Economic Crisis: Its Your Fault too, America

One of my favorite sections to read each morning in the Pottsville Republican and Herald is Thunder/Enlightning. Aside from keeping the pulse of what ordinary Skooks think, the often boneheaded and ignorant comments lend some entertainment value. In today’s edition, one dunderhead from Ashland stood out from the rest. He wrote:

I don’t think congressional Republicans get it. It has been their policies through Reaganomics, trickle down economics, and deregulation that caused the economic faults of today. Yet they are in the Senate and House of Representatives trying to dictate how to correct the problems that they caused. I think it is ridiculous. It is time for them to stand back and let the Democratic Party and liberals in Congress change the old policies and go in a new direction to try to resolve the mistakes that were made over the last eight years.

It is easy in this economic climate for ordinary Americans to blame one political party or another for all our ills. Heck, it is what we always do. However, in the spirit of  our new era of “change” in Washington, I think it is time for another variable in this equation to finally be called out for their role in this recession: YOU. We would all like to think that the ordinary people of this country are mere victims of circumstance and have not played a staring role in the current economic meltdown, but jsut because we wish that were true doesn’t make it so.

Yes, Congressional democrats during the Clinton administration enacted legislation that mandated mortgage lenders give money to buyers with poor credit history and not enough income to sustain a regular house payment. Indeed, the democratic party created the sub-prime mortgage market.

Yes, it was the Bush administration that softened regulations on these lenders that enabled them to package these toxic mortgages and sell them to institutions like Frannie Mae and Freddie Mac, which was on the taxpayer dole, to free up more capital to lend more money to more deadbeat home buyers.

Yes, it was politicians on both sides of the aisle who took substantial campaign donations from companies like Countrywide, AIG, Bear Sterns, and Lehman Bros., to allow the horrid practices to continue so that greedy executives could continue taking huge profits until the bubble burst.

They all set the stage, no doubt about it. But the real leading man in this production were the American people themselves. It was us who applied for a mortgage on a $200,000 property when we only had $60,000 of income coming in each year. It was us who agreed to shifting mortgage rates and balloon payments. It was us who kept buying low value properties with the expectation of fixing them up and flipping them for three times what we paid. It was us, who refinanced the fixed interest mortgages on our homes at 150% of the real market value, so that we could install expensive in-ground pools, decks, and guest bedrooms. And it was us, who couldn’t make our monthly payments because we were living way beyond our means.

Make no mistake, the main reason our economy is in the state of affairs it is today, is because the American people don’t understand how to make and follow a budget. Without the mass foreclosures, mortgage backed securities would still be worth something on the stock market, banks would still be able to continue trading them to free up capital to lend more, small businesses would still be able to take out temporary loans to make payroll,  the DOW wouldn’t be in the tank, and people would still have their jobs.

This crisis was a chain reaction, no, a wild fire, that had many different agents and components stoking it, but the area of origin can be found if you walk into your bathroom and look into the mirror. America got greedy and now we are paying for it. Maybe instead of expecting politicians to fix the economy with bailouts, subsidies, and other handouts, people like Ashland should start by taking out their checkbook and trying to balance it for a change.

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