Sub-prime thoughts

Quote from Barack Obama – September 2007.

“Subprime lending started off as a good idea - helping Americans buy homes who couldn't previously afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories and spread them out among investors around the country and around the world.”

In other words, there are many Americans who could not afford a home. These sub-prime mortgages allowed for the loosening of normal credit requirements, and we had quite a few Americans who bought homes utilizing these new rules which increased the loan amount and/or decreased the adjustable interest rate.

Now, there’s nothing wrong with the purchase of a home, nor should any American be denied applying for any home loan. However, with the backing of the federal government, Fannie Mae and Freddie Mac unfortunately became too liberal in their lending practices, with the blessing of the Democratic Party and such Democratic Senate leaders such as Chris Dodd.

At this point, a large (but false) financial infrastructure began to be constructed, but with no real foundation. As such, by last year, this “mirage” of a secure financial infrastructure began tumbling to the ground.

So, what is Senator Obama saying here? He’s basically saying, “Well, it was a good idea in philosophy.”

But now everything is seriously messed up, so in reality, it’s not a good idea even in philosophy, mainly because we live in reality.

Senator, how about, “I was wrong.” When he made those comments a year ago, the sub-prime crisis had already begun, and yet, he was still believing that sub-prime mortgages were a good idea. This makes me question his judgment.

Sure, it’s nice to say things like,

• “All Americans should have a home”
• “We need a President in the White House who cares about people”
• “Change is coming, and we will mark this moment as the moment that the oceans began to fall and rise and fall again, because the moon constantly changes the tidal patterns along our coasts.
• “Puppies are cute”

But the reality is, Senator Obama, making fine statements about ideas that MAY work is one thing…you are VERY good at making these types of statements. However, I would prefer fine statements about good ideas that ACTUALLY work. They’re generally…better.