weswelker#83

"It is ok to Get rich by working harder and smarter....But don't get rich by getting the government to pass a law that sticks goverments hand in my pocket ,takes money out of it and gives it to you.That 's not right ."
It is very crucial for people to understand....The government is taking from those with less to give to those with more..."



David Cay Johnston of THE NEW YORK TIMES. He's won the Pulitzer Prize and the George Polk Award and many other accolades over his forty years as a journalist.




Video PBS interview:
http://www.pbs.org/moyers/journal/01182008/watch.html






An example of this is the recent mortgage fiasco. Unscrupulous lenders sold high-risk mortgages and made huge short-terms profits (which they kept for themselves). When the bubble inevitably burst, the lenders who had outstanding mortgages lost a lot of money, but they were bailed out by the Fed injection of capital into the market. So in this way, the risk is socialized, in that the public purse gets stuck with the bill for failure, while private enterprise keeps the profits. Its like blackjack, except that when you win, you keep your winning, but when you lose the casino gives you your money back. The logical outcome of this is that you'll keep playing high-risk games because there is no real risk to you. We're guaranteed another bubble because the big financial institutions know that the government will not let them go bankrupt.

What I don't understand is why they call this a feature of capitalism.

Stokes

I would like to see the government demand responsibility on both sides, from irresponsible lenders and irresponsible borrowers. I guess the argument against letting the companies sink would be the destructive impact on the economy. If they bring the whole economy down it will harm people who weren't involved in the crisis. For that reason there is a public interest in bailing them out. Of course there's no public interest in then allowing them huge executive bonuses etc. if they have to be bailed out.

Real World

Let the market collapse. It's called a correction, and it's also called accountability. I don't feel an ounce of pity for some moron who makes $30k, and took out a 10%, $300,000, 3 year ARM, no money down mortgage. Sorry, but your stupidity is not my problem. I don't want to give them a penny of my money, since I pay my own mortgage as it is, and I especially don't want a single red cent going to the arse wipe greedy MF'ing company that agreed to loan $300k at 10% on a nomoney down, 3 year ARM, to a moron making $30k a year. I don't care who "might" get affected that wasn't involved, and who loses money, so long as it isn't my hard earned, stolen at gun point, tax money. Only when people are held accountable will people be responsible. What happens when you let these people and companies go under, is that people take notice, and adjust accordingly. Investors will learn which companies run a tight ship, and companies will learn to keep one is they want an investors money. Lenders will learn to give smarter loans, and borrowers will learn to stay within their means. It truly isn't that complicated. A free market, or the freest possible market, is best. It's self correcting, and self-disciplinary. Is that even english? Self-disciplinary?

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

Stokes

Its close enough to English to make sense to me! I agree with you, I was just presenting the reason why some would argue against letting lending institutions collapse. I'm still renting because I refused to take on just that kind of loan. My wife was saying "but my friends are getting houses with no money down and they make less than you, we should get a house!" but I refused. Now some of her friends are in the *****, and I've got a great "I told you so" or "Yeah, but..." that I'm hanging onto for a time when I really need it.

Harry Boy

Why does everybody blame the "stupid borrower" doesn't the "scumbag greedy lender" paly a role in all this.

Without the "greedy lender" the "stupid borrower" wouldn't be able to borrow.

maybe Hillary's Village will be able to provide mortgages for the "stupid borrowers"
then the "stupid borrowers" won't have "to borrow" from the "greedy lender"

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Harry Boy (Genius)

In The Absence Of Law And Order Society Will Surely Destroy Itself

STFarmy

You're Harry, but the awful lenders are taking hits from their greed too. Look at the Countrywide. I feel bad for the people that they bilked, but if you're buying a house you have to research stuff like that. ARMs are just bad, bad policy.

Real World

OH, I always tend to quote when I respond so I wasn't really directing my words to anyone specifically. I need to click reply more as opposed to quote.

As for what you said, the part I bolded is EXACTLY the logic my own friends used. They acted on emotion, and not sense, and they screwed themselves for it. They'll all make their payments and keep their houses, but they WORK for it, and all left 6+ figures on the table. I hate to say I told you so, but in this case, they all admit they wished they listened. Keep renting Stokes, I'm not sure where you live, but the RE market hasn't bottomed out yet. See, there is obviously a lot of bad to this, but there is also a lot of good. People who couldn't otherwise afford there own place, but were sensible, will now be able to buy a home now. It goes back to what Alexander Hamilton said "money is best kept in the hands of those who know how to use it". It's not that the rich get richer, its that the smarter do. You don't need an education to be smart, nor rich, you simply need sense.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

Real World

I think the lenders are absolute scum sucking POS MF'ers. I'd like to put them all in jail, but it does take two to tango. This is why I am so opposed to any form of government bailout. Let the companies go under, period. When you do that, they will learn to police themsleves.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

STFarmy

Look out, statements like this will rouse the class warfare folks.

Stokes

I didn't think you were talking about me RW, I was just recounting my own experience because for once I was right! Hooray for me!

Yeah, we're going to keep renting for a while yet, though it is frustrating to be essentially throwing that money away every month.