The WSJ Had It Right

The op ed piece in this Thursday's edition of the Wall Street Journal had it right...calling the federal market intervention plan a 'Wall Street bailout' is just plain inaccurate and a convenient ignoring of the truth. Whatever 'bailing' Washington is willing to do is as much for the benefit of all the home mortgagees who gleefully accepted the low APR, one year ARM at 125% loan to value with no certainty of making the payments unless their home increased in value by 25% a year as it is for any bank or wall street executive. When credit was readily available at record low rates, and the credit card offers kept pouring through the front door with agressive incentive balance transfer rates, these same consumers gladly accepted this 'found money' as if it was their god given American right.

Some how this has all been turned around, and the concepts of personal responsibilty and foresight have been conveniently forgotten. At the risk of sounding a bit Clintonian, "It's the payments, stupid". Non-performing, over valued mortgages are, at the root, the consumers problem. Wall Street doesn't owe Main Street a life preserver; Main Street didn't suffienctly manage their personal financial matters past their own nose. It's not all Bush's fault or those greedy credit pushers on Wall Street, or Freddie or Fannie's problem. Its an American problem, a society whose savings rate has consistently declined over the last 10 years, yet leads the world in the consumption of extraneous luxury goods like personal electronics and high-end purses, the natural result of a self-centric culture consumed with finding someone else to blame when something goes wrong.

The ability to apply small personal disciplines to our daily lives as practical steps toward the creation of an envisioned improved future state is a lost character trait in our culture. After all, we're told if we shop at WalMart we'll "live better", a pithy meaningless promise that subliminally encourages the direct connection between shopping (spending money) and living 'better'. What if WalMart's adds said "Stay at home once in a while and put that $500 you would have spent in our stores toward your mortgage prepayment. Then you'll live better"? Seems almost silly, doesn't it? But, it's our opinion a good bit more personal accountability all around for choices and actions, or the lack thereof, would do our economy good.