The Mortgage Crisis is part of the Reagan Legacy

[bleedingheart]

I read both my local paper, the Pittsburgh Post Gazette and the New York Times and the articles dealing with the mortgage foreclosures initially made me mad at the banks for giving out loans to people who had no ability to pay for them or setting people up for bankruptcy later...

I also feel that some folks were a bit unrealistic as well. They had no downpayment, they overbought in their market figuring that their income "had to go up"...and in some cases they kept re-mortgaging debt. First starting off with a fixed rate, they would accumulate more debt via credit cards and then roll that debt into their mortgage and start the cycle again.

So there is more than enough blame to go around.

However I can't help but think of ole Ronnie...and his ability to ignore the obvious and spin fantasy tales of "good times ahead"...and the way he told us that government was a hindrance to us...that unfettered capitalism was a great thing....that the markets could police themselves.

I also think about how he and his ilk ressurected the Horatio Alger stories and fooled people into believing that they too could be part of the top tier..

Some of the folks who are getting screwed in this foreclosure mess were kids like me when Reagan was in office..and many of them were part of that "Reagan Youth Group"...the kids who thought the world was just their oyster...and they have had 20+ years of people feeding them the same kind of bullshit...is it any wonder that they would keep digging a debt hole in spite of the fact that it just didn't make much common sense?

I can also empathize with these folks because the pressure to fall into the fantasy world came not only from the goverment officials feeding us this line of bull but also from the other koolaid drinkers around us...People who themselves were up to their ears in debt and they wanted the rest of us to join them ... Hell I had people who visited my home who would tell me..."this is your starter home right?"...meanwhile they were mortgaged to their eyeballs and driving BMW's...generally I didn't care but sometimes it hurt...and sometimes it tempted me...sometimes I put common sense aside and thought..."well perhaps I can do it.."...only to find that once I ran the numbers...it didn't make sense..

Then there are the folks who are the victims of real estate bubbles...folks who ignored perhaps their gut feeling that housing prices were too high but they had society's pressure on them...the American Dream of homeownership...so in spite of that fact they bought homes in CA, FL..etc for three times what they were worth or more...because they didn't want to get left out...

and now we have a mess...and people are getting hurt...and learning lessons the really hard way and that isn't something to laugh at...they are finding themselves having to start over or worse...

So in the end...I can't help but think ole Ronnie and lay part of the blame on him.....the man who basically told us to put our common sense aside..

[tsuki]

1. I am getting tired of bailing the banks, the S&L's, out every 20 years. nt

[bleedingheart]

3. there was a fellow here in Pittsburgh that lost $300K of his life savings

because he had it all in one bank...and that bank failed...

Of his original $500K he only got back $200..and that was a stroke of "luck" because one of his accounts had his son's name on it...otherwise he would have only gotten $100K..

[snappyturtle]

4. My husband lost big bucks in the S&L's and nobody bailed him

out. But by golly "they" protected their own. Thanks Neil.

[wain]

2. When the dust has settled

it will be important to see who got hurt the most. The honest home buyer, or the speculator purposely overextending to "flip" the home in a short term to cover the loan cost and make a quick profit. In the end both get hurt, but my sympathy is with the former.