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How did the Western world reach this point? Well, as my correspondent put it, we assumed that we were rich enough that we could afford to be stupid.

I confess, I fell prey to this kind of thinking. Back in 2003-2004, when I was a mortgage loan officer for Countrywide Home Loans, I witnessed the torrent of new mortgage product issued by FannieMae and FreddieMac, and I wondered, "Are we so well-off, as a nation, that we can now afford to abandon century-old standards for lending?"

1 posted on 05/30/2010 6:00:25 AM PDT by GVnana
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To: GVnana
Two years later, we’re a lot less rich.

Actually, we weren't that rich then. We just had the delusion of wealth that is created during the short-lived period while we were maxing out our credit cards.

2 posted on 05/30/2010 6:03:28 AM PDT by Sherman Logan (When buying and selling are legislated, the first things to be bought and sold are legislators.)
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To: GVnana

That was an intentional part of the “redistribution” plan of communists and “progressives.” They knew the borrowers would not be able to pay the mortgages. They knew they could use the argument, “we can’t throw people out of their homes” successfully. They knew the country would bail out the borrowers (and the lenders) at the expense of those who are a lot less selfish and who manage their own finances responsibly.

Remember folks, it is no longer “redistribution of wealth.”

They are now taking from those who are just getting by in order to buy votes from the parasite class.

It is now “redistribution of earnings.”


3 posted on 05/30/2010 6:19:35 AM PDT by Ghost of Philip Marlowe (Prepare for survival.)
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To: GVnana

I wonder if I would have qualified for my first home loan had those time-honored standards to ensure risk is shared equitably between lender and lendee had been in place. I certainly would not have been able to gather 20% before home prices went on their precipitous rise.

Of course, those lending practices and the housing bubble are not independent events, and I didn’t overbuy. Despite being out of work for a year, I’m still here and have never missed a payment.

Fiscal prudence is simply something lost on this generation, and it’ll take a 21st century Greek tragedy on our shores to make people understand that the “worst economy since the Great Depression” will involve hardships beyond scaling back from Applebee’s to Mickey D’s.


4 posted on 05/30/2010 6:30:04 AM PDT by Dr.Deth
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To: GVnana

Once again, Steyn nails it. Sadly, this stupidity is not the exclusive disease of overt liberals. Remember “compassionate conservatism” and “a kinder and gentler nation”?

Perhaps staring national poverty in the face will force us to examine how and why our nation became so wealthy. It was not because of liberalism or any other variety of stupidity. Rather, our wealth as a nation was built on Christian values, hard work, intelligence and a sound constitution.


5 posted on 05/30/2010 6:56:05 AM PDT by TheConservativeBanker
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To: GVnana

Excellent title...bkmking for later


6 posted on 05/30/2010 6:56:55 AM PDT by riri
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To: GVnana

Well, Countrywide was making a fortune writing “toilet paper”, so I shorted them in 06, along with WAMU, and several others.


7 posted on 05/30/2010 7:12:44 AM PDT by stephenjohnbanker (Support our troops....and vote out the RINOS!)
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To: GVnana

Liberalism is a luxury. In the same way the hippies that protested in the 60s had plenty of jobs to chose from if they really needed to work — times were good. In bad times you worry about your next meal. With the poor it is no longer a life and death struggle in North America as it is in Africa. Your next meals are provided for. But all this is never enough to a liberal, especially a “poor” one. Despite their ipods, cell phones, money cigarettes, beer and cable... they are hard done by. Our culture shows them people like Brad Pitt and they think that they are poor in comparison to Brad and not some native in Africa. And that is such an affront to their pride. Therefore, more entitlements, more money throw at them for being the victims, more tax the evil rich. This attitude is a luxury and will drive the people who give to the poor through their taxes into the poor house.


8 posted on 05/30/2010 7:16:15 AM PDT by Blind Eye Jones
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To: GVnana
lighten up, on the grounds that “we’re rich enough to afford to be stupid.”

For years I've said the same about 'natural' and 'organic' foods, I just used the words wealthy instead of rich.

And, from the agricultural standpoint, we still are wealthy enough to spend money stupidly on 'organic' and 'natural' foods.

I hope that doesn't change, as I have friends and relatives making bundles and living high taking easy money from foolish buyers.

9 posted on 05/30/2010 7:26:48 AM PDT by Balding_Eagle (Overproduction, one of the top five worries of the American Farmer each and every year..)
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To: GVnana

Bump


10 posted on 05/30/2010 7:26:50 AM PDT by B.O. Plenty (Give war a chance...)
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To: GVnana

I want to know where the hells all this money going?

Somebody has to be on the receiving end. Four, five, six big banks? Who is holding the cash?


12 posted on 05/30/2010 8:09:40 AM PDT by crz
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To: GVnana
The social compact of the postwar era cannot hold. Across the developed world, a beleaguered middle class is beginning to understand that it’s no longer that rich. At some point, it will look at the sheer waste of government spending, the other shoe will drop, and it will decide that it no longer wishes to be that stupid.

Will it be too late by then?

24 posted on 05/30/2010 12:52:51 PM PDT by COBOL2Java (Obama is the least qualified guy in whatever room he walks into.)
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To: GVnana
It’s one of the basic rules of life: if you reward bad behaviour, you get more of it.

No need to read beyond that line. That says it all right there. You should reward good behavior (marriage, work, integrity, honor) and punish bad behavior (laziness, fraud, banks that ignore risk, people who damage their health). Of course, I did read beyond that line. I love reading Steyn. Thanks for posting.

25 posted on 05/30/2010 1:53:02 PM PDT by Freedom_Is_Not_Free (Liberal are like termites eating away our cultural foundations.)
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To: GVnana

Afro-Marxist economics, no doubt.


36 posted on 05/30/2010 9:35:42 PM PDT by Taxman (So that the beautiful pressure does not diminish!)
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