People Will Operate Within The System Foisted Upon Them

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There has been a lot of talk lately about who is to blame for the current financial meltdown, with the right coming down firmly on the side of blaming the victims. Usually certain talk show hosts and writers will blame minorities and Carter for the Community Reinvestment Act, or they will blame the greedy homeowner, and to be fair, some people should not have gotten a home loan. But well over fifty percent of people forced into sub prime loans would have qualified for a more conventional loan. But, when a loan is given to someone with less than perfect credit, say at 5.5% and that person is making the payments, why increase that payment to a rate that will be well above his/hers capacity to pay? The inevitable will happen of course, the person can no longer make the payments, the bank forecloses and housing prices in the area drop further. The person or family is out of a home, the bank, instead of making hundreds of thousands over three decades will lose tens of thousands within months. Now of course, the taxpayer is being forced to bail out the banks, with no oversight, adding to a debt and deficit already out of control, essentially rewarding those who caused the problem.

What’s missing from this blame game is who is responsible for setting up the system in which we find ourselves living? It is not the poor. For the most part, it is a given that most people will watch what is on the television, even if it that is reality TV. They will drive cars that are popular at the time; they buy the latest fad at Christmas and this type of groupthink is counted on for commerce. So, why would anyone think that a rush for home loans would be any different?

When the things that the people in power are pushing turn toward the self-destructive or harmful, a larger portion of society will become non-conformists than normally is the case, and they will challenge the status quo; as was the case with the Iraq War. But, using your home as a bank was pushed by so many at the top, and bragged about as the new “ownership society” how can anyone blame those caught up in the this for what happened. The people on top counted on this reaction, and they got it.

Finally, I do believe in personal responsibility, but the people at the top set this system up, therefore, they are the most culpable for its failures.






http://www.fanniemaefoundation.org/programs/financial.PDF

Thanks to ihavenobias for his post earlier, which got me thinking.

[ColbertWatcher]

1. And sociopaths work outside it. n/t

[ihavenobias]

2. You nailed it with your last sentence about personal/corporate responsibility

Of course we should all have personal responsibility, I don't hear progressive arguing otherwise. By contrast I often hear conservatives completely dismissing the idea of any kind of corporate responsibility.

Not that I expect executives to act in our best interest of course, which is why we need sensible regulations.

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3. Thanks! Appreciated.

"Not that I expect executives to act in our best interest of course, which is why we need sensible regulations."

Right on!

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4. The more I think about this bailout, the more it pisses me off.

No oversight? That's surreal.

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7. Delete.

[punkin87]

5. K&R. I'm using this!

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6. Thanks.

[hbskifreak]

8. Sub prime Home loan crisis

Hey bro,
As usual, great post. I only have this to add:

All of the lending agencies had promised with big eyes and wide smiles to their victims, er, eh, clients, that if they only fulfill the 5 years of low payments, then before the higher payments kick-in, all they have to do is refinance at a lower rate, everything will be okay. And I myself remember hearing that same promise with that same fake smile 3 years ago when I myself declined a mortgage offer that would have put me into the kind of harm's way that 1/4 of the nation might be in presently.

Just like 11 years ago when I walked away from the USMC recruiting duty assignment, I am now, once again, faced with the good fortune of staring my correct decision in the face. Had I taken the recruiting duty assignment, some people would be dead today due to my stubbornness to decline a bad deal. Same with the home loan offer, some people (my family and I) would be suffering today, due to my stubbornness.

I am rejoicing that I made both choices as I did, but I want to make one note about the real estate agents themselves.

These people, not the lending agencies, these....parasites, are the Marine recruiters of today and are definitely responsible for at least some of the mess we are in as a nation. Every last one of those amoebas made 3-6 percent from every sale they made, and 3-6 percent of a $500,000, 900 sq foot shoe-box of a termite infested wreck POS house in Lakewood, CA is still a truckload of cash. And these vermin were closing on 1-5 of theses types of deals every week for YEARS, pulling up in their Benzs, acting all Holier than thou. Sure, they themselves didn't make the deals, but they always "knew" somebody who..."specialized" in "your" type of credit situation, and, don't worry, they always had your backs.

I think it is a true statement that personal responsibility, or lack thereof, played a part in this sub prime lending mess, but on a more personal level, the real estate agents themselves played a part, too. Like leading mice to the cats, the real estate agents set up this mess, and you can bet after every last one of them personally clearing 10,000-30,000 bucks a week for YEARS, that now they are all innocently kicking back and saying, "What...who, me?...Hey, I was only the realtor, THEY signed the papers...go after them! Now excuse me, I need to go pick up my Beemer at the dealer 'cause I'm late for my polo lesson."

The only thing about this whole mess I really hate is THEY won't feel any repercussions whatsoever. Other than perhaps needing to find a new line of work, because the average American citizen won't be able to afford a frikken cup of Starbucks after this whole mess is cleared up. No problem for them to go become some kind of...whatever...to help contribute to our society. Hey, maybe you could help me to spread the word to them all, that the Marines are still looking for a few men....oh shit, my bad, they are looking for GOOD men, aren't they. I got it, tell the realtors to go try applying for work at their local 99 cent stores, THOSE stores should be experiencing RECORD business lately.

Worms....all of them. May there be a special room in hell, right next to Ken Lay's spread, waiting for all of them.

A

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9. Great reply, hbskifreak! Thanks!