Friday, September 26, 2008

The Ant and the Grasshopper

Now seems like the good time to pull out that old fable by Aesop. Why should the 95% of the homeowners who are paying their mortgages and the millions of others who rent because they know they can't afford to buy a house be forced to pay to bailout the banks who made "no money down" loans to sub-prime borrowers whom virtually everyone expected to default, now that they have defaulted?

I know. I know. We face economic collapse and Depression-like circumstances if we do not. And perhaps a case can be made that Christian compassion demands we help "the least of these." But isn't it the case that good intentions and an excess of "compassion" (in the form of making loans to those who lacked good credit histories) what got us into this mess to start with?

2 comments:

Eric M said...

Bad loans weren't made out of "compassion," but short-term greed.

Being an up-to-date-with-the-mortgage homeowner myself, I tend to agree with you in principle. What gets me is that at least some of those in dire straits now are there because they lacked the common sense and education to know that they were being swindled when they were sold houses using sub-prime mortgages.

I'm guessing I'm a mite bit more liberal than you (still - although your conservatism did make some impact), and it might not be PC to say this, but some people just shouldn't be granted credit and selling it to them is more of a crime than them defaulting on it.

The Bullhorn said...

I agree. Liberals and conservatives can both agree that underwriting standards are there for a reason. What I'm saying is that, from my perspective, a misguided sense of compassion led gov't to pass things like CRA and then to push for wider home ownership among people who had no business being homeowners due to their credit and job histories, income, etc. It shouldn't be considered racist or discriminatory to point such things out, nor to say that these things are the REAL reason why we're in crisis now.