On March 22, 2009 Dateline NBC aired a program entitled “Inside the Financial Fiasco: The Mortgage Crisis.” The reporter interviewed a number of individuals who accepted “a little bit” of the responsibility for taking mortgages they could not afford. One individual, for instance, had an income of $1600 per month. Yet, she took out a loan for a house requiring a monthly payment of $2100 dollars per month. She said that her consequent financial difficulties were not her fault.
She was not the exception. All those interviewed by Dateline NBC accepted “a little bit” of the responsibility for having taken out loans they could not afford. The bulk of the responsibility was laid on the lender.
Not mentioned on Dateline NBC were two facts:
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The government forced financial institutions to make loans under the auspices of Barney Frank’s Affordable Housing program, advocating that anyone who wants a house should get a house, guaranteed by government-created Fannie Mae and Freddie Mac
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Banks characteristically do not sell good loans. To do so would be folly. A good loan means the lender is earning money on the loan.
When someone applies for a loan, checking his financial soundness is good, responsible business. The lender must make certain the loan can be repaid, so that he can pay his creditors.
But when an institution is forced to make bad loans, it is being forced to lose money. Since the government insisted that everyone be granted a loan, the practice of packaging bad load with good loans accelerated. The packages were sold to banks and securities dealers, which were then sold to investors, usually large financial institutions that deal in money market funds and various types of pension funds such as 401-Ks. Thus lenders were painted “greedy” for wanting to cut their losses and get out from under the government’s edict to support borrowers who wanted to have their cake and eat it, too.
When someone claims that you must be forced to support those who do not live within their means, he is claiming that you must live for the benefit of the irresponsible. When someone claims that you are responsible for another’s action, he is claiming that “you are your brother’s keeper”—whether you want to be or not. This is altruism. Altruism is the basic cause of today’s “financial crisis.”
The disaster threatening this nation is a moral crisis. Americans sense it. This is shown by the angry protests erupting across the nation against the government’s continuing and expanding interference in our lives. No one can live for others. It is disastrous to try. It is criminal to force anyone to do so.
The solution to this moral crisis is to reject altruism and embrace the virtue of selfishness. This means to deregulate the economy and establish true free enterprise. It means taxes must be CUT, not increased. Government must be LIMITED, not expanded. Individual rights must be PROTECTED, not violated.
Until and unless we recognize that altruism does not promote our lives and well-being, we shall continue toward socialism. We need not go down that road. We can turn the country around. All one needs to do is recognize that one has “the right to live for one’s own sake, neither sacrificing oneself to others, nor asking others to sacrifice themselves to us.” (paraphrase of Ayn Rand, from Atlas Shrugged).
For more commentary by Sylvia Bokor
http://sylviabokorcomments.blogspot.com/
Ayn Rand and the Financial Crisis
The Bumpy Road Toward Individualism.
Lest We Return
https://sites.google.com/site/branchessite
Art and Integration
