Our Slump (Part 2)

Our Slump (Part 2)

Here is a short list of a few elements that put us in this economic crisis:

Housing Industry,
Mortgage Crisis, --> Today’s Topic
Banking Decisions,
The fall of the Dollar.

The people blame the lenders for allowing their loan, the lenders blame the government for not restricting the loan, and the government blames the people for lying about the loan. I call this the tri-fecta-of-unethics. While everyone is sitting around rationalizing reasons as to why they were actually the ethical ones, in reality the correct answer is that all of them are to blame.

People making $30,000 a year were walking into banks and getting approved for $500,000 houses. How? They lied. The banks did not think twice about the family’s income, instead they said: “Have you heard about the adjustable rate mortgage?” Both parties sitting in the office, knowing that they can’t afford a $500,000 house. Everyone knew this was going on, including the government. Is it not the government’s job to protect the citizens, even if it is from themselves? It did not take long till people could not pay, and loans were going bad. To make matters worse, banks were selling and buying bad loans back and forth for years. Ethical?

So the plan is take the tax payers money, give it back to the banks (the same ones that made all these bad loans), because we do not want them to go out of business. On top of that, since the government is giving them tax payer money, they want to own a portion of the bank. Nationalizing the banks is not the way to go about solving this problem.

People say: “The banks shouldn’t go under!?!”

So here is the solution: People should be able to make a ‘tax-free’ private donation to the bank that they feel shouldn’t go under. I bet less people would donate if its money from their pockets, but what these people don’t understand is: taxes do come from their pockets. Theirs. Ours. Mine. Yours. Let me keep MY money that I have worked for. If I do not want to help a bank, I should not have to help a bank. My money and your money, is going to make an investment that will never pay us back! Our taxes are going to help private (although, possibly not much longer) organizations.

To sum everything up: the lender, the government and the lying home buyer are all guilty.

Our Slump

Here is a short list of a few elements that put us in this economic crisis:

Housing Industry, -->Today’s Topic
Mortgage Crisis,
Banking Decisions,
The fall of the Dollar,

Many people would say it was the housing industry that started and solidified this economic slump. One of the ways economists can watch an industry is by job gains/losses, and since a large majority of the house building industry consists of undocumented workers, keeping track of this is nearly impossible. For quite some time, the builders could see that the industry was in a slump. When America finally noticed the housing starts were down, many builders were already considering closing up shop.

According to http://www.census.gov/ “Privately-owned housing starts in January were at a seasonally adjusted annual rate of 466,000. This is 16.8 percent (+/- 11.0%) below the revised December estimate of 560,000 and is 56.2 percent (+/-4.4%) below the revised January 2008 rate of 1,064,000.” It was also just announced that housing starts are at an all time low. People are surprised to read these statistics when in reality, builders could have told us this is where we were headed for years. America feels the slump now, builders started to feel it five years ago.

If people started to notice the beginning of this slump five years ago, it could have been traced to the unethical mortgage industry then. We are now playing catch-up, trying to solve the problems of yesterday by giving handouts to the same banks that gave these mortgages to anyone that walked in their offices. Now don’t go blaming Obama for these problems, he is only doing exactly what he said he would do: More restriction, more handouts and more taxes.

It seems like the only way to have a voice to the government is to have a lobbyist, when in reality the government should the corporation’s voice to the world. In the future, America could avoid these problems by simply asking each industry how they are doing, and what are their largest problems? But that might be asking too much from our hard working, underpaid, under-thanked government.