Barak Obama, showing himself ever the intellectual lightweight, calls the sub-prime mortgage lenders criminals
and says we need new laws to keep them from “hoodwinking” people into loans they can’t afford (via memeorandum).
I have two questions for Obama before we launch ourselves into an orgy of new legislation.
1) What laws have these lenders broken and, if they’ve broken no laws (which, I can only assume, is why you want new laws passed), on what grounds do you call them “criminals”?
2) What prevented anyone who is now a “victim” of a mortgage they can’t afford from actually reading the contract they were about to sign? As a follow-up, what other contracts are you willing to let people escape if they find that they can’t fulfill their end of the bargain they made?
Senator Obama, if he has a brain in his head, knows he’s full of bunk. The problem here isn’t really so-called “predatory lending”. The problems are greed, laziness, and more greed.
Folks who are getting burned by these sub-prime mortgages fall predominantly into one of three categories. First are the folks who bought far more house than they could afford. These folks are the same folks who have nearly maxed out their credit cards and, despite earning a pretty good living, always seem to be a paycheck away from complete financial ruin. They always seem to be driving the biggest, most expensive cars, wouldn’t be caught dead wearing anything but name-brand clothes, and who just bought themselves a big ol’ plasma-screen TV because football season’s just around the bend.
Second we have the folks who simply didn’t bother to do the basic homework necessary to understand the thirty-year obligation into which they were getting themselves. I see these folks all the time complaining about how they didn’t understand the department store’s merchandise return policy that said “No receipt, no return”. If you asked them what an Adjustable Rate Mortgage is, they’d look at you like the RCA dog. If you asked them if they asked their lending agent to explain the mortgage to them in detail until all their questions were answered, they’d cock their head the other way with equal confusion.
Lastly come the folks who thought they’d make a quick buck on a booming housing market. They snagged their house confident that they could sell it in a couple years and make six figures on it before the rate jumped up and bit them. They gambled on making a quick buck and now they’re looking as a seriously sagging housing market and a mortgage they knew they couldn’t afford from the beginning.
I don’t feel the need to bail any of these folks out. I don’t see where it’s my obligation to have to pay to get them out of a jam they got into because they gave into some base instinct. After all, it’s not as if I would have gotten a share of the score had they sold the house for a big profit. I can’t go over to one of their houses and bunk down for a couple of nights. I can’t share in their success, so I’m not inclined even a little bit to mitigate their failure.
The fault here doesn’t lie with the mortgage lenders. They run a business and their goal is very transparent: make as much money as possible. They don’t have an obligation to be humanitarian in their practices – to care about whether you do well in your dealings with them. Capitalism is not criminal; not yet at least. If we decide that it’s going to be, I’d appreciate a bit of a heads-up before hand. I’ll want to make sure I’m one of the thieving Commisars who’ll live in luxury while you proles are standing in line for toilet paper and a shriveled head of cabbage. I’ll be sure to tell Senator Obama hello for you, since there’s no way in the world he’s going to let one of you smelly starving peasants anywhere near his dacha.
Until then, though, by all means buy into his brainless class warfare. It’ll make the confiscations easier when they come.