The sad thing is that this is the third cycle I have seen personally, the first being in the early Eighties (remember the “Savings & Loan Crisis”?), the second being in the early Nineties when our local economy and housing market collapsed, and then now.  (When my wife and I bought our first house in the early Eighties, the best mortgage we could get was a 14.25% variable, fixed for one year—we had a lot of sleepless nights but fortunately mortgage rates started dropping and we were able to re-finance out of it before we got hit.) 

But nobody seems to learn from these cycles.  Here I’m not putting blame on the home buyers, I’m putting blame on the lending industry, because a lot of them, primarily the sub-prime mortgage brokers and the secondary market, were not acting prudently.  They really should have known better that the market would turn eventually, and then they would be caught with all these defaults.  Especially when a lot of these new variables had artificially reduced initial “teaser” rates, and you knew they were going to take a substantial jump no matter what.  So I really don’t feel any sympathy for the sub-prime lenders that are now filing for bankruptcy.  They were out to make a quick buck off re-selling the loans to the secondary market, and the secondary investors did not do their homework in terms of due diligence and underwriting investigation.

YOu know, the point in this essay could be made of many aspects of out present culture. The social goal can be discribed as a way to mitigate bad effects so that transgressor can avoid the pain of responsibiity. The emphasis is on the latter part of this practice. So, the current stink here in Maine about giving contraceptives to 11-12 year old girls arises from the desire to keep them from getting prregnant and all the guilt, pain and trouble that is attendant on the misery. Of course, this will teach the girls only one thing, that the consequences of bad behavior can be avoided. The rule is, you can play and not pay. It would be hard to find a worse possible lesson, but this never seems to occur to the liberal mentality. Well, but should those girls who are playiing with sex be allowed to get pregnant. If their parents have taught them so little, the answer is Yes. Dance, and pay the piper is a rule that every real adult has to learn. LM

The burned hand teaches best.