This certainly is not intended to praise the banks as it was their greed that contributed to the failure of our current economy. That combined with a Republican administration, that removed all restrictions on the banks to loan money.
There has been many complaints about the OBama administration being concerned about Wall Street because they bailed out the lending institutions that created the problems in the first place. I understand that anger. What do you do, though, when you did not create the problem and now must fix it?
As much as we like to hate the banks, the unfortunate truth is, without them being solvent, we cannot be solvent. They hold the keys to our cars, homes and jobs. Businesses often run on credit granted by banks, as does the agricultural sector of our Country. The intra-structure of our Country is dependent on the solvency of our banks. Factories, department stores, Mom and Pop businesses, Corporations, at some point or time, will almost always need to borrow money, in order to continue operating and provide us with our jobs,and the means to provide a roof over our heads and food in our stomachs.
This is being simplified in the simplest of terms and I am deliberately not getting into the BIG problems that led to the failure of our economy,as I am not sure myself to how deep the problems do run. I do know, though, to get to where we have gotten, we all understand, or should, understand that greed had a great deal to do with it, and that there was a plenty of blame to pass around.
The greed does not belong on Wall Street, alone and I think most of us understand that. The people that knew they could not own a home but somehow felt co-erced into buying one anyway, like we all don’t know what we can afford, regardless of who is telling us differently, allowed greed to over-ride common sense.
I must point out here, though, my amazement, that people that own homes, that do not know when they take out a equity loan or a home improvement loan, that they are actually taking out a second mortgage. Regardless of what the loan is called, DO NOT EVER borrow money on your homes EVER. To do so, we only make ourselves more vulnerable for foreclosure. If we miss a house payment or two, even for health reasons, we are ten times more likely to face forclosure with a second or third mortgage, on our homes than we are if we leave the equity in our homes. I do believe these people, in most cases, were ignorant of the facts, even though they played a large role in the failure of our economy. Banks do sometimes, encourage these loans. It is still our responsibility to be aware of the problems, that can and do lead to the loss of our homes.
The people that failed to make the house payments, in lieu of doing or buying something that they would rather have or go someplace they would rather go, the people that filed bankruptsy for the same reasons, the people that said, “If the credit card Company is stupid enough to send me a credit card, I’d be stupid not to take it, the people that cashed in 401k’s knowing full well that they would have a tax liability and spent the money, before paying the taxes, people that ran debt so high.” shopping until they dropped”, only to go to debt consolidators to help pass on their extravagance to the rest of us consummers, also must take part of the blame for their greed.
Simply put people that ignored the amount or lack of cash they had, and spent according to their wants, strictly on credit and then passed their own greed on to the rest of us that are fiscally responsible, are as much to blame for their greed as Wall Street is for theirs. It is just on a smaller scale, individually, but when grouped together it makes a BIG difference in the interest rates we all pay, as well as the consumer goods we buy, since many stores have their own charge cards.
Getting back to where I started then, where would your common sense, tell you that in order to make the Country solvent again, where would you start? As a new President , that did not create the problem, I am afraid if it was me, I could only think as Obama did and say the obvious, as well as do the obvious.
Regardless of how we got here, if we do not help make the banks solvent again, we cannot stay off the bleed of job lost and the further falling of our economy. We do not need Economy 101 to understand, that has to be the first step, no matter how much it sickens us, to do so.