Free Lunch Loans And The Economy of Greed
December 16, 2008
Post Tags: economy of greed , free lunch loans , housing industry , real estate
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Government and the Economy of Greed
We found out the other day we have been in a recession since December of 2007. This is news? Like someone, or a bunch of someones finally pulled their heads out of the sand and realized what many Americans have known the whole time but were waiting for the “leaders” to say that it wasn’t so.
Like getting bad news about your health, you have an idea something is wrong, but feel like as long as no one says it out loud there is a chance it will go away. It isn’t going to go away on it’s own. The first step in resolving any issue in our lives is to admit there is an issue. Finally, it appears that first step has been taken. Unfortunately, we are well past the stage of early detection and now we have a patient that has been sick for some time and will require a lot of attention. No one is expecting a quick recovery.
The Patient is Strong
Carrying the health metaphor even further. Many now recognize that a positive attitude hastens recovery. Laughter and fellowship with others helps the body heal quicker. The same is true of our economy and sense of general well being in our country.
It has been said over and over the whole in the bottom of the boat started with the housing industry. I don’t believe that is entirely true. The hole in the bottom of the boat started in the financial sector providing “free lunch loans” to the buyers of real estate. The housing industry was the natural commodity of choice for lending a lot of money quickly to make a large profit in a short period of time and pass the risk on to “investors” which dressed a lot like the same “speculators” which invaded real estate markets all across the country.
The government always seems to have the same solution. Close the barn door after the horses are out and then throw money at the problem. As if throwing money will “fix” everything and then regulate, regulate, regulate.
What about the horses?
The horses being untended and unbridled in their spending have enjoyed their freedom and pushed their spending habits of “buy now and maybe pay later” to the brink of the cliff of personal destruction. The stampede of spend, spend, spend some more hasn’t just slowed it has come to an abrupt stop. It is unfortunate an entire “economy of greed” rallied and relied on a stampede of spending without concern for the actual purchase power of the plastic being used. Again, with the financial sector being mainly concerned with the interest to be charged on the spending didn’t really concern itself with the debt being retired as long as they could continue to bleed the horses being careful to keep them healthy enough to continue to spend.
The auto industry issues are another symptom of an economy of spending rather than an economy of thrift. They are like a small hole in the boat, well above the water line. It is still a hole, but the attention it gets compared to the hole in the bottom of the boat is a sign many in “leadership” don’t get it yet.
The hole in the bottom of the boat.
So how is the hole in the bottom of the boat going to be fixed. It is being fixed now. As is often the case with disease, it is there before we recognize it and often when we are the sickest the body is already fighting the disease and the symptoms we are experiencing are from the death of the disease and the body expelling the waste.
December 17th, 2008 at 8:40 am
[...] new here, you may want to subscribe to my RSS feed. Thanks for visiting!Yesterday’s post Free Lunch Loans and The Economy of Greed ended on a rather gruesome mental picture of the body expelling waste. Didn’t mean to leave [...]