Bar Stool Philosophy: How We ÃÂcouldÃÂ Have Fixed the Housing Market Crash
IÃÂm a communist, forgive me for not having the best outlook toward capitalistÃÂ ÃÂ Note that when I say capitalists IÃÂm speaking about the 1% of the worldÃÂs population that is in possession of over 99% of the worldÃÂs wealth or capital.ÃÂ I am talking about those people who can loose their primary source of income, and not change the style and way in which they live.
That said, I was once relaxing, drinking, smoking with a friend when this solution was proposed to me.
The discussion was pre election, right around the bank bail out. My friend Adam Smith was discussing how simple it would be to solve at least improve the entire countries economic problem.ÃÂ I was willing to bite and got a good bit of information out of him.
Smith noted that the spent more on the bail out than the debt in which the house ownersÃÂ had incurred.ÃÂ This did not surprise me, so I never looked into itÃÂ I doubt it changes the validity of the eventual improvement.ÃÂ So Smith than brings up the revolutionary idea that the government should have bailed out the housing owners.ÃÂ The very owners who owed the money in the first place.ÃÂ These people who are the back bone of our economy would then be able to pay those debts.
We now have the populace and the banks paid.ÃÂ The people are no longer in financial crisis and free to spend and invest in the economy.ÃÂ The banks are no longer in financial crisis and free to invest in our economy.
It was at this point that my other friend Karl Marx noted that the people who were in debt in the first place had already failed their obligation and did not deserve to be bailed out.ÃÂ What did not connect in MarxÃÂs mind must have been the simple fact that neither did the banks.
It was not the people who offered mortgages that ballooned in such a way as to create such massive foreclosures.ÃÂ It was banks taking a risk, a risk that offered a lot of money to be made.ÃÂ The gamble of course did not result in the cake and itÃÂs eating.ÃÂ It was of course a calculated choice and a choice that capitalism dictates is choice that sets those destined to succeed from those destined to fail.
Smith made his point with most those there.ÃÂ The banks took a risk and failed.ÃÂ Simple as that any other business would have been smothered and die peacefully.ÃÂ Nothing necessarily warranted the bank bail out.ÃÂ If action was necessary the action should have been taken toward those who were hoodwinked into and suffered most from such poor business decisions.