I have a very serious objection to something that was said in the Investors Business Daily editorial that you gave us a link to:
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
Tough new regulations
forced lenders into high-risk areas? Who forced them?
In my first post, I said that low-income people were
encouraged to take risky loans. Carol pointed out that even if people are encouraged to do stupid things, they are ultimately responsible for their own actions. I agreed, at least partly, because I do think that people can be tricked into doing irresponsible things in situations they do not fully understand.
But the Investors Business Daily editorial claims that lenders had no choice but to do very risky things? They were forced to? Even though it was their job to assess risk and to
know that these things were unsafe and potentially unethical? Who forced them to do this?
Scott Lilly's main point is that the global economy suffers because rich people have made themselves richer at other people's expense. The Investors Business Daily's main point is, as far as I can see, that lenders
have to make themselves as rich as possible, even at the risk of creating long-term problems or crises. If governments try to regulate these people's behaviour then it is those governments' faults that these people were forced to put themselves and large numbers of other people at risk so that they could keep enriching themselves until things fell down around them.
I'm not impressed.
Ann
