Dude, that was HOUSING regulation. What would that have to do with you buying a car?
I’m just talking about lending in general. you intially brought up the cars aspect when you brought up your BMW. I was just extending that metaphor
late,
grmpysmrf
One important aspect of this debate is how much freedom institutions, such as banks, should be granted in their practice. What level of regulation should be applied to such practice. The free market advocate would say reduce regulation/limitations and allow these financial institutions to take the risks (or “moral hazards” as I heard today… what an obnoxious euphemism) they need to take to encourage growth in some sector of the economy. The socialist would say impose limits and regulations and keep these institutions on a leash and ensure the people are not exploited.
Personally I think there has to be a considerable level of regulation because banks are social institutions, a service to society and should not be operated as a capitalist business. They rely on your money to let them mess around so you have a right to say what they do with your money (even if you are not very well educated in the ways of economics). Do we willingly toss over our livelihoods to someone (who is supposed to know what they’re doing) and hope they do a good job? Thats pure laziness, and a form of regression because we should want to able to run all aspects of our lives to a considerable degree, in case the people we have running it fuck up.
The point grmpy makes about gambling in a casino, but not allowed to if the gambler is unfit to do so, is very important. Of course people who are unfit to gamble should be prevented from doing so as it will lead to social problems if they do (in this case the gambler cant make his rent, bills etc. and his family suffer as a result. This leads to desparation and maybe irrational actions which needs to be avoided at all costs) Dont know about the US but in Ireland a legally binding contract entails a number of stipulations: over 18, of sane mind, sober, and so on. This is a basic but necessary regulation but it exemplifies the need for such regulations as without them it would lead to chaos.
Now I dont know about the US case but if banks were telling people they could secure loans when the banks knew that there is a good chance they cant pay them back, that is wrong… a social institution cannot endanger the public for their own agenda, no matter what plan they have to “boost the economy”.
It just goes to show that arguments for the free market, minimal limitations etc. (ie capitalism) a system that is supposed to the most efficient way of running the economy can and does fail and what happens when they slip up? They come running back to the people. I dont mean to sound like a socialist here but its true.
Im telling ya, capitalism is not the end of history.
Of course all this might seem idealistic but when the reality presents such situations as what is happening seemingly all over the place now, its time to go back to the drawing board.
Now I dont know about the US case but if banks were telling people they could secure loans when the banks knew that there is a good chance they cant pay them back, that is wrong… a social institution cannot endanger the public for their own agenda, no matter what plan they have to “boost the economy”.
That is exactly what happened!! you don’t need anymore proof then that stupid sliding interest rate!! low to zero interest rates in the beginning of the loan to make it look as if the person could afford the loan ONLY to be hit with 12-14 percent insterest rate in several years.
The low -zero interest rates make it look as if they can afford the loan and that is how they get into the bind they are in. The banks knew full well that these people wouldn’t be able to to afford these loans as soon as the interest rate began to slide up! These people run numbers for a living they knew EXACTLY what they were doing!
t just goes to show that arguments for the free market, minimal limitations etc. (ie capitalism) a system that is supposed to the most efficient way of running the economy can and does fail and what happens when they slip up? They come running back to the people. I dont mean to sound like a socialist here but its true.
Im telling ya, capitalism is not the end of history.
I’ve said it before I’ll say it again and you can quote me,
all capitialism is, is a slow march to tyranny!
Of course all this might seem idealistic but when the reality presents such situations as what is happening seemingly all over the place now, its time to go back to the drawing board.
I don’t think it’s idealistic it’s common sense! there has got to be a way to mash capitlism with socialism… I guess you would call that regulation?
Late,
grmpysmrf
Gotcha.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Check this link out. It’s what I’m talking about. Bill Clinton and W. both dipped their balls in it. It’s not the sole cause of all this, but it surely helped.
When there were stricter regulations on lending, people bitched and had it changed. Now, after loose lending practices, people are bitching and calling for tighter regulations so that people can’t make bad decisions for themselves. No one wants to take personal responsibility for their actions any more (corporations included), they just want to blame their problems on “greedy” people who are smart enough to make money. Well here’s a novel idea: Read, inform yourself, if you’re not smart enough, go see a financial adviser and make good financial decisions. Also, don’t go eat at Ruth’s Chris and buy a fucking LCD flatscreen. Ultimately, people believe they deserve what richer people have. They spend recklessly want the gov. to bail them out of everything and redistribute wealth. People don’t want to work hard, they want a fucking hand out. Stupid people who can’t take care of themselves need the government to protect them, and Obama’s administration is going to cater to people like this.
I understand with the whole greedy banker thing, but the banks didn’t break any laws, and they were (they thought) setting themselves up to make a lot of money. Isn’t that the purpose of any business?
I understand with the whole greedy banker thing, but the banks didn’t break any laws, and they were (they thought) setting themselves up to make a lot of money. Isn’t that the purpose of any business?
To some degree, yes. However, when they mislead people and blatantly lie to them about interest rates for adjustable mortgages, that is where it’s bad. “Oh sure, the interest won’t adjust much - you’ll be able to afford it at 5% interest rate and it won’t increase”. Well, that’s obviously lies. So it’s them for repackaging it as such and it’s to the owners who bought these places without consulting basic budgeting.
Gotcha.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Check this link out. It’s what I’m talking about. Bill Clinton and W. both dipped their balls in it. It’s not the sole cause of all this, but it surely helped.
I’ll check this out in a bit, I’m interested but a little too busy at the moment to really look at it.
When there were stricter regulations on lending, people bitched and had it changed. Now, after loose lending practices, people are bitching and calling for tighter regulations so that people can’t make bad decisions for themselves. No one wants to take personal responsibility for their actions any more (corporations included), they just want to blame their problems on “greedy” people who are smart enough to make money. Well here’s a novel idea: Read, inform yourself, if you’re not smart enough, go see a financial adviser and make good financial decisions. Also, don’t go eat at Ruth’s Chris and buy a fucking LCD flatscreen. Ultimately, people believe they deserve what richer people have. They spend recklessly want the gov. to bail them out of everything and redistribute wealth. People don’t want to work hard, they want a fucking hand out. Stupid people who can’t take care of themselves need the government to protect them, and Obama’s administration is going to cater to people like this.
I understand with the whole greedy banker thing, but the banks didn’t break any laws, and they were (they thought) setting themselves up to make a lot of money. Isn’t that the purpose of any business?
I totally understand what you’re saying, and I agree with you for the most part but where I think we differ is in “blame” (for lack of a better word) People absolutely need some self control and what better way to teach self control than by this B.S. going on right now. BUT greedy bankers taking advantage/lying to people about their wants and abilty to attain that better life is far worse than wrong I think it’s criminal!
Of course the poor and middle class want to live wealthy who doesn’t? But wanting that being able to get that are two different things… Amercans have always lived above their means and it used to be that institutions were pretty responsible about, taking adavantage of that, too a minimum, but not so much anymore.
People are calling for a redistrubution of wealth not because everyone is losing their houses(although that makes the cry louder) but more so because the gap between the wealthy and the poor is shrinking so ridiculously fast that it may happen in my lifetime that the middle class is phased out!
I don’t think Obama caters to hand outs so much that he caters to fairness (not equality mind you but fairness, because what’s fair is not always equal and what is equal is not always fair)
Late,
grmpysmrf
Man, FUCK THIS.
Man, FUCK THIS.
Seriously.
I need a drink.