Greed

The cacophony from McCain, Obama, and Congressional Democrats running from their culpability, blaming our fiscal crisis on greed is thoroughly nauseating.   Beyond redundant, it’s childish, it’s condescending, and ultimately moronic.   It makes one wonder if either of our presidential candidates has any knowledge of history or our Founders state of mind in constructing our Constitution.   Perhaps they are much smarter and devious than they appear having schooled themselves by Adolf Hitler’s Guide to Propaganda.   Or perhaps they are just willing to promulgate populist expectation because it is easier than leading.

Complaining that greed caused our financial meltdown is like complaining gravity knocked down the World Trade Center.   Greed, like gravity exists.   The goal of engineers, those designing our skyscrapers and those designing our monetary policy is the same; don’t let nature’s intrinsic characteristics knock down our buildings or destroy our banks.

The World Trade Center designers actually did a pretty good job, those towers were quite sturdy and it was nearly impossible to anticipate what huge airliners would inhabit the sky thirty years later piloted by religious fanatics on a Kamikaze mission to trade their lives for American citizens’.  

If only our politicians were as bright.   All they had to do was anticipate, Hmm, if I give this unemployed loser a home mortgage for more than a property’s worth so he can pocket a quick thirty grand, will he make expeditious monthly payments?  

As my kid would say, daaaa!

Without a doubt this bank fiasco has been fueled by greed, but where does that evil characteristic reside?   With politicians who received generous donations to block regulatory control over government sponsored institutions; with mortgage borrowers who could actually pocket cash and stay in a house rent free for months on end while the meltdown distracted banks from evicting them, with chief executives who would boost their yearly bonuses by pushing out as much bad paper as possible assured the federal government would cover them, or with a president bragging home ownership has risen to the highest level in our country’s history?

With all this greed running around you would think presidential candidates would be embarrassed to even mention it, but instead their rejoinder, You all have been greedy, but just trust me, I will be greed free!

Good campaign slogan.   I wonder if James Madison would have liked it?

Ambition must be made to counteract ambition.  The interest of the man must be connected with the constitutional rights of the place.  It may be a reflection on human nature, that such devices should be necessary to control the abuses of government.  But what is government itself, but the greatest of all reflections on human nature?  If men were angels, no government would be necessary.  If angels were to govern men, neither external nor internal controls on government would be necessary.  In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.

From Federalist No. 51

Do we not reap what we sew?   We want our government to provide us with all?   Do we expect that all can be provided without breaking down the moral barriers which oblige government to control itself ?

The difference between men of our Founding generation and men of our current generation is those men knew that gravity makes stuff fall down and they endeavored to control that reality instead of whine about nature’s law.

 

Copyright 2008 Jim Pontillo

15 thoughts on “Greed

  1. This needs to be driven home from now through, AND beyond this election cycle.

    I fear we may have further troubles if we lose the houses more completely to the leftists and populists.

    Going to add your site to my own blog roll.

  2. You mean, all the politicians had to do was…gulp…regulate the economy?

    noooOOOOOOOOOOOO

  3. No Crumb,

    That’s not what I mean. You need to learn how to read.

    The politician’s meddling and regulation is what caused this mess.

    When politicians take bribes and when CEO’s lie on their financial statements throw them in jail. Then let the free market work and we would never be in this mess.

    “Regulators” forced bad loans onto our financial system because they wanted everyone to have a house.

    Fannie Mae CEO’s lied on their financial records just like Ken Lay did at Enron. When are we going to prosecute Barney Frank, and Chris Dodd, and Franklin Raines?

  4. “Without a doubt this bank fiasco has been fueled by greed, but where does that evil characteristic reside? With politicians who received generous donations to block regulatory control over government sponsored institutions;”

    So the problem is that politicians were blocking regulation. But, regulation was the problem!

    And still you say that regulation [I think you mean the constitution] caused this because the government banned redlining, which was explicitly a policy that denied loans to blacks because they were black, not because they had poor credit and were unreliable.

    And there’s a difference between poor and uncreditable! Before this “regulation” [actually it was banning a practice that defied the preamble of the Declaration of independence but let’s not worry about little details like basic rights] went into effect, the banks WERE lending money to the poor… poor whites, that is!

  5. No dumbass,

    The politicians forced banks to give bad loans. Black, white, green, had nothing to do with it.

    Poor, unable to pay, that was the “regulatory” control Democrats demanded.

    Simple as that. Fannie Mae and Freddy Mac CEO’s used the exact same accounting principles as Enron, except Enron’s Ken Lay only lost a few billion, and since he wasn’t paying off any politicians he got sentenced to prison.

  6. My frustration with McCains inability to help himself by NOT pounding home the point about Obamas’, Dodds’, and Franks’, complicity with Fannie and Freddie financially and the conflicts of interest thereof, when there is so much low hanging fruit to pick there, is starting to wane as I realise how stupid I’ve been all along to even consider these issues, let alone ponder them intelligently and tailor my vote accordingly.
    With ACORN spitting out thousands of fraudulent registrations, the democrats have this election all sewn up!
    My one piddley little honest vote means nothing.

    Obviously I’m on the wrong team here.
    Maybe like Mussolini I should just align myself with what appears to be the winning side……yeah, that should have a sunny outcome.
    Of course that would hinge on my aquiring a large ill-fitting oompa loompa hat to properly accentuate the peanut shape of my cranium (those small details are important when your corpse is being urinated on and kicked down the street in a public display of affection)

    Yup, those ACORNers sure put that Obama funding to good use – oh, those creative little fraudsters!…they’re so cute!!
    I’m gonna throw in with them because they’re WINNERS!

    I’ve been wrong about Obama all this time.
    Apparently he IS for change, he’s changed the way we vote. No small task.

    Is there nothing this guy can’t do?

    Yo, Bama…..you da man!!

  7. So do we want to regulate or not? It would seem Jim is OK with regulation so long as it’s not by politicians.

  8. They’re not going to prosecute Barney Frank, Franklin Raines, et al, because the dems are in control of congress and they will protect their own.

    I just found this blog and I was curious as to why ‘kountry’ is spelled with a ‘k’? or what fmk stands for?

  9. Now, what legislation could you be referring to? This, perhaps?

    “But in 1997, Congress, under the urging of President Clinton, put in place an unsound taxation policy that encouraged speculation in the housing market. Anyone who had lived in a house for 2 years of the past 5 years could sell the house tax free. The new policy encouraged people to gamble on real estate. If they saw that houses were going up in price, they would buy in hopes of getting a taxfree capital gain. The result was what economists call a “bubble” during which house prices rose way beyond their rental values.”

    No, that doesn’t mention anything about Fannie Mae buying poor people’s mortgages. Maybe this is what offended you?

    “The 1992 Federal Housing Enterprises Financial Safety and Soundness Act has also been helpful in this regard, by requiring government-sponsored credit agencies (Fannie Mae and Freddie Mac) to purchase more mortgages that banks issue in minority neighborhoods.”

    So… the government forced those banks to actively oppose redlining and racial discrimination, and to buy LOANS THAT HAD ALREADY BEEN ISSUED BY OTHER BANKS TO CREDITABLE MINORITIES.

    Really, what is your problem with all of this? That banks thought minorities could carry and repay debt before the Clinton years?

  10. Crumb,

    No problem with giving minorities loans.

    Problem giving loans to people who won’t pay them back.

    Quit shifting the focus. Fannie Mae and Freddy Mac may have encouraged loans to minorities, no problem. But Fannie Mae and Freddy Mac demanded loans be given to people (many were minorities) who demonstrated no ability to pay them back. That’s not an error of capitalism it’s an error of socialism.

    That’s what caused the meltdown.

  11. So, let’s review.

    Jim: Regulators force banks to give loans to people with poor credit!

    What regulation forces them to do that? Perhaps in an imaginary dystopia the government can make it illegal to make good business decisions, but certainly not America. You refuse to provide any evidence of this regulation, insisting that it exists simply because you say it does. You equate poor with uncreditable, when that has never been the case.

    DE-regulation of the housing market and looser taxation encouraged people to buy and sell properties willy-nilly. This deregulation was passed by a Republican congress under Clinton. It encouraged the housing bubble, which in turn encouraged mortgage brokers to offer subprime mortgages to uncreditable people in order to profit from the commissions. Banks have also been increasingly willing to offer lines of credit, loans, credit cards etc to those who did not qualify under previous standards.

    Jim: The government needs to regulate these banks! But corrupt employees of Fannie Mae and Freddie Mac bribed the politicians to block regulation!

    You blame the present crisis on regulation that does not exist, and then say that the banks should be regulated even more; that the reason the crisis happened is that there was not enough regulation.

    You also blame greedy bankers for bribing politicians into blocking regulation. If you are right, and there is regulation that forces banks to make intentionally awful business decisions, then why would the bankers force Congress to block regulation that would allow them to make good business decisions again? It just doesn’t make sense. Either the banks were not bribing congress, or they are not being forced by law to make bad business moves. Given that there is actual evidence for the bribery, it seems we should reject this imaginary bad business regulation. Which means the banks must have been just greedy.

  12. The preliminary conclusion is that deregulation and the free market failed in this case due to extraordinary greed and short-sightedness, and triggered a pretty awful financial crisis. This sounds almost like… like… the stock market boom and bust of 1929! I guess history does repeat itself!

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