I was pleasantly surprised to see an article titled The Case For Foreclosures on Slate.com the other day. Finally, someone was taking a critical look at the recent desire by Congress to "do something" about the wave of foreclosures sweeping the nation.
The article doesn't touch on one of my pet peeves, namely that capitalism, by definition, requires some businesses to fail, or in this case, some loans to default and go into foreclosure. Capitalism is sort of a Darwinian financial system where only the strong survive. Whenever Congress or someone else steps in to prop up an industry, they are subverting free-market capitalism.
The article does, however, rightly point out that someone's loss is someone else's gain. There will be many families who are now able to afford a house they otherwise couldn't, all because another families had to get kicked out. Saying this does not mean I have a lack of compassion. It's merely the facts of Financial Darwinism.
Tuesday, March 04, 2008
The Case For Foreclosures
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4 comments:
Yes, I agree! And continuing the Darwinian analogy - "saving" the foreclosees only dilutes the strength of the market as a whole.
I've read your whole blog from beginning to end in the last couple of months, and I have to commend you! We were introduced to Rich Dad, Poor Dad about 4 years ago and currently own two multi-family houses in our town.
Thanks for the kind words! And congrats on the two multis!
Exactly they are not helping homeowners from loosing there homes they are helping the lenders from loosing it all.
Guess who will pay in the long run!
I read a quote recently where it said the Fed's (i.e., Treasury Department's) job isn't to help the individual public, but to protect the banks, which goes right inline with what 'blue ridge' said. I think any short-sighted, knee-jerk "fix" now will be paid for man years down the road.
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