May 12, 2008

Torn between beliefs

I like to say that I'm fiscally conservative and socially moderate to liberal. Occasionally those beliefs clash, and the recent movement by Congress to provide relief to those with troubled mortgages tests my belief system. Now I'm the first guy to say that low income and elderly folks who got hoodwinked by fast talking mortgage lenders should get some relief. What happened there was clearly a lack of regulation and ethics. That happens all the time, and when it becomes fraud, not only should the victims get relief but the criminals should pay for the relief with their profits and their time. A little time in the big house getting abused by a murderer named "Frank the Stick" will, in general, provide the message to white collar criminals that fraud has a heavy price. A highly visible CEO getting "quality time" with Frank (maybe covered via a reality TV show?!) might be a better deterrent than our currently irrelevant regulatory system. But what happened over the last few years was more than simple fraud. What happened in the last few years was sheer GREED. A base sin. Simple common sense was thrown out the window by everyone. Anyone could purchase something, in this case a home, that was far more expensive than they could afford. A whole industry let this folly continue because there were no regulations to stop it or they were relaxed by the village idiot's (aka Bush) minions who again were motivated by GREED. Bankers, lenders, regulators, etc. all let anyone who could sign a valid legal agreement abuse the system. And that is my key point. At the end of the day, anyone stupid enough to pay for something they couldn't afford without a perfect storm of positive economic events to back them should be responsible for the outcome when that perfect storm ends. For every elderly person or individual who was taken advantage of in the housing boom/bust, there were ten people who were trying to take advantage of the system. Congrats to you while it was working. What you did wasn't illegal, so more profits to you. Now that the bubble has burst, it's time for fiscally reckless people to lose money. That's the way it works. But no, everyone is running to Congress asking for relief. "Our economy will tank if we don't take action" scream the masses. WTF?! Was anyone complaining when the financial sector and average Americans were making illogical profits? Nope. I, the conservative fiscal guy, lose money when I spend more than I make. I lose money when I buy illogical investments that fail to grow in value. When a stock craters that I own, I take a loss. When I buy a home and it loses value because the general housing industry collapses, I pay the bill because I personally accepted the financial and legal risk. So why the hell do some Americans feel like they should get special dispensation from their government when their stupid investments go south? They made stupid decisions and now must pay the piper. The government won't pay for their mistake. I DO!! I'm the honest, fiscally conservative guy who pays for this mess with higher taxes. I get no benefit from this fiasco. The only people who do are the bankers who made huge profits and now want dispensation as their Ponsi scheme fails. The people who benefit from government intervention are those who made poor business decisions relative to ARMs and no/little down payment home purchases who now want government assistance. Wonder why many believe America's era as the world leader is coming to an end? Because we as a society have become consumers, not creators, and when we engage in fiscally illogical follies (the dot com boom/bust, the housing boom/bust, the emerging commodity boom/bust) we just run to the government to bail us out. The problem is that our government is bailing us out with our own money, or worse, with debt that has to be repaid in the future. China, India, the EU, and others create more than they consume. We inflate value to create pseudo-growth that in time is always revealed as illogical. Whatever happened to basic fiscal responsibility? Make more than you earn? Invest in logical, grounded items that appreciate. Win by superior intellect, hard work, and a good old dose of personal responsibility? Innovation and value create worth and appreciation. Congress vexes me yet again. Personal and corporate responsibility appear to be alluding us in the pursuit of election year voter pandering... Warning. Snarky and bitter comment follows: And by the way, the small cadre of us folks who didn't chase irrational profits in real estate during the boom will now be bidding on homes and vacation properties at the rational price for these properties. While we might be pissed, I didn't say we were stupid.
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