Cheap morning

In addition to a $1.00 off coupon at Caribou (thanks Wayne!) I also knew that Donald Duck's nephews were Huey, Dewey, and Lewie, so my coffee was $.86! Given the supposed economic doom our country is in, every little bit helps :)

Seriously, there are so many sides to this problem that the country is in with the banking industry, and I have many mixed feelings (and it seems like even party lines are breaking down on this one). I guess it comes down to that you can't have it both ways - if you want less government, less regulation, etc. you can't have the government bailing everyone out when this kind of thing happens. If you want the government to bail out people when this happens, you have to accept more government regulation. I don't know why that's such a hard concept to get.

Even though I'm probably mostly on the liberal/democrat side of things most of the time, economically I've always leaned toward a more fiscally conservative, less regulated economy, because I always felt that too much regulation artifically drove the economy and eventually that catches up to you - especially as we are moving towards a world economy now. But history really does demonstrate this doesn't work very well. The factor I always forget to put into the equation is greed. That factor is coming through very clearly in this current mess. To the CEOs of these large companies, what incentive do they have to plan for the future if they're getting huge salaries, stock options, etc. - for them, it's easy to get caught up in the short term, how much can we make now, no matter the future cost. And if the company crashes, oh well they've already gotten their big payday out of it, so who cares.

And, it is of course not good for half the country to have their mortgages foreclosed on. Part of me thinks it is the fault of the people who took out loans they couldn't afford in the first place, and that they should have to take the consequences (and they should to some degree). BUT...many of these people are first-time home buyers, who probably don't exactly know everything about loans and how much they can afford, etc. and are putting some amount of trust in the bank giving them a loan. Plus, from personal experience, I know that buying your first home is as emotional a process as it is a business process - you're excited, nervous, etc. and you may not always think completely clearly about the business side of things. I was fairly sure I could afford the first house I bought, and I was conservative on how big a loan I took out (they would have given me a lot more) but there were a lot of hidden expenses and things I didn't think about with home ownership that I know now, and I can see some new home owners not thinking about these things.

30 years ago banks would never have given out these kinds of loans because the each individual bank was in business to make money - and they would not take the risk of a bad investment (someone who wouldn't or couldn't make their payments). But things have changed - banks have merged to become super-banks, and these loan investments have moved beyond just the bank, to Wall Street investors - so they've become more like stocks. Which means the old built-in safety mechanism (banks not giving out risky loans) is gone.

I honestly don't know if there's a good long-term solution. I do know that the present system we have obviously isn't working. I can't see how we can do this bail-out thing and not add regulation at least for awhile.