The Bailout

The Bailout

I have not had much to say about this, since I have been a bit more worried about finding a job. Perhaps if the economy was as close to collapse as some people claim, it made sense. But I find myself wondering if the situation was really as bad as that. So much of the elite of this country has incentives to exaggerate the crisis, and the taxpayers make such a useful method of protecting rich idiots from their actions.

Several obvious problems: much of this was a conscious decision to loosen credit requirements so that minorities could become part of the "ownership society." It was a laudable goal, but the harsh reality is that the credit issues that disproportionately kept blacks and Hispanics out of the "ownership society" probably reflect cultural values associated with wealth creation. Lowering standards didn't solve those cultural problems, anymore than "race norming" test results makes everyone equal.

Whatever the government does on this bailout, I would hope that they would demand a big chunk of the potential profit--not just the risk. One of the bad things about fascism (which is what socialism that operates for the benefit of the wealthy really is) is that it socializes risks and costs but not profits. That's unacceptable--and probably why Obama and most other Democrats are part of the crowd that wants to bail out rich idiots--without demanding that the rich idiots lose their wealth.

Part of the other problem was that over the last 20 years, there has been a major division of mortage loan origination and mortgage loan carrying. I don't know all of what caused this, but I know that part of it was that quasi-governmental corporations like Fannie Mae were acting in the carrying capacity.