Was reading this on Fox News tonight, and it just seems wrong to me. Some of the ideas being floated are good, but not all of them. Let me say up front that I don’t like the bailout idea, but if you’re going to do it at least have some sense about it.
[Rep. Barney Frank] said the bill will not provide “golden parachutes,” or loaded compensation packages, for executives who lost money for their firms.
This is a great idea. They ran those firms into the ground, so they should not be compensated with my money for doing it.
[Senator Christopher] Dodd said he has great faith in [Treasury Secretary Henry] Paulson, a former Goldman-Sachs CEO, to deal with the crisis. However, he said a legislative relief package also should be tailored to protect taxpayers in the best way possible.
He said they should be “first in line” to get money back once conditions in the industry stabilize and recover.
Again, this is a pretty good idea. It won’t happen, and it’s just pandering to voters, but it’s a good idea. We’ll never see a dime of this money back. Not a dime.
Frank agreed that more should be set aside for homeowners who have been unable to keep up with payments once their subprime adjustable rate mortgages spiked.
And there’s where they lost me. I’m sorry, but the people who signed up for these mortgages should have known what they were getting into. When we bought our house in 2004, the mortgage company gave us three choices: a fixed rate, 20 year mortgage; an adjustable rate 15 year mortgage; or an adjustable rate 30 year mortgage. It was a pretty simple decision. The fixed rate was the best because I knew what my mortgage was going to be for the next 20 years. I didn’t have to hope that the economy stayed good so my payment wouldn’t go up. Just like the banks should have shown some restraint in the number of bad credit mortgages they issued, people should have had some smarts about the kinds of mortgages they were seeking.
“The private sector got us into this mess,” Frank said, “The government has to get us out of it. We do want to do it carefully.”
Wow. Tell us how you really feel about non-governmental entities why don’t you? Big government doesn’t have to do anything. They should do as little as possible and stay out of the way.
Congressional leaders have endorsed the main thrust of the administration plan, but also have said that it must be expanded to include help for people on Main Street as well as the big Wall Street financial firms who have lost billions of dollars through their bad investment decisions.
Why should we help them out with their bad investment decisions? If I sink all my money into a widget company and they lose their shirt, I lose all my money. That’s why it is an investment. It isn’t guaranteed to always be positive.
This could get very ugly in the next few months. Neither presidential candidate will get us out of this mess quickly or painlessly. It’s times like these we have to remember Matthew 6:19-21:
“Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.
So, where is your treasure? Here on earth, tied up in the federal banking system? Or is it in heaven, where we actually will be able to enjoy it forever?
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“The private sector got us into this mess,” Frank said, “The government has to get us out of it. We do want to do it carefully.”
I’m pretty sure that it was the government that got us into this. Can’t find the reference right but I am pretty sure that banks/lenders were required to make a certain amount of loans that were, by definition, risky. So no, Mr. Frank, you can’t have it both ways.
PS. There, I’ve commented on your blog.
Hey, thanks for the comment (finally).
I agree. I was reading more about this last night and it’s the government stepping in and messing things up.