Originally Posted By: Dave Vedder
SW + 1

The banks had no business loaning money to those who clearly could not pay. They would never have done so had they intended to keep the loans themselves. They knew they were writing very risky loans and didn’t care because they saw a way to bundle and sell the bad loans and make a quick buck. Every manager that ordered his staff to ignore prudent income and collateral requirements should be fired. They ignored the basic principles that stood banks in good stead for centuries. The investment banks almost destroyed our economy, caused the loss of millions of jobs and ruined countless retirement accounts. They should pay a heavy price for that. Many Americans do not believe they paid enough or learned their lesson.

I find it incomprehensible that many politicians now want to roll back the new financial reform regulations. It’s clear that liaise faire did not work.


I absolutely agree with everything you said here, except that I think the people who took on those irresponsible loans should shoulder their share of the blame. I know a lot of those folks bought with no intention of seeing the mortgage through; they just wanted a quick flip so they could use their bogus equity to buy another house with conventional financing. That, as I understand it, is speculation, which is risky, to say the least, and when risky choices betray us, we have none but ourselves to blame. Minus the speculation, figuring out how much you can pay on a mortgage doesn't require anything more advanced than subtraction.

As for the laissez faire - it pisses me off as much as anyone. I hated the bailouts, in no small part because of the "too big to fail" language that was used to justify them. In my opinion, if a business becomes too big to fail, that is precisely why it must fail. In the absence of competition, free markets fail. The only thing worse than the bailouts themselves is that no lessons have been learned in the process. Another, much worse recession will be coming in another 50-60 years (assuming we do eventually pull out of this one, of course).