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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (126894)	12/10/2009 7:38:30 PM
From: Mary Cluney	Read Replies (2) \| Respond to of 541791

<<<There is no such thing as personal responsibility. It is obvious that the banks held a gun to all those people's heads and told them to take out zero down ARM loans on homes that they could never hope to afford.>>> Yes you have responsibilities to yourself, to your family, and to your community. You can not go into a bank with a gun and demand money. You can not spend money you don't have but you are allowed to spend money banks lend to you. You cannot provide false information to get a loan. Banks on the other hand have the primary responsibility for lending money. They can not go about spending borrowed money recklessly. They can not take borrowed money and use 40 to 1 leverage to make bets that they can not pay back when the bet goes sour. They can not make loans to people who can not pay them back. Banks have their responsibilities and people have their responsibilities. Banks business is to process loans and other financial matters. That is their business. That is why they have lawyers, investigators, and other highly trained employees working for them. People taking out loans normally do this once, twice, or three times in a lifetime. That is not their main business.

To: slacker711 who wrote (126894)	12/11/2009 5:29:20 AM
From: Cogito	Respond to of 541791

>>Personally, I understand those who apportion most of the blame to the banks. However, to take the position that consumers had nothing to do with the bubble just blows my mind. I am usually pretty good at seeing the other side of an argument, but I honestly cannot comprehend that point of view.<< Slacker - Yes, of course people should take responsibility for their own actions. People who take loans out when they can't reasonably expect to repay them should lose their homes. And they have. However, if the banks hadn't leveraged themselves beyond any reasonable level, and if they hadn't then securitized all the loans and created even greater leverage, there would never have been a major problem. A relatively small number of mortgage holders have defaulted, and the banks should have had sufficient reserves to deal with them. Nobody held a gun to AIG's head and forced them to insure hundreds of billions of dollars worth of credit without setting aside one dollar on the off chance that some percentage of the underlying loans would go bad. And AIG is just one example. Blaming home buyers for the economic collapse is not a case of blaming the victim. It's just a case of blaming the wrong people. - Allen