Wednesday, September 24, 2008

If a dummy like me.....

With all the talk of financial disaster in the news, I just have to get this off my chest.

Starting about six years ago, my wife and I used to listen to David Hall on WJR-AM radio here in Detroit on our way to church.

Mr. Hall operated and ran a company called Rock Financial and his radio show was simply one big, long advertisement for his company.

People would call in with questions about mortgages and David Hall would provide some amazing advice.

Mr. Hall would encourage people who made $40,000 to $50,000 a year to call him so he could show them how he could put them in a $400,000 luxury home (for my California readers that's a really nice house here), with no down payment and an interest only payment of $600-$700 a month.

You'll have to take my word on this, but six years ago my wife and I used to shake our heads and wonder how this could work. On one Sunday, I even offered my uneducated opinion that this whole thing "would end badly for a lot of people."

The fact that people were buying houses they couldn't afford, for mortgages they temporarily could seemed like a recipe for disaster. But what did I know, I'm just a guy who can barely balance a checkbook.

So my question is this. If a dummy like me can see this coming six years before it happened, how come all these political and financial geniuses who make a living at this apparently didn't see this coming until Monday and now they have to fix it by Friday.

And how are they going to fix it? They're going to make me pay for it. Even though I bought and paid for a house I could afford, didn't refinance my house to make a quick buck and already pay outrageous taxes, I have to help bail out companies and people who conspired to get a deal that was too good to be true. People without a dollar in the bank were allowed to buy nice homes for little money. Yeah, that's a good idea.

It makes me very mad. And I blame Republicans and I blame Democrats. They both have dirty hands in this and that's why they are eager to fashion a quick, bipartisan solution so we don't ask too many questions about how we got here. Obama and McCain are leaning on advisers who are waist deep in this sewage.

Fannie Mae and Freddie Mac bought and paid for a lot of legislators, on both sides, and now they're scrambling to cover their tracks. If one of those crooked executives get an extra buck out of this, count me out of the deal.

Ralph Nader is looking better by the moment.


Jim's brother said...

We are one of your California dreaming readers who paid for our
home with our own money down, 20%, made our payments faithfully over the years only to see the value of our house drop like a rock due to the idiocy of others. Did we not learn from the S&l crisis of 20 years ago. In the interest of fair disclosure my wife and I were both working for an S&l at the time which was owned by the Ford Motor Credit Corp.

Anonymous said...

When you have a president who runs up the biggest debt in history by basically putting a war and unsustainable tax cuts on the national "credit card," why wouldn't Americans think that they're entitled to live beyond their means with big mortgages, big car leases and big credit card balances. Now the credit bubble has burst and, yes, you and I and other responsible taxpayers are holding the bag.

Unfortunately, Ralph Nader is more interested in being a demagogue than a leader. Being "none of the above" doesn't always mean better.

Jim of L-Town said...


You asked (sort of) "why wouldn't Americans think that they they're entitled to live beyond their means..."

Maybe, because it's wrong.

My wife and I, like my brother and his wife, understand what is right and what is wrong.
I was not raised to take what didn't belong to me or that which was above my means. That meant we did without sometimes.
Living beyond your means is simply wrong. When I talk to people who tell me they got a loan for a house by fibbing (with the full knowledge of the bank) about how much they made, I really don't know how to feel a lot of sympathy for either the borrower or lender.
Remember the adage: If it's too good to be true, it probably is.

But we welcome all points of view here.

Anonymous said...

Jim: I was being sarcastic.

Jim of L-Town said...

It sounded sooooo real!

I honestly don't know what the answer is, but I know what it's not. And it's not rewarding the same rich, greedy executives who got us in this mess.