Comments on: THE DEMOCRATS IN A NUTSHELL

By: Rick Moran

Rick Moran — Mon, 14 Jan 2008 14:43:06 +0000

So you’re saying that the real problem is in the falling value of housing and not the loans themselves?

Not much anyone can do about that except, as you say, if banks take it upon themselves to try and work with the delinquents a little longer.

By: Larry your brother

Larry your brother — Mon, 14 Jan 2008 14:39:31 +0000

The problem is not with unscrupulous lenders or stupid borrowers (though those certainly are problems). The problem is also not with honest, well meaning lenders and borrowers who were duped by the counterparty (duped, or overly-willing). The problem is with what Friedman calls “the neighborhood affect,” which is literally the problem here. Neighbors of these forclosures have done nothing to warrant some of the havaoc being played out in their neighborhoods. Read the Atlantic this month, or yesterday’s NYT. Foreclosures are not simple–they take forever, emotions run high, and sometimes people vandalize the property on their way out. Or they simply just walk away, leaving an unattended house that becomes an eyesore. And that hurts people who are not involved in the problem. I don’t know what the solution is, and I realize we don’t want to encourage crazy lending or borrowing, but there must be some solution that banks willingly (mostly) can take that helps those people at the margin, not those way past the margin. And for banks, it’s enlightened self interest: it’s bad enough they made stupid mortgages; they don’t want to become landlords of houses that lose value by the day.

By: Chris

Chris — Sun, 13 Jan 2008 19:36:55 +0000

The problem with expecting the government to ameliorate our pain, is where does it stop? Suppose I’m in pain because I don’t have a newer car. Aren’t I entitled to a better ride, or a more efficient one? Suppose I’m in pain because I spend more money than I take in. Aren’t I entitled to a more expansive lifestyle? Where do you think this sense of entitlement comes from? If people know that the government will bail them out when they make risky, stupid, or short-sighted decisions, then expect them to make more of them.

By: kreiz

kreiz — Sun, 13 Jan 2008 15:51:23 +0000

Kennedy, one of the shrewdest operators ever to prowl Wall Street, was right. He foresaw a time when government would see itself as the final arbiter in the market rather than market forces themselves. Hey, it worked in East Berlin- all you had to do was glance over the Wall and see its beautiful, bright skyline. I’m kidding.

By: charles dorfman

charles dorfman — Sun, 13 Jan 2008 05:10:23 +0000

Free markets and personal responsibility are definitely lofty, conservative ideals to which I adhere. However, none of us live in a vacuum. Those who work hard, save what we can, buy what we can afford are unfotuanately very much affected by the actions of the greedy bankers, rapicious builders, and stupid sub-prime borrowers. Certainly they will suffer. But if the economy tanks as a result of their actions, all of us will suffer. No one said “Life was fair”…they do say capitalism is amoral though. Isn’t this a perfect example of why we have government (and pay dearly for it)? Our great leaders are supposed to find a way in times like these to ameliorate the pain felt by us all. What would be wrong with that?

By: Rob

Rob — Sat, 12 Jan 2008 18:20:39 +0000

Didn’t the sub-prime mess come about because the government demanded that everyone be offer a mortgage, regardless of how nutty is was?

The folks who signed up for untenable loans and those who made them, should feel the pain of the collapse.

Additional government meddling, already shown to be a problem, will not make this mess better. At best is will “spread the pain” screwing people who had nothing to do with it and probably “kick down the road” a great deal of the coast, which will spread the pain to taxpayers not yet born.

By: Drongo

Drongo — Sat, 12 Jan 2008 09:29:19 +0000

“It appears from where Iâ€™m sitting that the American people are completely willing to sell their birthright of liberty for the ease and comfort of government serfdom. The liberals have trained us monkeys very well. Vote for them and out pops a banana treat. No need to take responsibility for your own life. Not when there are so many in government eager to run it for you.”

Out of interest, could you show me which of the Republican candidates (not to mention current president) advocate leaving the subprime mess to work itself out on its own?

Apart from Ron Paul, of course.

I agree with you in the main, and don’t fancy my taxes going to bail out people who made bad decisions that I deliberately avoided. However, when looking for whose fault the whole thing is it is worth remembering that the customers are basically uneducated herd-followers, while the lenders are running according to practices derived from trained and experienced economists. One side knew what it was doing and didn’t care, the other side should have known what it was doing but didn’t.

By: Arthur

Arthur — Sat, 12 Jan 2008 05:48:43 +0000

Don’t forget that before the Dems complained about “predatory lenders” who take advantage of the poor people by loaning them money the Dems complained about the evil RED-LINING bankers who refused to loan money to poor people.

By: Bob Wegrzen

Bob Wegrzen — Sat, 12 Jan 2008 05:39:33 +0000

“And if this ends up hurting the economy â€“ which it will â€“ then perhaps a valuable lesson will have been learned and probity, caution, and responsible lending practices will be rewarded instead of devalued by bailing out those companies who donâ€™t deserve it.”

The S&L crisis of the 80’s should have taught the same lesson. Free market must be a slow learner.

By: BubbaJ

BubbaJ — Sat, 12 Jan 2008 03:08:58 +0000

I agree with you Rick about the Democrats, but don’t forget that our “compassionate conservative” president sounds a lot like Hillary Clinton on this whole mess.