I’m sorry. Are these people adults or fucking children? At what point are people expected to understand their own finances? What ever happened to “caveat emptor”? Or “a fool and his money…”? Or any other pearl of wisdom loosly translated to “get your head out of your ass and understand what kind of deal you are getting involved in”?
When it’s enough people that the problem is sinking your economy, then it’s time to put aside petulant judgmentalism and seriously consider what public policy means can be used to correct the problem and prevent it in the future … say, through regulation of the lending markets. At some point the number of “fools” by your definition reaches sufficient magnitude that you should consider scrapping your definition of “fool.”
That says more about you than anything else I can say.
All I am saying is that it is better to spend a bit less than you earn than a bit more than you earn and Americans today are not saving but a living beyond their means.
Not enough housing? Are you kidding?
For the price of a house in Washington DC you can hardly buy an apartment in any major European city but that does not stop the whiners from whining. Europeans pay a lot more for gas, energy, etc. but many Americans, instead of being grateful that they have such luck feel they deserve more. More than Europeans, more than anyone in the world. And that is what leads to overspending and foolish indebtness. When you feel you deserve more than you earn.
And I did not help build the Golden Gate Bridge. I helped build the transcontinental railway.
I’m not saying its a character flaw, I’m just saying that wealth is built on the backs of the poor. Always is in capitalism. And saying “we think us workers should get a fair share” while buying cheap good made by Chinese workers living in poverty is ignoring that we are part of the very problem we decry. We’ve just moved the poor (and, yes, there are certainly poor in the United States)
I wish there was a way to create a world without poverty AND get me a cheap pair of tennis shoes…
Me: Americans need to spend less and whine less.
American #1: Whine! Don’t call me a whiner! Whine!
American #2: But I’m Not whining! I truly deserve it!
American #4: Whine! You are wrong when you call us whiners! Whine!
Of course there are quite a few people who recognise the nature and the source of the problem but they are not enough to turn around the problem. The majority do not want to hear the truth.
My prediction is that America’s decline as a part of the world economy cannot be stopped. Maybe it can be slowed somewhat but it cannot be reversed. I also believe that when people look back in a few decades the presidency of Bush will be seen as a disaster when America was in freefall on all fronts. A turning point for the worse. Obama can only try to repair the damage and it will take longer than he will be president.
As an american who lives right on the fringe of my means and has no debt whatsoever, I have to ask, what does the whining have to do with it? Why can’t I whine? Does my whining hurt anything? If I whine louder, can I collapse the entire american economy? If I do it through a loudspeaker, can I take out the entire world?
Quit whining about the american whining already - you’re just smokescreening the point. The reason that americans made bad choices is because banks and credit card companies surround us with increasingly attractive yet covertly stupid options and actively try to get us to screw ourselves over, so they can grab the benefit and run. If something was done about the wolves, the sheep wouldn’t be in as much trouble. (That would involve messing with the free market, though.)
Who’s whining about whiners now?
You seem to be in possession of the truth, but you haven’t set it out yet. Except that maybe we should all be living in corrugated tin shacks or something.
I invite you again to set forth a coherent diagnosis of the financial crisis and a blueprint for recovery. So far it amounts to calling people names and I’m not impressed.
It’s a problem on both sides. Who’s a bigger fool? The fool who buys a house he can’t afford or the fool who lends him the money?
It doesn’t hurt anything, but it doesn’t particularly help anyone either.
Well here’s an interesting question. There are millions of people who do just that. What makes you or I so different that we deserve such a higher standard of living?
Aside from my working 40hrs a week at a job and having spent the years and money to become qualified to hold one that keeps me out of tin shacks? Nothing, really. How do you propose to get those millions of people up to my standard of living?
Does it matter? What’s the solution so that risk is reduced on both sides?
I’m not the one pretending to have some special insight on the American character or on sustainable economies. Instead of asking sarcastic questions, set forth your plan. If it is “Americans should get used to living in corrugated tin shacks,” then say so, and back it up with a coherent analysis.
How about “Americans should learn to live within their means, both individually and as country”?
And, “Millionaires should gladly give of themselves to the poor sufficiently that no man, woman, or child is left destitute.”
Also, “Everyone should be honest in business.”
And, “Politicians should be prudent and honest in all their affairs.”
Wow, this is easy, fun, and makes the world a better place! (Doesn’t it?)
Politicians are elected by the people. The people get the politicians they want and deserve. That’s the beauty of democracy.
I bought in 1986, so I’m all right Jack. 
Like I said, hindsight is wonderful, and there has been a big increase lately in purchases of low cost foreclosed houses, probably by these very people. The downside was that they weren’t in a house all that time. I remember a lot of people in Silicon Valley expected a house price correction after the bubble, but it never happened. So, even in 2004 they might have been waiting a couple of years for the crash.
If you blame everyone, you blame no one. Bush and Madoff are not even high up on my list. Madoff is a sideshow. He stole a lot of money from rich people, true, but the economy as a whole will never notice it. Bush may be blamed for supporting the deregulatory atmosphere, but at the time any rational people, forced to choose between advice from Greenspan and Bush, would choose Greenspan every time.
The deficit itself had nothing to do with it. Please give me a cite for a reputable economist who says that this was a big issue. I’m not saying it was a good thing, but it was not bad enough to throw us into this mess.
Even consumer debt was not the issue - at least not from the consumer’s point of view. It is a simple enough thing for lenders to manage this risk. The problem was that they had incentive not to manage it, in fact to increase it, as they could represent it as low risk, and yet get high risk returns for it. The difference between the actual risk and the perceived risk is the thing that caused the problem There was clearly an assumption that if you spread the manure over the entire pasture, it wasn’t going to smell. Which was fine, except they kept pumping more and more in.
Now that the risk is all too obvious, we see how credit card companies, for instance, are managing it, at last. That is tough on the people expecting credit they don’t deserve, but it clearly shows where the power is.
That people tend to be over optimistic about their earning prospects and their ability to pay is nothing new. What is new is that the companies with models of what these people could really afford threw them away. Assuming that your customers will all of a sudden change their debt habits for no reason is not a good business plan.
Actually, the answer to that is fairly simple. We need to stop fooling ourselves that the market will prevent it. Both sides have very real incentives to drive over the cliff. We need regulation that says “we don’t care that in the short term lending money to these bozos will improve your bottom line; in the long term it is bad.” Then we add the factor of paying big fines or going to jail which makes these risky loans unprofitable - and then enforce it.
No, you just want someone to hand a golden ticket to every idiot who can’t calculate interest or read an amortization schedule. Look, I’m all for helping people in need and all. But I think money should go to stuff like helping people through rough patches, not subsidizing the $600,000 McMansion a family making $50,000 a year purchased.
Let me ask my question in a different way. Let’s agree that people shouldn’t live in shantytowns. But who should build those houses, who should pay for them and how nice should they be?
Actually, the banks were encouraged to make these loans by government who wanted more people to fullfill the American dream of owning a home.
Well, that’s easy.
I’m against using tax money to help teen-agers get blowjobs from hookers.
I’m against subsidizing book burnings by religious fanatics.
Whee!
Is there a significant number of $600,000 mortgages held by households making $50,000?
Is this discussion ever going to get real, or is it going to continue to be a series of straw man ROs?
As an informational point, who owns all the credit card debt? Is that entirely on the respective companies, or has that been parceled out into potentially toxic derivatives?