Punnish those responsible

I have a story...

2 years ago, I was doing my thing... Drinking in a bar. I'm there talking to this Young Lady, and in the middle of all this she receives a phone call. She is talking to someone and trying to get them a loan for a home. During the course of the phone call she keep prompting them. "We are really close, if only you could tell me about something else you have that could help us get across the line, Maybe you have another part time job you forgot to tell me about, or a 401 K." It was clear to me she was Prompting them to lie to her. so they could qualify for the loan. I have no doubt, she doest' have a job anymore qualifying people for Loans. She is one of the "salesmen who made money loaning money to people on homes they couldn't afford, to be packaged into these MBS.

I was working on a job, and we hired some temp workers, one of these guys was selling his home because he had qualified for a home that after the ARM reset, he couldn't afford it. ... Well He lost his house. He is one of the "speculators who caused this problem"

A friend of mine Purchased an investment property for 2 Million, When he was going through the process he was amazed because everyone in the process knew that he could qualify for any amount of money, all he had to do was Lie about it. Fortunately, though he has lost a tremendous amount of value in the property, he could still afford it. Because he didn't over extend himself. But the mortgage broker, the Realtors... Those guys are out of business now.

I just saw a Moveon.org advertisement, and I saw democracy now Last night. All of this plays out like we are going to Bail out Goldman Sachs, and that the guilty parties aren't being punished. It seems to me that the Thousands of mortgage lenders, The Brokers, the Salesmen, the Irresponsible Borrowers. Many of the bad banks, Bear Stearns, Lehman Brothers,.... Have imploded.

But there is a Domino affect, These aren't Fat cats being bailed out, It's our economy. It's trying to get the lifeblood of the economy going again, Lending. Sure there has been too much lending, and it's contracting. But who is going to get the Loans in this Contraction? Rich people. People with 680 Credit, BlueCollar people trying to buy a home, Small business' trying to buy some new equipment to expand, or even to stay current on bills.

Imagine what would happen if your car broke down, and you didn't have credit to pay the mechanic to have it fixed, and ended up losing your job because you kept being late because you couldn't pay for the repairs, until you saved some money.

There is so much blame to spread around... and it's valid... But so many of the bad actors have taken the pain, and will continue to lose homes, and lose jobs.

If history is any reflection, Banks can sit and not loan money for years, and it could cause a Serious contraction in the economy The likes of which we haven't seen in decades. Or we can help the banks Recapitalize. And get some reasonable credit going in the economy.

It's not just the "goldmans Sachs" in this economy who are responsible for the problem, there are tons of people we all know and care about who were responsible, and who have and are paying for their mistakes.

It's obvious to me that we very much want to cut our noses off to spite our faces and it's the most Probably outcome, because we don't realize that this decision is whether or not we will Make this economic pull back even worse, that it needs to be.

We want to punish the guy with the Top hat in the Monopoly game, with the Cigar.... he is a Myth, and with contracting economics, and credit.... It is that kind of fat cat who will survive, and who will be first in line to get credit. It wont' be the average Joe..... Goldman Sachs happens to be a Bank, and we are going to try and recapitalize the banks.

I can argue the points of the Rescue plan till I'm blue in the face, As originally proposed, the goal was not just to buy MBS but to even buy loans from credit unions, thrifts, and regional banks. That is the goal. Who knows if in the Sausage making that is our legislative process, if suddenly we will only be buying loans from the bad actors.... But things aren't perfect... I'm a big kid, I can accept that things aren't perfect.... the important thing is that we get some credit flowing into this system. And help the banks Help us.... They do it to make money, and if the government doesn't help them, there is no chance they can help us, to rebuild the economy.

I'm sorry I keep going on about this, But this is the Classic Economic mistake. To make a foolish economic decision based on some Idealistic notion about punishing the guilty... We are all in this boat together, and there are enough bad actors that have been punished and will still be punished. The question is How many Innocent bystanders are going to lose jobs for these Idealistic notions. How many Automechanics, chicken pluckers, High school kids working at sonic, do we want to punnish. All the while trying to punnish "Goldman Sachs"... Who BTW will never pay.... They will fire some people as the industry contracts... But they will never pay... and neither will the "Huntsmans, the Levitts, and the Numerous 'Fat cats' "... those guys in the monopoly game.... are so far ahead of the game, they are untouchable.... But the Little guys trying to get home loans arn't, they are the Pawns in this game.