Wednesday, September 24, 2008

Wednesday's Words for September 24, 2008

Before I was privileged to spend my days at home writing essays and stories, I worked for more than twenty years in the field of accounting. So numbers and finance, to some small extent, are no strangers to me. That said, I don’t fully understand the financial crisis that has befallen the stock market this past week.

And I have to wonder what is worse: the actual crisis, or the government’s reaction to it.
I’m a simple woman, with a fairly simple view of most things. The lessons I learned in childhood, however, haven’t really helped me to understand life in this modern era. Because one of the most important lessons—if the amount of time my mother spent cramming it into my head is any measure—was that if you make a mess, you clean it up.

I don’t see that happening here.

These are large corporations run by those who have been considered among the most financially astute in the country; the companies they control are worth billions, and they themselves, I am quite certain, don’t eat tuna casserole. Whether through greed, or poor judgement, or both, these individuals have, by their actions, precipitated this crisis.

When ordinary folk began to lose their homes a few months back, everyone seemed to cry about it but there was no great call to arms. Now the portfolios of multi-millionaires are taking a hit, and something needs to be done!

Yes, I know it’s more complicated than that. But I believe in the concept of personal responsibility. I am where I am today as a direct result of every decision I have ever made, and so are you, and so are they.

How did this mess all start? Lenders giving mortgages to people who really never should have received them in the first place. That sounds harsh, I know, but it’s true. And this was done, not due to a wave of corporate altruism, but out of pure, unadulterated greed.

People whose cherished dream was home ownership were given a taste of that dream before they were truly ready for it, and then had it yanked away from them; so they are one group of victims of this corporate greed. The failure of so many mortgages in the face of the rising cost of living created more rising costs in credit, jacking rates up for many who were prior to this managing their bills; so they are another group of victims of the same corporate greed.

Now the federal government of the United States is going to bail out these greedy lenders using your tax dollars, thus making the American taxpayer the third group to have to pay as a result of that same corporate greed. And I’m not even going to mention that other group of pirates in businessmen’s clothing, the oil companies. They and those who make their fortunes in the oil speculation/futures market have driven the price of fuel so high that many people are going to be in very desperate straits this winter.

I suppose the thing that galls me the most, personally, is that the people who are crying for the Federal Government to step in and rescue them from the consequences of their own bad judgement are the same people who scream bloody murder if that same government even thinks about helping out the average citizen on Main Street by introducing regulations to control gouging at the pumps, and elsewhere.

I understand the concept of “laissez-faire” economics; but those people who believe in, espouse and practice this principle ought to learn another one: you can’t have it both ways.

Coming October 2, 2008
The Song of the Sirens 1: The Seductress

1 comment:

Melodee Aaron said...

Morgan, I think you've hit the nail on the head, but there is another side to this...

Those who took out the bad mortgages are also blame. If they didn't understand the contract and the fact that in X years their payments would shoot up have a good deal of culpability as well. Failing to either read or understand what you are signing is no more of an excuse than being greedy.

There is plenty of blame to go around.

That said, government intervention is never the answer. Running a huge bailout or limiting executive pay won't solve the problem.

Laissez-faire actually is the answer, no matter how unpleasant the solution will be. Without the natural selection that non-interference brings, we will keep making the same mistakes over and over again.

Another component of the long-term answer is for the public to exercise the power that we hold. I hear people fuss about things that companies do every day, but they keep shopping there. Why? I can assure you that if everyone who didn't like something that, say, Wal Mart does started shopping at Target, Wal Mart would change in a heartbeat.

Ditto for brokerage firms. Ditto for mortgage lenders. Ditto for gas stations and oil companies.

Oh, and ditto for government.

We hold the power, but we fail to use it. The why is pretty simple, too...

It's not my fault. Someone else is to blame. I have no responsibility for my actions.

Sound familiar?

Keep Loving!