Freddie and Fannie have both been around for decades doing what they were designed to do and nothing blew up.
You're right, that is until they started proposing to banks that they were a quasi governmental backer of loans. Fannie and Freddie were pushed beyond their charter by crooks like Franklin Raines who BTW, got his $90 mill and disappeared didn't he.....
And you don't think people would have spent beyond their means before now if they could have?!? (Do you believe adultery and abortion didn't happen in the 50's, too?) People are people, they don't change overnight without a major change in their environment. What changed in their environment that allowed this wild ride of empty credit?
My father was a small business owner in the 50s, built his house cash, carried one credit card his whole life, and lifted a nickel like it was a man hole cover. He tried to teach me the value of money, him growing up through the great depression and all, but being hard headed I had to learn for myself.
What changed was the ease, and availability of credit, and the thought process of people getting this credit counting it as income, instead of something that should only be used in cases of emergency.
Didn't their lenders understand what was going on? Or were the lenders too interested in today's profit to care about tomorrow?
Well, I am no banker, just a trucker with I'd like to think some common sense. But, IMHO, I'd have to say with the advent of the switch from a manufacturing based economy to a service one. When that started happening, the days of relatively stable incomes, with reasonable priced starter homes disappeared. People were either in upper middle class income levels with McMansions, or lower middle class, with 25 year old houses that needed work. Savings levels dropped, and credit spending rose. That was and remains a recipe for disaster, even worse than that which we just went through.
Now, if you want to argue that the short-term profit policy isn't the fault of the CEO's then we may have something to discuss since stockholders set the bar, so to speak. I can't blame the CEO's 100% because they seldom write their own job description. But Job Average doesn't write it, either.
Well, I think that profit motive in business hasn't changed much, and shareholders demand more since more average people are invested since the death of the company pension, replaced by the 401K. I struggle sometimes because it seems that mediocrity is the reward hurdle for CEO standard today. It seems to be more about not killing the company in leiu of actually growing the company, and producing success.
Go back and read the sub-discussion between Gimmesometruth and Harry Guerrilla. I'm not going to open up another sub-discussion on the same basic topic.
I have been keeping up. But if you want to stick to the main topic then that is fine as well...Allow me to throw this out there...Last night I heard a discussion that up to 150 million people in this country were on some sort of government aid, food stamps, disability, etc...And according to PEW, disability out flow will rise from 13% average, to over 18% average by 2030, and you have Giethner out there not trying to work with the other side of the isle, but rather taking cheap shots, mouth foaming talking point blather about Ryan's plan when demo's don't even have a budget for God's sake.
Now, you tell me where Obama, and libs want to take this country?
j-mac
