Erasing Moral Hazard

I cannot understand the mentality of someone who slams Wall Street while they simultaneously ask for its support

A position like this usually indicates an avoidance of a point.  That point in this case would be acknowledging the federal government’s interference and what affect it has.  Under George Bush, the regulators didn’t stop Bernie Madoff.  Regulators are federal employees paid for with our tax dollars.  When the United States Government chooses to assert themselves as “Master” instead of “Servant,” the consequences are never far behind.

We saw it happen with the collapse of the banking industry.  When is someone going to confront the president with the fact that it was government interference which lead to the creation of Fannie and Freddie?  What did these government entities do?  They used taxpayer money to back bad loans.  This practice — along with regulation — enabled corruption all across the land.  As with most government “assistance,” it enabled the corrupt and punished the worthy.  No moral hazard whatsoever.  Big homes with no money down!  Subprime mortgages for everyone!  A sweetheart Countrywide deal for Chris Dodd and a scratch on the back from Barney Frank’s “acquaintance” sitting on the top of the banking institution’s panel.

It makes one wonder why “the last eight years” was referenced as Obama’s boneheaded hypocrisy (damning Wall Street while asking them to be your friend) shines through it all. 

The good news is that Americans are inheriting a lot of important wisdom right now and November is right around the corner.

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3 thoughts on “Erasing Moral Hazard

  1. Steve I totally agree with you and I would like to add one thing.

    When are all of these deadbeats, scofflaws, and dregs of humanity going to be taken to task for buying homes they could not afford and walking away scot free? A damaged credit rating? That’s hardly a price to pay. The loss of a home? They end up renting instead.

    Find me the gang of thugs that made these people sign loan papers and buy real estate they could not afford.

    Just because someeone offers you anything doesn’t mean you have to go for it. I chose to sit out the home buying spree and I am glad I did.

    For a short time in our nation’s history, bank robbery was legal. All you needed was a pen.

  2. “When are all of these deadbeats, scofflaws, and dregs of humanity going to be taken to task for buying homes they could not afford and walking away scot free? A damaged credit rating? That’s hardly a price to pay. The loss of a home? They end up renting instead. ”

    John, you’re right. They were renting anyway. They were not accumulating equity because they kept refinancing, they certainly did not put a substantial amount of money down. Many of them ruined the properties once they found out they were being “evicted.”

    In order for Wall Street to behave in a stupid and irresponsible way took Main Street acting in a stupid and irresponsible way. And the only reason Main Street was allowed to act stupid and irresponsible is because the government allowed them to do so via Fannie and Freddie.

  3. “And the only reason Main Street was allowed to act stupid and irresponsible is because the government allowed them to do so via Fannie and Freddie.”

    Before I moved 2.5 years ago, a woman who cleans houses for a living bought the fourplex next to mine for $1.3. I know this because she told me that is what she paid for it. She also told me she cleans houses for a living.

    I thought to myself, “How in the hell did she get approved for a $1.3 millioin dollar loan on a job that at best pays $20 per hour? Where did she get 20% down?”

    I guess she had no down payment and the bank lent her money because she had a pulse and could breathe?

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