't work. Kings and their friend were rich and everybody else was
poor and nothing changed or was advanced very quickly.
The main reason the Fed bailed out Stearns is because Stearn's business
was tied contractually to so many other companies/ banks etc in our
economy. If the Fed allowed it to collapse it could easily have caused
enough other businesses to fail that the US economy would have tumbled
into a depression, which in turn could have tumbled the world economy
into the same.
Most adults invested in real estate in the last decade or so because it
was the only investment tool they had which could produce decent
returns. They trusted the institutions to let them know if they
qualified for doing so because that is what lending institutions have
the expertise to traditionally do.
When you arrange for a lawyer to conduct your legal affairs, is it
expected that you also understand the details of the law? People
trusted the banking industry to act like professionals but they were misled.
Jeff Wright wrote:
John--I'm not giving the banks a pass on this, but I've grown weary of the
violin strings played for adults who didn't even begin to have the resources
or were in any sort of position to buy a house, but absolutely had to have a
house, well, because everyone else was getting one. If you want to make
excuses for people who got in over their heads with something they didn't
understand or didn't try to understand, but did anyway, be my guest.
The banks bear their own responsibility as well, of course. They don't
deserve a bail-out either. If they truly defrauded borrowers, not just talk
someone into a bad deal, they deserve jail. Otherwise, let them go out of
business if they made too many high-risk loans that went sour on them.
-----Original Message-----
Yes, but the people losing their homes now had plenty of paycheck to
cover
their mortgage payment *at the time they got the mortgage*.
What the banks and investment houses did that was fiscally
irresponsible was
to give out or invest in mortgages that would only work as long as
rates
stayed down and home prices continued to rise. The loans didn't make
any
sense when they were made.
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