Saturday, September 27, 2008

When they bought the ticket they knew (or should have known) what they were getting into. I say let them CRASH!

I am so incensed, I just needed to have a cathartic rant on the topic of this economic crisis... Am I alone in my thinking?

Why do we need a rescue plan? Because collectively, as a society we acted like idiots. The masses ruined it for those that acted responsibly. Now the government is trying to act like a parent stepping in to rescue its citizens in distress. The mortgage crisis came about from people’s arrogance that they DESERVED to have the house, car, boat, new bathroom, second home, etc. regardless of whether it was something they they could realistically afford. What happened to renting an apartment, working hard, and saving to put down 10-20 % on a home, car, home improvement project? I have absolutely NO sympathy for those who took out those crazy mortgages for houses they truthfully couldn’t afford and are now facing foreclosure. It is not your right as an American to own your own home. These people gambled and lost, and are now whining to be rescued.

For those that have lost there jobs and are having trouble paying their mortgage, I feel for them, but the reality folks, is that bad things happen to good people. Part of making good responsible financial decisions involves some planning for situations like lost jobs, deaths, etc. by keeping a cushion of money to land on. Except for those on food stamps, and in our bottom economic strata, ANYONE can choose to live within their means. By doing so you may not be able to keep up with the neighbor next door, but you do get piece of mind knowing that you and yours are taken care of. You would think, that would be more important then keeping up with the Joneses. If the housing market is over inflated and you can’t afford to buy, then don’t, rent.

Then I hear story after story from people that are whining about how they have been taken advantage of by their mortgage company. “Why would they have said we could afford the loan if it wasn’t in my best interest?” While I will admit there are predatory people in the mortgage industry, in the end it is an individual’s responsibility to be actively involved and critically evaluate whether a service/ product is in their best interest. If they aren’t capable of making these decisions, then they should have a friend or family member who is, help them out in that regard. Mortgage lenders offer choices, and just because they say you’re technically approved for certain loans doesn’t mean you should choose them. People who don't understand that the mortgage lenders are looking to make the most money possible off them are hopelessly naive. You don't get something for nothing. I am sure this is a bitter pill to swallow for many but why shouldn't they have to whether the consequences of their own stupidity?

How can we forget the greedy financial institutions that were willing to lend the money out despite the credit risk? When did financial institutions get into the practice of gambling, with no money to back up their bets? On that note, I understand that SOMETHING needs to be done regarding the resulting economic crisis that has come to pass. However, I am very dubious about the Bail Out plan presently proposed. I would rather see the financial institutions who helped bring about this whole mess suffer the natural consequences of their stupidity and greed. Jobs would be lost, credit would freeze up, and many innocent people would suffer and though that would be unfortunate, with far reaching effects, I just can’t see why the mortgage and banking industry should receive a get out of jail card and not suffer the consequences of their bad choices.