Stupid Government to Bail Out Homeowners

I would rather they penalize banking institutions than homeowners, even irresponsible ones. Even if unqualified borrowers shouldn't have received loans, the banking industry and hedge fund types exploited the situation to create this crisis for short term gain. The buyers took opportunities that were offered to them without thinking of the long-term because most if not all of them were inexperienced and had no idea what was really going on.

What I don't want to see is taxpayer money going to these financial institutions for bail-outs. That's us basically telling corporations that we're happy to let them fleece us with no risk of financial ruin.

I agree that government blew it by enabling this blatant, short-sighted corporate cash grab, but that's pretty much standard operating procedure for the Bush administration.

It's also important to note that, in many cases, the loan officers in these situations acted like glorified used car salesmen. Either way, keeping the US economy from completely tanking is a noble enough cause.

Isn't this why the govenrment exists. To help the citizens of it's nation do things they could individually never do on there own.

...

Blame it on Bush, hell yt, blame it on the fucking rain. Is there any figment of your imagination you can't blame on Bush? Christ I grow so tired......
Folks signed the papers for horseshit they couldn't afford.
2+2=4. Can't they freaking read? I refuse to pay for an ignorant ignoramous that lives in a new house and I reside in a single wide trailer and can buy their ass out TOMORROW,.

"Isn't this why the governrment exists. To help the citizens of it's nation do things they could individually never do on there own."

Iffen they got off their ass they could. Period.

Okay Witchesbrew. I suppose you are also in favour of letting Merril Lynch, Citigroup et al. burn.

After all, they knew that the people they sold loans to won't be able to afford the payments. You should refuse paying for greedy managers who live in mansions payed by the commissions they gained by selling this type of loans.

And you should refuse paying bail to companies that reward failed executives with "golden parachutes". Why should the taxpayer give money to save a company that's handing out hundreds of million of dollars to the people responsible for bringing them to the brink of bankruptcy?

People are supposed to learn from their mistakes. You should be less willing to do something stupid if you know Superman isn't gonna fly down and save your ass.

So the question becomes one of stability versus wisdom. Is stability so important that you should prevent learning from mistakes, or is the wisdom gained from suffering the consequences of your actions a more positive gain than maintaining stability?

This applies to businesses as well as individuals and families. Nobody wants to see people lose their homes or businesses go under and have massive layoffs, but are they learning anything that will prevent future foolishness if they get bailed out?

I don't have any answers, or even much of an opinion. Just lots of questions, as usual.

I don't have ANY say so in where my taxes go, mastronikolas. I pay a decent man's family of four in taxes and yet have no fucking say. So go blow about taxes.

"Doll it out, witchesbrew and shut the fuck up". I grow weary of the horseshit. Anyone with half a brain knows iffen you tax the rich MORE, the poor will pay. Will Pay, WILL PAY. You sayin it don't trickle down? Christ.

You honest to God are saying Citigroup will lose a dime? I have a credit card(s) I could buy a brand new any type of vehicle you want to name here. Do I buy it? No, because 2+2 does not equal 5.

I see what u did there.

Part of me wants the leveraged people to burn. And that part would be most of me. I see borrowed money buying ugly houses, oversized trucks, and middle-class bling. Frankly, a lot of these people would be better-off not being middle class — or at least unable to buy the shit they waste their money on. I'm inclined to agree with Danny Chico. Disillusioned with the middle class at the moment. The worst Are full of passionate intesity.

" exploited the situation to create this crisis for short term gain."

This is how every major company in the US and much of the western world is run these days. Outsourcing, offshoring, banks, crap materials...all in the name of making the buck now and being long gone before the consequences hit.

And I'm saying this as an optimist.

I can't repeat how ignorant this statement is. I can't repeat how ignorant this statement is. I can't repeat how ignorant this statement is.

Don't bail out the loan institutions, hell we all live on cash, right?

Who among here does not live beyond their means?

Iffen they go down, we all go down. Jesus effen Christ. Unbelievable.

There still must be controls as to how these institutions operate though. You can't just let them have free reign and then bail them out because the economy needs them. That creates entities that do whatever they want and then get away with it when things go bad. There must be a rule of law.

So don't worry about the banks, this move here isn't even about them really. Wall street got their rate cuts and will get more. The administration also authorizied government back organizations like fannie mae to begin buying certain bad debt from the banks to relieve them of pressure. Do you know what this means? The government is putting itself out there to back bad bets made by bankers gone wild thereby putting the burden on all of us. So when you ask who is bailing these people out? it's all of us.

We live in a capitalist society with some pretty rigid social strata. Poor people should not be living in the Mcmansions that they are in. Foreclosures will get these people out and back to the houses that they can afford. The poor and lower middle classes are NOT promisied big houses or shiny new cars every few years, but they thought they could have it and the bankers allowed. Now, the economic forces on which our society is based will sort it out and slap everyone back to where they belong. It's not about ideology, bad banking practices cannot go on forever and should not be bailed out when it comes back to haunt the lenders themselves.

Everyone is entitled to dream and strive for what they want. The mechanisms exist for you to move between classes as well. The problems come up when a person wants to live beyond their class and beyond their means. Americans already have a love affair with debt, but with each generation it gets pushed further and further until now, we have millions living lifestyles they cannot afford and now feel entitled to them.

I don't have a disdain for the poor. Our system of finance works in a certain way and if stressed by bad lenders and irresponsible borrowers, it will break down as we're seeing now. I'm not saying keep people poor, I'm just saying, the economic forces of capitalism will bring everyone back to where they should be.

"the economic forces of capitalism will bring everyone back to where they should be." by GAC

Tell it like it fucking is. When you get the crap in the mail offering you a pie in the sky interest rate. Tear it the fuck up. It goes to God knows what in 60-90-180 days. Who here can't read???????"?

ARM, balloon, blah blah....
When is someone gonna be accountable for putting their John Hancock on the paper?

Be equal on the one hand and then crying crocodile tears on the other.
Pick a side. For the love of God, stand for something.

You signed it, pay it. I will not.

"People in America should feel entitled. Their country owes them and they know it. "

Entitled to what? The sweat from my brow? Get a grip. This is the most ignorant post I have read. Are you in yer Mom's basement paying for high speed internet with aluminum cans? If you actually made a dime you would be VERY concerned with how it is spent. (Shaking head and walks away).

Who you think pays for it?
I am.

This key piece of information is brought to you by a thorough and well-researched examination of the subprime crisis in the Denver Post.

Whats your answer, yt? I know you must have one.

I got two chickens that I hatched and babied from infancy. Fed them, fed them, FED THEM. You gonna give one of mine to the fucker that sits on the porch and dreams about "tomorrow"? Ya wanna give him my eggs and my chicken?

Unless you identify yourself as a lending institution, I think you might be somewhat confused about the issue. Check out the story I linked to - read the whole thing - and read the CNN Money piece that opened this thread and I think you'll see that the situation is not analogous to me giving your chicken to the dreamer on the porch.

Yeah right, I don't contribute 47%. Fuck you.

Barzun, do have the numbers to back this statement up? I'd like to see them.

Your assertion that there is virtually no class mobility in America.

I think there is inertia involved in economic mobility just like any other kind. At the absolute bottom, it's very, very difficult to move up. But if you start in the middle, moving up is much more attainable. Which is not to say its ever "easy" exactly, but the more you have, the more you can help yourself out. This may be painfully obvious to everyone, but just sayin'.

Shouldn't that be counted as mobility? I would think that lowest class to middle-class is pretty good mobility.

It should be gradual. No one deserves to jump immediately into a higher income bracket. Upward mobility should be based on hard work and dedication over time. I'm not arguing that it is and that it is fair/easily attainable but I am saying it should be gradual.

And a quick search found this:
"Wages for American men born between 1963 and 1968. The study, by Bhashkar Mazunder, an economist at the Federal Reserve Bank of Chicago, shows that 32 percent of men whose fathers were in the bottom 25 percent of earners were themselves in the top half and that 34 percent of men whose fathers were in the top 25 percent were themselves in the bottom half. Mazunder also found that 14 percent of men whose fathers were in the bottom 10 percent of the wage scale made it to the top 30 percent and that 17 percent of men whose fathers were in the top 10 percent dropped down to the bottom 30 percent. "

This thread is crazy awesome. Or awesome crazy. Witchesbrew is the new Wlliam S. Burroughs. You wanna give him my eggs? You wanna give him my chicken?!?

The more people there are on top of you, the harder it is to move.

Frank...

I've seen numbers that wages are stagnant (and are starting to decline). Less wages mean less money to buy capital assets with which means less mobility overall.

I'm no economist, but it seems, anecdotally anyway, that wealth creation for the middle-class is at a standstill which definitely affects mobility.

From Senator Bernie Sanders (Independent, VT):

I call bullshit. It is not a zero sum game. The fact that there are several million millionaires in the US does not prevent me from someday becoming one. There are more sources of wealth available now than there were 100 years ago (hell, 10 years ago). People make a living doing jobs that didn't exist until recently (how many Web designers were there in 1980?)

They are not poor. They are lower-middle class to middle class. And they probablly thought they could buy those mcMansions because the Mortgage and banking industries spent millions marketing to them.

While I agree that the capitalist system has a way of correcting inbalances like this, you need to consider the human cost. The US has really become an ugly, dog eat dog sociaety where anything goes. I live in California, and I can tell you those Mortgage brokers/real estate salesmen/bankers would tell you any damn thing to get you to buy a home. Meanwhile you have everyone at the office bragging about how their home appreciated by 100% in the last few years. Oh, and how they just spent 2 weeks in Cancun by taking out a 2nd mortgage. Oh, and then you go home to your shitty apartment in Oakland, where your wife complains that your kids got the shit kicked out of them at school, before the school was closed down due to a shooting. Damn right these people jumped at the chance to move to Stockton or Sacramento. And do you think the Real Estate guy told them their loan would reset to double their intro rate? Nope, it was presented (if at all) as a highly unlikely possibility.

There is a word here that few people are using, and that word is FRAUD. I keep reading that fraud was widespread but not the major cause of the loan crisis. I think that is crap. Where the goverment can and should step in is to go after those entities (i'm looking at you Countrywide) that are most resonsible for this catastophe. Capitalism breaks down into anarcy followed by fascism if there are no rules.

I was referring to Rugby.

Actually, what I implied was that it was harder to move from the bottom than from the middle, not that it's impossible. Do you agree that it's harder, but not impossible, for a poor person to become rich than a middle-class person? There are so many disadvantages that poor kids have (nutritional, academic, inspirational) that's it hard to imagine they wouldn't result in some social stagnation, and in reality they do. There is a reason that Head Start programs are economic genius, and it's that when you give poor kids a little more government assistance than rich kids, they do a lot better than they would otherwise and are more likely to end up employed and taxed.

Ha! Don't know rugby. Starting to finally get (euro) football.

I agree that it is harder to move from living in a tar paper shack and working sub minimum or minimum wage jobs to the middle class. I guess the question is, is it ever realistic to think that the majority of people in poverty can move out in a single generation? This is the old (1950's) Liberal vs Conservative deabte of "equality of outcome" vs. "Equality of Opportunity"

Then again, (and this is I think where the problems stem from in large part), during and after WWII you could 1) work in a auto factory doing close to manual labor and get good wages and benefits, 2) go to school on the GI Bill. Those two circumstances caused a lot of people to move out of poverty to the middle class. Now both circumstances have changed. Going forward you won;t be able to get those types of jobs (unless the dollar falls more and stays down, in which case the Us could become an Outsource mecca).

The most important factor of all is the family environment. People who move up in terms of class likely as not had a strong, supportive family (nuclear or not) and very often an extended family to apply pressure to succeed as well as resources to help.

I'm not trying to ignore the rest of your post, but I think you really hit the nail on the head here. The home environment is very important to a child's development, and the sad fact is that lower-class homes are much less likely to contain children's books or challenging, stimulating toys. This isn't because the parents don't love their kids, but because poverty leads to tough choices, such as the new Harry Potter book or some ground beef for protein. Beyond that, there is often little parental supervision due to all available parents working full-time. The disadvantages get compounded.

On that note, taking away a poor kid's home is probably the best way to destroy the home environment. Instead of bailing out the banks, the government should take that money and put it into affordable housing.

It astounds me that so many business leaders fail to see the connection between social security and economic growth. Pure capitalism is by its nature a temporary, unsustainable system; artificial forces such as taxation and social programs must be introduced in order to prevent collapse.

Cylon, I agree, people were deceived, but despite being poor, it was their responsibility to learn how an ARM worked before signing the paperwork. I know noone reads the fine print, but it's there for a reason. I do place much much more of the blame on the banks though. They are the ones who know the system and they used it to their advantage and now they are getting a much better deal from the government than homeowners are. I was against their bailout and so it translated to being against one for homeowners as well because even if they were deceived, they do share part of the blame. (even if it's much less than the part of the lenders.)

And yes, class mobility IS getting tougher due to the disparity in the distribution of wealth and the stagnation of the middle class. The pro business policies of this administration sealed that deal, but the mobility DOES still exist and the lower classes should not use the negative statistics as an excuse to not keep trying their hardest to claw their way out. Hopefully, a shift left in fiscal policy will be coming soon to help these people and our nation out of debt. The right has totally failed this country regarding fiscal policy despite their historic stands on the subject.

Actually, inspector, the Right has completely worked within its historic stands on the subject.

If they really want to do something for the economy (and single-silver bullet ideas ALWAYS work), they'd start taxing dividends as ordinary income or at a higher rate. That way, instead of treating corporations as ATMs, the excess Earning and Profits might be reinvested into the corporations themselves which would increase the amount of money spent on capital, both human and otherwise. That increase spending may have a positive impact on the economy at large, which would help people across the board.

Or not.

And Adam Warren, while I agree with you, I don't think those opinions, valid as they are, should be ruling opinions.

Well, I did make my statement in terms of visceral reaction; my gut feeling, based on what I see on the news and in my life, is that the middle class, honestly hoodwinked by advertisers, has opted to waste economic opportunity on copious amounts of junk — all this at the expense of the truly impoverished, global environmental health, and the economic stability of North America. So yeah, my first thought: fuck them and fuck the banks. Just a thought.

No one is born with a desire to own those things, and besides, however hateful the thoughtless consumer is to you, he is the natural product of his society, and should not be penalized for conforming to his society's values and standards.

This is wrong. The idea that people are blank slates entirely conditioned by socialization is a violation of common sense. It also creates a worldview condusive to warped ethical standards; society made me do it should never be an excuse, and personal accountability is a necessary to moral functionality.

"and personal accountability is a necessary to moral functionality."

Fucking A.

I raised the chicks from infancy, idiot. I feed them and mother them from an incubator. The point was that YOU want to give them away to another who cannot get off their sorry ass to raise one. Analogy is lost on you.

Did you take the chickens to Iraq with you?

Please stop giving me rep. It makes me doubt my worth as a human being.

Man, I love this Preznit!

Americans need to stop living beyond their means. This whole thing is about people with shitty credit trying to get loans they can't afford or just wanting it all at once instead of working hard and saving for it. This BS entitlement mentality needs to end. This seems like a reasonable solution, a must to keep recession at bay, but ultimately though, it's not the governments job to take care of matters people need to know about- like money, how to save it, spend it and invest it.

Predatory lenders need to have their asses kicked as well, but then again, those who want to buy a house need to save money and read up on what it takes to get one. If you walk in there broke and ignorant, you deserve whatever you get.

I know so many people who've bought so much crap on credit cards and then wonder why their credit rating is in the shitter.

Seriously, why don't we have finance classes taught in high school? Let's start sooner! Practical stuff like, how to balance a checkbook, the evil of credit cards, how to keep your credit rating solid, how to invest, how to buy a house. Oh yeah, because shop is more important.

Only in a dog pile. Education and drive can take you as far as you want.

People were also very trusting of their Mortgage brokers. They were told real estate always appreciates so they got the shitty loan they were qualified for. They made a bad choice. Lord knows no one in this thread ever has made a mistake. Nope. Nothing but smart forward thinking people here.

And to be perfectly frank, that's what pisses me off about this whole fandango. America is getting really ugly. All these tough-as-nails bastards running around, shooting their mouth off about people "getting what they deserve." It's just more shit from the pseudo-tough. How about a little fucking empathy? We're a fucking community; we should start acting like one and being less concerned with being hard-nosed. Most of the hard-nosed bastards I've met cry like little girls when bad things happen to them, anyway.

Oh, and by-the-way, "subprime", in this context, applies to a type of loan that a lot of people went for regardless of their credit rating. People with good credit got these shitty loans and mortgage brokers were happy to give them out. It was a drunken orgy.

Not always. Again, wages are stagnant, and have been stagnant for the last 30 years. All the education in the world won't help you when you have no capital to invest and when your highly skilled computer job gets outsourced. To truly be mobile, you need capital assets. Capital assets are hard to come by when you're broke.

Face the facts boys: social mobility is at a standstill, and stupid Republican economic policies are attacking the shrinking middle-class. Those gilded assholes want to return to the 1890's, and we're letting them take us there.

The brightest minds will always make it to the top, but for the average person, someone like you and me, getting out of extreme poverty is an exceedingly difficult task, the odds are highly against a person of normal abilities and intelligence getting out. These aren't genetically deficient people who refuse to take the chances given to them, they're normal Americans waiting for the chances they were promised.

Can you back up that assertion?

I read it somewhere. Let me do some digging and get back to you.

Not to stick my head into the lion's mouth, and I'm far from an expert on this kind of stuff, but isn't the bigger concern here that the proposed initiative is really only there to help out the lending firms? Sure, it gives people a freeze on their rate for being fooled (or being too stupid, depending on your stance), but at the same time it serves as a save for a lot of these firms in danger of losing huge amounts of business from the same people in ARM deals who would otherwise reset their loans through (potentially even more damaging) consolidations. A freeze across the board like this gives people reason to stay, and secures the investment market for firms that have already earned billions in profit off of what is essentially a broken ratings system that a lot of regular people rely on. They manipulated the system, they won big at the expense of people's financial health, and they get the save by an initiative that's framed in a way that lets the Pres say that anyone who opposes this HATES regular folk in need of help.

I don't want to sound like a liberal crazy here, but it's another example of incremental help to the people who need it the most only coming as the result of a huge windfall for the corporate interests that back the legislators who come up with this mess.

But I'd like to see more witchesbrew v. Barzun in this thread if possible. That is pure entertainment.

The problem is, the lending institutions borrow money from banks so if the lending institution goes belly up, declares bankrupcy etc... they then stiff the banks and the amount of money borrowed is so staggering some banks will also go belly up or go bankrupt, people will go into a mad frenzy to take their savings out of banks because they're afraid of not being able to get thier money and a few other bad things will happen which ultimatly means a great depression. So, yeah.. this is a necessity to stagger the problems over years then a giant vacuum sucking out the economy all at once.

example 1 - Countrywide borrows from 40 banks
the next day, a rush of customers tried to pull cash out of countrywide in a panic

This of course, not something anyone wants to talk about. Funny thing... try to google "rush to pull cash out of countrywide" and then click on the mainstream articles or click on this search drudgereport headline search, countrywide and see how many articles are no longer found. You ever watch the movie Rollerball? the original... I think more people should watch that movie as we creep into the digital age.