The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.
–Jeffrey A. Miron, Senior Economics Lecturer at Harvard
Here’s the problem with the nation’s troubled financial system in a nutshell: Americans don’t have enough money to pay their mortgages.
President Bush’s plan to bail-out the banks by having the US government buy troubled mortgage-backed securities is the wrong way to fix this problem. This is like handing a $700 billion blank check to the people — bankers and investors — whose greed and risky behavior caused the problem in the first place. The right way is to help homeowners who’ve already lost their homes buy them back and to help homeowners on the brink of foreclosure from losing their homes. (And then adopt strong regulations so it won’t happen again.)
He advocates a simple solution that would not only work economically by putting money into banks and the economy through giving people money to pay their mortgage or repossess their homes, but also socially by keeping people in their homes. Why is this not the only solution being talked about?
The photo is Home Foreclosures; Banks Refuse U.S. Home Loan Bonds. Oil Magnates Arrested; Break N.R.A. Code by Joe Crawford (artlung), and it’s part of his Coit Tower Murals set (slideshow). Joey’s blog is at artlung.com and looks pretty cool. I mean, it’s got Rollerskating Ninjas and everything.