Friday, March 28, 2008

Why I might be able to vote for McCain

I have to admit, I haven't been that jazzed about the Republican nominee so far. I'm not that impressed with his work experience (non-existent), his personal life (a divorce and a youthful daliance with a stripper), and his age (the man is at death's offense to my spry grandparents who are also in their 70s, but also choose to stick to golf and tennis and not Iraq-Iran foreign policy.

However, I was pleasantly suprised by the tough stance he has taken on the-sub prime mortgage crisis, advising the Dems to calm down about throwing money to people who have proven their inability to make wise fiscal decisions when overcome by large dollar signs. I don't want to sound harsh on people who are probably feeling a big sting right now, they might be losing their jobs, their companies or their homes, but the government surely didn't make this problem (that is right--you can't blame the "man" for everything) and I am not so sure the government needs to fix it by throwing money at it.

As McCain summed up, “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates,” he said. Later he added that “any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren’t.”

The lenders definitely have some blame, they bought and sold those mortgages without thinking that maybe, just maybe something SUB-prime, might be a bargain deal because it has a unreliable cash flow and just maybe, won't actually materialize into any form of currency. Poo on you for speculating on mortgages taken out under risky terms and inflated values.

But poo on homeowners who buy big-A houses that they can't afford, trying to refinance or even take out the entire loan their bank is willing to offer them. It isn't a bank's job to decide what you can and can't afford really, who is the one in debt? Who is the one who needs to pay attention because they have a $500,000 or $800,000 cloud following them around and have no one to blame but themselves? Yeah, real estate values have risen astronomically in California, in Florida, in tons of hot pockets all over the country--but you didn't think it would always be that way, surely?

Did anyone take an economics class ever? Really people! Everything is in cycles, use caution and moderation. You don't buy the biggest McMansion the bank is willing to give you if you can't afford it under normal market conditions. How could you make the biggest spending decision of your life, gambling that the market would catch up to you time to make your payments?

So, that is my rant about this. It is unfortunate that it will have ripple effects on the rest of the economy. Whether we will go into recession, I am not so doomsday as finanical reporters with beats due and nothing else to write about-- I think we will be fine overall. And look, there is always a silver lining to cycles, crazy house prices will start to come down, because shock, the market isn't willing to pay $999,999 for a 2 bedroom, one bath 1,300 s. ft house in just won't. So, some people will be able to buy houses now that haven't been able to in the past few years. I can only hope that prices level out long enough for the boy and me to afford a house someday!


TiAnn, Paul, & Kalispell Finn said...

I enjoyed your rant Britwad, keep them coming. If you had a column (which you very well should), I would be an avid reader/fan. Some great common sense that many could afford to take a big bite of.

Maggie said...

I totally agree with what you are saying. Lately, in the discussion about health care, I have voiced the same concerns...when do people become responsible for themselves? The housing market crisis is the same. As the news here in Utah has shown the situations people have gotten themselves into with their mortgages, all it convinces me of is that people made poor choices hoping for some good luck. Keep up the opinions. I thoroughly enjoy them!

Lari said...

The sad thing is, a lot of these people haven't taken an economics class. A lot of these people don't have a great education. I'm not trying to make an excuse, and I don't believe in government bailouts, but at the same time, there is a problem, and I don't believe completely ignoring the issue will solve the problem. I don't thing throwing money at people is the answer, but I believe they need to be educated about what kinds of loans they are getting into. I think both the banks and those who took loans they couldn't afford share some responsibility... yes people should be responsible for themselves, but they should also fully understand the fine print and their economic position (that's the lender's job).

Lari said...

By the way... I wrote "thing" when I meant to write "think." I can't fix it. :P

The Erickson's said...

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