More Than Fat Cats Responsible for Financial Crisis
[This is a portion of the first part of a series I’m doing over on my own blog regarding the current US financial crisis and our grappling with it.]
Only those willing to be seduced are seduced.
Nobody persuaded into doing the wrong thing can credibly argue, “He tricked me,” or, “She jumbled my thinking,” or “The devil made me do it.” The evil all around may pull at us, but we are the ones who cave into our inborn tendency to do the wrong thing, no matter what the wrong.
Believe me, I know. I do things that are wrong and, in the end, I realize I only have myself to blame.
Only those willing to be seduced are successfully seduced. I’ve been thinking about that a lot lately as the nation grapples with the financial crisis. It was caused, it’s said, by the reckless policies of major lending institutions. Obscene compensation and benefits packages given to corporate CEOs and other company hot shots made things worse.
It’s all true, of course. And these realities are among the reasons that both Democratic and Republican members of the House of Representatives offer for not passing the $700-billion bailout or rescue package forged by the White House and congressional leaders over. “Why should we give $700-billion to these greedy corporate honchos?” It’s a fair question.*
I hate it when legitimacy, such as that enjoyed by the captains of the lending industry in recent years, is given by the government. For several decades now, Democratic and Republican Presidents and Congresses have endorsed and allowed the practices of the big investment bankers and mortgage lenders. Presidents lauded the ever-increasing homeownership rates, ignoring the fact that this “progress” was a house of cards erected on financial quicksand, bricks and mortar stacked on toilet paper. It’s high time that the illegitimate practices of the big mortgage houses were changed.
But others’ practices need to be changed as well: Those of the borrowing public.
Nobody forced people to get sub-prime loans. Nobody forced consumers to buy houses with no money down, with insufficient income to make loan payments, all on the less-than-shrewd bet that property values would inevitably increase and, borrowing from projected future value, they could refinance their way out of debt. And nobody forces consumers to use their charge cards as revolving loans.
The greed of the now-pilloried corporations was rewarded for the past twenty years by equally greedy consumers who were working the angles to get into houses, to own other things, to effectively steal their ways to more comfortable lifestyles.
Greedy lenders seduced people. But they couldn’t have been successful without greedy borrowers who were willing to be seduced.
[To read the entire post, go here.]
*Proponents argue equally fairly that the bailout is really for the entire economy, restoring liquidity so that deserving consumers and business owners can have the credit they need to buy homes, invest in inventory, and make payrolls.