Just saw this in the Letters to the Editor section of SJ Magazine...there's some wisdom in Steven A. Boorstein's letter. He comments on the "Price of Greed", as in Wall Street Greed, from the November 2008 issue.
I agree with much of what he has to save---people have been too concerned with acquiring 'things' the last 20 years. I do take exception to the notion of paying for everything with cash. We can't underestimate the importance of consuming financing, which has driven the prosperity of the nation since World War II. We need to borrow what we can't pay for in cash---but we need to be able to pay it back. Adjustable rate mortgages are for the birds, as my mother used to say.
Here is an excerpt of his letter.
"Consumers are also partially to blame. In my grandfather's time, you didn't buy what you didn't have cash to buy.
If consumers looked towards their life, work and relationships as more important than the Lexus they drive or the 3,800 square-foot home they own, they might realize that happiness is not 'things', it's experiences and people. Maybe what happened is a great lesson that should be heeded. Maybe we should look beyond the mess and focus on that lesson, which could be: Focus on what you need. Give. Build lasting relationships. Find happiness in life's experiences."
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2 comments:
Was there really a change in consumers greed in the past twenty years? Greed is what drives capitalism and if not violating ethical, legal, and moral statues should not be frowned upon. I agree with the concept of consumers should not purchase more than they can pay back and ARMs are for suckers. I can see though how some could fall into the trap believing that quickly appreciating home prices would offer an option for refinancing.
Hi Bill
You're probably right---consumers have a right to grab for whatever they can legally get--and if that meant a mortgage on their dream house, then I guess that's OK.
On the other hand, some people are incredibly foolish, and believe that there are rules and regulations that prevent them from buying a house that they can't afford. At the least, it used to be a bank or mortgae company that had an investment to protect.
I remember seeing friends buying properties that I knew they couldn't afford---I was befuddled as to how the underwriter approved them for the purchase.
Now I know that the underwriters were being pressured to approve everything.
And banks and mortgage companies had nothing to lose since they were selling the mortgages soon after they wrote them.
Now that's fraud.
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