A couple thoughts on the economy
1. Many people seem to feel that the President's plan to address the rising tide of home foreclosures is unfair because it rewards people who have made irresponsible decisions. In an abstract sense, I see their point. However, in practical terms, I don't see that we have much choice. Foreclosures lead to an endless spiral where more foreclosures cause property values to keep dropping across the board which in turn leads to more foreclosures. Whole neighborhoods can and are being ruined this way.
The logic of moral hazard says that people should not be rewarded for bad behavior because that would not be fair to the people who have lived within their means and have made their mortgage payments on time. But the situation is not as cut and dried as that. Too many foreclosures will cause property values to drop even for people who have paid their bills on time--and could even push some of these people into foreclosure as well.
Yes, some people will benefit from irresponsible behavior under the President's plan and that is unfortunate--just as it is unfortunate that many irresponsible corporate leaders are benefiting for other federal bailout programs. But faced with a series of bad choices, I think the President's plan is not as bad as the alternatives.
2. Wall Street is worried about the possibility of nationalizing the banks. But, again looking at practical terms, that may have to be done. Banks have been run recklessly and irresponsibly for years and they still do not seem to be coming clean about the extent of the damage from the worthless assets on their books. The government may have to step in to at least open up the books and provide a full account of just how bad the damage is so that we can begin to move on. And when the banks are once again privatized, the government should completely overhaul the regulatory system along the lines of the Canadian model so greedy bankers can't push us off another cliff in the future.
Yes, these measures are drastic. But the alternative is a continued slide into a deep dark abyss of a complete financial collapse. In the opinion of well-known international investor George Soros, this is an abyss that may not have a bottom.
Random thought #1: Crooked investor Sir Allen Stanford, whom the SEC says may have defrauded investors of as much as $8 billion might end up getting exactly what is coming to him. According to the FBI, it's possible that Sir Allen was laundering money for Mexican drug cartels--people who tend to not take it lightly when they are cheated.
Random thought #2: Are my left-wing credentials being tainted by the fact that I am actually starting to like Canadian Prime Minister Stephen Harper? In my defense, he is far from being an American-style conservative. After all, he even lectured President Obama about the reckless disregard of climate change and other issues under the last 8 years of the Bush dictatorship and stated very clearly that he would be watching closely to see signs of change from the new U.S. administration.
The logic of moral hazard says that people should not be rewarded for bad behavior because that would not be fair to the people who have lived within their means and have made their mortgage payments on time. But the situation is not as cut and dried as that. Too many foreclosures will cause property values to drop even for people who have paid their bills on time--and could even push some of these people into foreclosure as well.
Yes, some people will benefit from irresponsible behavior under the President's plan and that is unfortunate--just as it is unfortunate that many irresponsible corporate leaders are benefiting for other federal bailout programs. But faced with a series of bad choices, I think the President's plan is not as bad as the alternatives.
2. Wall Street is worried about the possibility of nationalizing the banks. But, again looking at practical terms, that may have to be done. Banks have been run recklessly and irresponsibly for years and they still do not seem to be coming clean about the extent of the damage from the worthless assets on their books. The government may have to step in to at least open up the books and provide a full account of just how bad the damage is so that we can begin to move on. And when the banks are once again privatized, the government should completely overhaul the regulatory system along the lines of the Canadian model so greedy bankers can't push us off another cliff in the future.
Yes, these measures are drastic. But the alternative is a continued slide into a deep dark abyss of a complete financial collapse. In the opinion of well-known international investor George Soros, this is an abyss that may not have a bottom.
Random thought #1: Crooked investor Sir Allen Stanford, whom the SEC says may have defrauded investors of as much as $8 billion might end up getting exactly what is coming to him. According to the FBI, it's possible that Sir Allen was laundering money for Mexican drug cartels--people who tend to not take it lightly when they are cheated.
Random thought #2: Are my left-wing credentials being tainted by the fact that I am actually starting to like Canadian Prime Minister Stephen Harper? In my defense, he is far from being an American-style conservative. After all, he even lectured President Obama about the reckless disregard of climate change and other issues under the last 8 years of the Bush dictatorship and stated very clearly that he would be watching closely to see signs of change from the new U.S. administration.