9/18/2008

Bailing out Greed

Posted by Kevin |

I'm as weary and fearful as anyone in America right now, as it relates to the condition of our economy. But what bothers me to my core is how we are now bailing out the greed of companies and their leaders.

Now I'll admit I don't know enough to say that these business leaders aren't having to pay their multi-million dollar bonus' back, but I assume at best, it's a smack on their hand.

I won't make excuses for the people who have lost their homes and their financial credibility (not to mention their security). Several people very close to me have lost their homes in the pass year and about a baker's dozen have foreclosed in my sub alone - but I also will not make or accept excuses from Fannie Mae, Freddie Mac, Bear Sterns or Lehman Brothers for the greed that got them in their own financial mishap. So while my friends live without credit and look down the barrel of the years it will take to regain what they lost - these companies get billion dollar bail outs for the sake of the public's good. And it was the public's good that they overlooked as they pursued their own profitability.

It bothers me that now the tax dollars of the American worker are being used to bail out the greed gained by overextending those workers. The issue isn't just economics, it's also about morality.

A related post put it this way, these CEO's are pursuing "huge personal bonuses and escape hatches while destroying the lives of people who work for them. We now need wisdom from the economists, prudence from the business community, and renewal courses on the common good from the nation’s religious leaders."

For further reading, a good article is locate right here.

8 comments:

Francois said...

Great post Kevin. Yeah, tough times world wide at the moment and you are right in saying that greed is at the root of the problems.

I must add though, if the Fed didn`t bail out AIG, the impact would have been massive throughout the world. As things stand now, it looks like it had the desired effect. What I would like to see is that the US government take the guilty parties to task. This is the only way of preventing a situation like this from happening again. Although, I reckon the face of the financial world changed forever during the course of this week.

allie said...

It must be very hectic to have the results of corporate greed so in your face; right in your neighbourhood, with people you know.

There must be some serious prayer going on right now!

Totally agree wuth Francois' comments.
Well said, both of you.

Ryan Billings said...

While I agree with pretty much everything you said regarding the corporate side of this mess, it is also important to see blame in the people themselves. I can't speak for your friends, but the people I know are in this mess because THEY are greedy.

Going out and purchasing a $300k house on $50-60k income is both irresponsible and unsustainable. Blaming the system is not enough, we have to look at ourselves and ask are we going to be held accountable for our actions.

You know how much you can afford, but somewhere in there the lust for square footage, 3-car garages, and granite counter-tops takes hold. This is whats truly wrong with this country. This idea of self-entitlement and that we somehow "deserve" all these nice things - our crazy over-consuming economy.

When the lender says "HEY, you qualify for $300k!" "and guess WHAT? We don't even need to verify your income!" and you run the numbers and its half of your income a month. Warning lights should go off, and you should get a mortgage that is more manageable.

Now, you and I are both going to have to pay for this (where do you think the money comes from to bailout AIG, Freddie, and Fannie?). Actually, China is probably flipping the bill for now.

JUST BECAUSE YOU CAN, DOESN'T MEAN YOU SHOULD.

Kevin Davis said...

Ryan - I'm with you and was not trying to skate by the responsibility of the individuals. My focus was on the immorality of the greedy 'man' on top of these companies. I don't know enough to say with confidence, but I doubt these CEO's and business leaders are losing much - I could be wrong but it's messed up. It realy is the same thing. People get caught up in wanting and overextend themselves and then these companies build business models on how to take advantage of them - the credit card industry wrote the book.

Francois and Allie - I love your South African perspective and comments. I'm glad we've met and that you are apart of the conversation. And I totally get that we (the American Gov.) had to bail them, the global impact, the unemployment rate here - the common good and global economy must be protected. I just feel that in doing so, we must also address that had these companies had the public's interest in mind they wouldn't have designed their profitability to depend on ripping people off.

Ryan Billings said...

I know, I just get pissed that people are so out of touch with financial reality and realize that they are being taken advantage of.

Check your email.

pisceshanna said...

Bush made it clear when he got elected that he would take care of the people who took care of him, ei: the rich and powerful. I hate feeling so powerless, watching our country become the economic disaster it is now. Its really disheartening.

Thanks for stopping by my blog! Nice to meet another 26 year old blogger.

Bob Smith said...

Ecclesiastes 5:10 (NIV)


10 Whoever loves money never has money enough;
whoever loves wealth is never satisfied with his income.
This too is meaningless.

Greed from the top to the bottom - It's so sad that so many people must live beyond their means -

Kevin Davis said...

Here's an article that adds to my frustration.

http://tampabay.bizjournals.com/tampabay/stories/2008/09/22/daily36.html?ana=yfcpc

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