Faltering Principles

Written by Fritz on November 18th, 2008

Here’s an article from standard and poor’s suggesting some underlying problems emerging in derivatives because of mark to market, yet people were even suggesting then that it shouldn’t be a problem. The date? Oct 2007. When the problems became apparent, who did what?

It can’t be denied that some people started making statements of concern about Fannie and Freddie starting in 2003, as problems began to emerge, and even drew up legislation (see S-190). And some other people said that everything was fine, and we shouldn’t worry. Now it’s clear those other people were wrong, but will they be held responsible? Can they be? Will people still vote for them? It actually appears so…

I don’t think there’s a coincidence that those who resisted warnings and legislation were also receiving campaign contributions from those who would be impacted by the warnings and legislation. But that’s just me.

Ultimately I think people are making a mistake trying to point fingers at individuals or political parties. It wasn’t a failure of party or politics, but principle. If conservative principles had been followed, it simply wouldn’t have happened. Neither republicans nor democrats followed these principles (the community reinvestment act is a perfect example). Now of course it’s nice that people can realize a dream to have their own home, but if they can’t afford it, and they have no “skin in the game,” why are they somehow entitled? the results were completely predictable. The policy obviously had good intentions, but now who’s responsible? Again, it’s the responsible people who are responsible.

So it’s odd to me that when government policy creates a problem, there’s not a call to undo the policy or throw out the “officials” who created it. Instead support rallies behind a nominee that says we need more policy.



Leave a Comment