Imagine, for a moment, that you’re deeply in debt (I know that’s a big stretch for most of you).\u00c2\u00a0 You’ trying to deal with a bill for $1,000 and you’ve got no money to pay it.<\/p>\n
Your son has just thrown a quarter in a fountain.\u00c2\u00a0 A quarter!\u00c2\u00a0 Like you can afford that<\/em>.<\/p>\n You berate him, condemn him, and do everything you can to make him feel sub-human.\u00c2\u00a0 For\u00c2\u00a0 days.\u00c2\u00a0 Your wife cheers you on, reminding you of your financial trouble and how horribly irresponsible the kid has been.\u00c2\u00a0 She comes up with a new rule \u00e2\u20ac\u201c he’ll have to give back 90% of his allowance.\u00c2\u00a0 You agree this is a just and fair punishment.\u00c2\u00a0 She calls a press conference to condemn the child, and riles up the neighbors.\u00c2\u00a0 She goes on a late night talk show and incites more bile against this horribly irresponsible kid.\u00c2\u00a0 You join in, of course. You’re so caught up screaming at the kid you completely forget one little thing: Your wife generated the original bill. <\/em><\/p>\n This economic meltdown was created <\/em>by the government.\u00c2\u00a0 It started with Jimmy Carter’s Community Reinvestment Act, which required that banks hand out loans to low income people buying crappy property.\u00c2\u00a0 Banks responded and adjusted, and some even managed to turn it into a modest profit center.<\/p>\n Clinton put the program on steroids.\u00c2\u00a0 He demanded the act be expanded, and made it much easier for groups like ACORN to harass banks that didn’t comply.\u00c2\u00a0 He commanded Fannie and Freddie to increase the number of sub-prime loans that they handed out or insured.\u00c2\u00a0 Bush added more fuel to the fire by upping Fannie\/Freddie’s requirements.<\/p>\n In order to comply banks, mortgage companies and lending institutions started handing out loans to anyone who could fog a mirror.\u00c2\u00a0 The prices of homes skyrocketed as more and more mouth-breathers bought property they’d never be able to pay off.<\/p>\n Companies like AIG used the mess to create flaky financial instruments that no one really understood\u00c2\u00a0 and sell them to banks all over the world.\u00c2\u00a0 Credit rating companies helped by giving them triple A ratings.\u00c2\u00a0 And everyone was happy, buying and selling and counting their profits.\u00c2\u00a0 It was a ghetto garage sale, where everyone got rich selling their broken radios and frayed clothes\u00c2\u00a0 to each other.<\/p>\n Of course <\/em>it came crashing down.\u00c2\u00a0 It had <\/em>to.\u00c2\u00a0 And yes, AIG and all the other participants contributed greatly to the mess.\u00c2\u00a0 But it never would have happened if the government had let business make loans using time-tested principles for calculating risk.\u00c2\u00a0 There wouldn’t have been enough sub-prime mortgages to create this mess if it weren’t for our past presidents and congress’ insisting that home ownership was far more important than sound business principles.<\/p>\n Yes, I’m pissed at the bonuses too.\u00c2\u00a0 They’re wrong and they’re stupid.\u00c2\u00a0 But compared to the trillions we’ve spent trying to fix this, screaming at AIG is like beating up a drunken frat boy for pissing into a poorly constructed New Orleans levy, blaming him for causing the flood, and ignoring the real culprits – the ones who undermined the levy in the first place.<\/p>\n","protected":false},"excerpt":{"rendered":" Imagine, for a moment, that you’re deeply in debt (I know that’s a big stretch for most of you).\u00c2\u00a0 You’ trying to deal with a bill for $1,000 and you’ve got no money to pay it. Your son has just thrown a quarter in a fountain.\u00c2\u00a0 A quarter!\u00c2\u00a0 Like you can afford that. You berate […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6,4],"tags":[53,31,54,55],"_links":{"self":[{"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/posts\/642"}],"collection":[{"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/comments?post=642"}],"version-history":[{"count":1,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/posts\/642\/revisions"}],"predecessor-version":[{"id":643,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/posts\/642\/revisions\/643"}],"wp:attachment":[{"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/media?parent=642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/categories?post=642"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.davehitt.com\/blog2\/wp-json\/wp\/v2\/tags?post=642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}