Sunday, April 06, 2008

That Sound You Hear...

That sound you here is a thousand lives devastated; The end of the American Dream for many; The postponement of numerous retirements.

I'm not surprised at all. I've been talking about the insane housing prices in NJ for years.

Houses can't increase in value by 10% every year especially when salaries have not kept pace with inflation. These are after all dwellings, which are a necessity in this society. Once you make a necessity not affordable, the system is going to break down. Someone is going to pay and God forbid it would be the people who caused this mess.

As we speak our tax dollars are being used to reward companies (Wall Street Investors, Mortgage Bankers, CEOs, Home Builders, etc...) for their crappy business plans. Sure it will save jobs, but it doesn't address the real problem. Housing in America is no longer affordable. People are taking on too much debt to be able to live in a decent house.

This bailout is the equivalent of giving a crack head $200 after he got caught stealing car radios. Sure the crack head may not steal car radios for a few hours, but he is still addicted to crack.

The Federal Government has been rather quiet about the real issue. They won't even talk about investigating these shady mortgage deals.

How is it even legal to give a $400,000 mortgage to someone who makes below $55,000 at teaser rate of 2.5% with 2% down? Yet it happened and it happened often.

Perhaps the borrower didn't consider that the loan would reset to a higher rate. Perhaps they are never understood interest rates or rambling legal work.

Stupidity lies on both sides of the aisle, but honestly who green-lighted this? It's irresponsible to kill our economy for the sake of making record profits.

Then again our government works to the benefit of corporations in it's pursuit of power so the situation is completely understandable.

Regardless, we the people are screwed. Our economy is in a nose dive. People are either out of work or on the verge of losing their jobs. Meanwhile home owners are watching the value of their homes drop to pre-bubble (2001-2002) prices.

This could be painful, but we will survive.

Companies exist for the sole purpose of making profits. We can not trust corporations to do what is in the best interest of their customers. Without stricter business regulations and greater transparency this will happen again.


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