This is racist. Oh, wait...
Sowell’s bit on greed is good.
An analysis of any economic crisis will probably show that greed played a part, but economic success and prosperity also occur because greed is part of the equation.
Our government regulates business to a degree to ensure that greed and power don’t result in an unholy union that suppresses the free market. At least that is why our government was empowered in the first place to regulate some aspects of business and the market. In the late 1990s, in 1999, our government decided to abuse that power by instituting policies that not only forced banks to make bad loans to people who probably wouldn’t be able to afford it over the coarse of the loan, but they encouraged and enabled their bad policy by putting the weight and credit of the U.S. Government behind those policies.
As I usually do at this point in my rant, I point out that George W. Bush, an MBA, approached Congress about changing those policies to restore sanity and balance to the credit market. Congress, naturally, said ‘no’. They didn’t want to be painted as the Congress that took away easy mortgages from the minorities, because that would be racist. In fact, George W. Bush was called a racist for proposing what he did. Surprised? Not I.
In this case, the heart of current crisis was created and caused by greed. The type of greed that is at the heart of our government, the greed for power and prestige. Congress members refused to potentially sacrifice their position and access to power to stave off a growing crisis, or even to address the issue fairly and on its merits. They rapidly dismissed the predictions from GWB’s White House and turned the proposal into political fodder by using their opposition to the measures proposed by GWB to prove their friendliness to those very minorities worst affected by the disruption in the market.
Greed most definitely had something to do with it, but if you track it back to the original source, you’ll find the very people responsible for the mess still at the helm, and ironically - they still haven’t found the courage to fix those darned regulations that created the problem in the first place. I guess they’re still afraid someone might use an attempt to fix them as political fodder to label them as racist. Go figure.
Smilin Joe, the gift that keeps on giving.
Hmm. can’t change the name of “Random Thoughts” or I’d never find it :)
Hmm. can’t change the name of “Random Thoughts” or I’d never find it :)
Was it really greed? Did bankers and investors actually believe the poor could make the hefty payments on their mortagage? Did they not view income to debt ratio as a qualifying prospectus? Or did they know in advance, the fed govt, with the taxpayer dollar, would bail them out when the time came?
I have my money on they knew they would be bailed out. Which is exactly what occured.
As a result, banker’s and investor’s decisons were based on assumptions the govt, with taxpayer dollars, would always bail them out when deliquency ratios exceded an unacceptable level. They did, and as always assumed, they were bailed out by the taxpayer without their consent.
