Wednesday, October 19, 2011

Greed is Not Limited to the One Percent

Tasha Kheiriddin has an excellent column in the National Post today entiled: "Greed Doesn't Stop at the 1%" She begins:

Oh, that nasty 1%. Based on the global protests inspired by Occupy Wall Street, they are the source of all the world’s ills. The placards say it all: “End corporate greed”; “Paycheques not credit card bills”; “Banks for the 99%!”

But what about that 99%? What responsibility do they bear for the situation the world finds itself in? The answer is: plenty. Greed doesn’t just live on Wall Street: it finds a home on Main Street too. And when people think it’s perfectly OK to take out mortgages they can’t afford, or rack up credit card debt to buy flat screen TVs, clothes and appliances, or draw on their home’s equity to finance cars and vacations, well, as they say, you reap what you sow.

Of course, there are people who are hurting as a result of the recession through no fault of their own, she goes on to note:

Yes, there are many people who legitimately struggle to make ends meet. Who work two jobs at minimum wage, who eschew things many consumers take for granted – cable TV, a car – and who watch every penny. For them, I have sympathy: they are the collateral damage of the market meltdown, as jobs dried up and wages stagnated.

But you only have to crack open the business pages, or watch a reality TV show like Gail Vaz-Oxlade’s “Princess” (about heavily indebted young women) to start questioning the moral purity of the 99%. Many of these people are the authors of their own misery: they consider credit to be cheap, if not free, money. The result is that even here in Canada, the ratio of household debt to personal income has hit a whopping 150%, up 78% in real terms in the past twenty years.

This is the problem: many of the OWS protesters are people who have been personally irresponsible and now want big government to bail them out. Any recent graduate of a Canadian university who has a $50,000+ student loan is irresponsible. That represents the financing of a lifestyle, not an education.

The reality of the world is that there are always going to be many good things that some people cannot afford - or cannot afford without self-denial, hard work and delayed gratification. That is reality and many OWS protesters seem to be in denial - not of self, but of reality.

Kheiriddin goes on:

Sure, it’s easy to blame the Wall Street CEOs for bundling rotten mortgages and contriving arcane debt instruments that weren’t worth the paper they were written on. But someone took out those mortgages. Millions of people, actually, who bought more house than they could afford. Did someone hold a gun to their head? No. They were just as greedy as the 1%, only on a smaller scale.

Governments are also just as guilty. In the U.S., Fannie Mae and Freddie Mac granted mortgages to people deemed disadvantaged – minorities, the poor – in the hopes of increasing home ownership. This spurred the private sector to compete and fuelled the infamous subprime mortgage market.

This part is important. Several US administrations, going back to Clinton, have attempted to defy economic reality and common sense by pressuring banks to give mortgages to people who can't afford them. In the name of increasing rates of minority home ownership they have pushed for smaller down payments, longer terms and lower financial qualifications. This does not help minorities. It does not help anyone. What would constitute really helping minorities would be a growing economy in which they could actually qualify for mortgages under the old rules. But liberals cried "racism" at anyone who challenged them and the eventual result was the subprime mortgage crisis.

The subprime mortgage crisis was the main driver of the 2008 financial crisis. The problem was that too many financial institutions held worthless mortgages they had paid a lot of money for and they faced losses that threatened to sink them. They demanded that the government bail them out (using tax payer's money) because it was government that created the mess in the first place (which it was).

The moral of the story is that the old mortgage rules should have been kept in place. As a matter of fact, they were kept in place in Canada and you didn't hear about any banks failing in Canada, did you?

So it was government, coupled with individual greed, that created the mess. Wall St. just went along for the ride and it was no wonder government was so quick to bail them out. That way government can pass off blame for creating the mess to Wall St., which doesn't need to get re-elected.

That is how the world works. But the lesson is that we don't have too much capitalism; the lesson is that we don't have enough capitalism. If we had a real capitalist system the banks would have been allowed to go bankrupt, their profitable assets would have been bought up cheap by their competitors and the system would go on. But we don't have real capitalism; we have cronyism instead. If we actually had real capitalism there would have been no crisis in 2008 because the government would have stayed out of the regulating banks into giving mortgages to people who didn't qualify and there would have been no subprime mortgage crisis.

The point is that greed is indeed a problem, but greed is not limited to the 1%.


NathanColquhoun said...

Dr. Carter.

1. - this is the stance many christians are taking towards this, is this not a healthy approach? we believe that the 99% are just as broken.

2. many of the things you said are what folks in the movement are asking for (allowing the banks to fail etc) but you seem to be shifting all the blame just to government and the 99%. do you not think the 1% takes any of the blame for just "going along with the ride" considering how much there ride benefited them and oppressed the rest of them that thought they were just going along for the ride as well?

Craig Carter said...

Look, I am able to see more than one side of this issue. In fact, I am the one who is putting blame on all 3 parties: the banks, the govt. & the individuals with the entitlement mentality. Do you think the banks want to be allowed to fail? Of course not. They fear capitalism & that is why they like the Democrats. Big Business loves Big Government.

But let's look at the OWS people. All they do is carry stupid signs saying "Eat the rich" and vilify Wall St. as the cause of all the problems of the world just as Marxists and their dupes have been doing for 150 years now. I can't respect that. It is one-sided, myopic and immature.

Obama (who got more campaign donations from Wall St. than John McCain & more than any other president in history) is using OWS to deflect blame away from his atrocious administration and onto Wall St. and the Republicans, whom he paints as the protectors of Wall St. This is a scandal.

Either the OWS people are his willing pawns who are doing this on purpose or they are just plain stupid. I think it is half and half. The Big Unions who are organizing this know exactly what they are doing, but the college kids who hardly even understand the issues and pathetically want the govt. to pay their student loans are just dupes.

I think the revolving door between Wall St. & the White House needs to be nailed shut. Do you realize that Rahm Emmanuel and Bill Daley both worked for Goldman Sachs? What we need is a president from outside the Washington establishment who will shake things up. A Rick Perry or a Herman Cain makes the 1% pee in their pants in fear!

This is why lefties like you are so frustrating to me. You swallow the party line that the Republicans are the party of the 1% and the Democrats care about the little people. That is just wrong. The Democratic and Republican party establishments are part of the political elite in the US and the Tea Party, which is threatening to take over the Republican Party represents the only - repeat ONLY - serious threat to the status quo in the US that got us (i.e. the world) into the economic crisis.

If you really want to be radical, support the Tea Party. The Tea Party stands for small business, the family, traditional virtue, limited govt., capitalism, individual initiative and freedom. But if you want the same old same old then just let Obama and the Big Unions sucker you into making sure the same political elites that controls both the Dem. & Rep. Party establishments + Wall St. + the mainstream media + the universities + Hollywood continue to run the show.

It is tragic that young, idealistic Christians let themselves be sucked into worldly, leftist rhetoric and drawn away from a biblical and conservative worldview by the allure of "helping the poor" and "fighting injustice" and other such sweet-sounding slogans. The tragedy is that they end up supporting abortion, sexual immorality, materialism, class envy, hate, eugenics, irrationality, anti-Semitism, radical feminism and anti-capitalism.

I understand the temptation. I was going down this road myself until one day I was jerked out of my stupor and I realized that the Left-wing temptation is built on lies and is just plain old worldliness.

Craig Carter said...

I did check out the Jesus Radicals site and I'm afraid I did not see much of any value in it. This may seem new and cutting edge to you (I don't know) but, honestly, it is centuries old re-cycled heresy.

NathanColquhoun said...

Dr. Carter.

The reason I showed the jesus radicals article was simply to show you that the 99% that I am reading isn't just blaming the 1%, they are accepting the blame on themselves as well. I meant nothing else with that link.

I don't support the Tea Party anymore than I support the Democrats. I do not see this as a partisan movement and neither does 70% of them (says one survey, besides I'm canadian, i really don't see a need to "support" one of these partisan movements. in the end, i run a small business, love my family, grow my garden, serve the poor and i don't really care who is in power or what label is attributed to me. i really don't think the democrats or the republicans care much about anything besides power, they just have different ways of going about it.

What i find so frustrating about this blog is that you have yet to show me you can see anything in the entire world through a lens that isn't red or blue. because i ask some questions or because you see a few trigger words you jump all over it with all your wild accusations of leftist, marxist, blah blah blah. So many accusations. i'm unsure how you expect for anyone to listen to you let alone engage you when you respond with labels and categories and warnings of what happens when you start thinking a certain way.

Craig Carter said...

Your comment in the last paragraph makes absolutely no sense. Are you saying all these distinctions just don't matter? Why do you bother thinking or reading at all then?

NathanColquhoun said...

"this is why lefties like you" is a quote from you

this isn't the first time that i've said something on here and then got labeled by you.

by doing that, you are taking what I have to say and automatically categorizing me with a bunch of people that you passionately disagree with. i'm unsure how doing this makes any sense?

Craig Carter said...

So is the label inaccurate or do you just not like it? I really want to know.