Recent letter to the editor I wrote

To the editor:

It is becoming abundantly clear that the election this fall from the top of the ticket down to the local races will be about the economy. The majority of the people will vote based not on facts and ideas but on perceptions. That being said, we should look through the smoke to the fire that is burning the life of this nation. While I am a fully unashamed conservative and Christian, and I believe that individual responsibility is paramount and that the government role is not to protect the economy but to ensure that people are not abused by its excesses, I am also quick to put the blame of the current credit crisis on both major political parties and the companies that abuse the public trust.

Therefore, let me present 7 general root causes for this financial mess in which we find ourselves:
1. Americans are greedy people as a general rule. We must spend more than we make and still feel our lives are lacking. Only worldly goods can fill this void in our souls, we think, so in good times and bad, we overspend. When bad times arise, such as exploding gas prices (hence exploding inflation to almost all goods and services we buy), we have no choice but to give up something. Since laws are in place to make it hard to foreclose on our homes, the housing payment is often first to go.
2. Politicians have been bought off by Wall Street and others. Powerful and rich CEOs and others have purchased our national leaders of both parties over the past two decades to write the laws to favor loose reporting and monetary policies. This has exacerbated the credit concerns by making it very easy to give out excessive amounts of credit when the economy is humming along. Now, when these CEOs shuffle through Congress for these hearings, one thing you do not see is them getting hauled off the jail and their assets being confiscated to pay for the damage they have done to their shareholders, employees, and taxpayers. That is why Congress votes to print more money and borrow more from China to do this bailout that the public hates.
3. Politicians are scared to death of political correctness. Primarily lead by Democrats in Congress, especially the likes of Barney Frank, who I believe is the most incompetent person in Congress, banks and other lenders are called to account if they practice any real discretion in the issuing of credit. If a bank wants to hold to traditional underwriting criteria, they are vilified as racist, because minorities tend to be unable to afford traditional loan terms. Hence, people are given loans they have no business accepting because they cannot pay them off if the interest rate increases or the cost of living rises.
4. Lenders use predatory lending practices. Lenders are taking advantage of loose regulations and Congressional/Presidential demands to flood the market with credit, seeing this as an opportunity to make money. In order to offer such low rates when credit is easy to find is to give them variable rates and even more predatory terms and then tell their loan officers that they will get a commission on every loan you make. Many loan officers, wishing to make money in the short-term, will make loans with the company’s assets to people whom they would never dream of lending with their own money, because they know the people are not credit-worthy. As long as the company approves the ratios, the loan is made anyway and the broker gets the commission. The bank or mortgage company will sell the loan on the open market and bundle it as stock. As long as the economy goes strong, there is no worry about a small amount of loans failing.
5. The economy is only strong when we overextend ourselves. Notice how Congress and our President are seeking to inject funds into our economy to remove the credit crunch, as it is called. This is because our economy cannot grow at a satisfactory pace if there is not enough easy credit to allow people to borrow money to make investments, entertain themselves, or purchase goods and services. The last thing our government wants is for us to quit buying on credit and overextending ourselves.
6. The Democratic Party, in particular, has wanted to lower the value of homes, i.e. slow the market down, to make homes more affordable due to their class warfare mentality. This practice diminishes the value of our greatest asset, all in the name of making homeownership affordable to all. Well, perhaps homeownership is not for everyone, at least not all at one time. While I am certainly all for affordable housing, I am not for homes valued less than the debt against them.
7. We are not pumping oil out of Iraq like crazy. We should be pumping so much oil out of Iraq to a) pay off the costs of our presence there and reconstruction, and b) flood the market so the prices go down. With $1.75 gas we can afford to buy gas and pay our mortgage payment at the same time.

Certainly, the economic problems we face are real. The corruption in both parties, their lack of leadership, their looking away from predatory lending practices, and the liberals’ effort to play political correctness and call homeownership a right has brought down our national economy. It sounds like conservatism with strong leadership will be necessary to stop the continued funneling of money into this socialist bailout. Taking action on the above seven issues would help, but I think our government, especially if liberal Democrats win at all levels, will solve this by increasing taxes, printing too much more money, and indebting us all the more to Communist China and the terrorists in the Middle East.

Sincerely,

Jeremy Rounds