The Mortgage Meltdown

The headlines of a recent Wall Street Journal article read: "Fed Races to Rescue Bear Stearns in Bid to Steady Financial System. Though seeing a large financial institution like Bear Stearns in such a financial quagmire is never pretty, I think what irks me more is that my tax dollars are bailing them out when the average homeowner who is in danger of losing or have already lost their homes to foreclosure have never even been offered a safety net -- let alone a rescue by the feds.

I recall listening to an interview on the television recently, where a reporter had a lengthy conversation with the CEO of Bear Stearns. Schwartz was so arrogantly certain that the risks his company was taking in the mortgage lending market was the right thing to do, that he bullishly insisted that his company would continue investing in these markets as aggressively as they were in other investments. He ranted about how solid their balance sheet, income statement and cash flows statements were. He even indicated that their cash reserves were so solid they would be able to withstand any fiascoes down the pike relative to the mortgage meltdown. Well--here's the fiascoes so I guess this was just a pack of lies!!

Many financial institutions rallied heavily in Washington DC during the late 1990's and early 2000's to change the laws involving credit and consumer debt. They helped lobby for the legislation that changed the laws around bankruptcy as well as increased the leverage and power of the credit industry in general, enabling these institutions to borrow heavily from foreign banks, charge outlandish interest rates on everything from credit cards to adjustable rate mortgages and create a nightmare for individuals smothering in debt with the bankruptcy laws.

I watched in horror as all of this was unfolding while I worked in management for a very large bank at the time and wondered then as I do now -- how President George W. Bush sleeps at night? He brazenly opened up the Saturday morning news smiling about his triumph in using more than $30 billion dollars of taxpayer money to save this company from its own mess, yet, doesn't seem to be able have a CLUE as to how to save the homes of thousands of American citizens who are losing the jobs and homes because of the careless arrogance of these companies.

To add fuel to the fire, last night's news indicated that the CEO's who head failing company's like Schwartz's, including the heads of American Express, and others, walk away with multi-million dollar parachute packages -- in the midst of the company losing billions of dollars. How can this be happening? What is going on today and why isn't there any way the American public (especially the American taxpayer) able to have a say in these matters?

I get very frustrated when I read about the excesses of the corporate elite at the expense of the employee, homeowner, investor (though the investor should be aware of the risks involved), and any other relatively large body of people with so little voice in these matters. I agree with Lou Dobbs --" Isn't anybody entitled to good government in this country?" Or have we all gone mad in our zest to please and appease corporations?