Earlier today, Alan Nisen posted a blog about who was to blame for the sub-prime crisis. He very cogently spelled out the responsibility of the mortgage brokers, the banks, Wall Street and the Government. Certainly, each of these group have their share of blame. However, some of the responsibility also has to lie with the consumer.
Granted, some homebuyers were naive and duped into believing they could "buy now, pay later", However, I'm sure many realized, with little income and no assets, they would be turned down if they applied for a loan to buy a car. Yet they chose to believe that they could purchase a house and through appreciation, it would pay for itself.
I think this country needs a reality check. I realize home ownership is the American Dream, but it used to be understood that, before you could purchase a house, you had to be able to afford it.
The delusion is not limited to the low-income, poorly educated segment of society. I've winced when supposedly intelligent people have told me of their plans to take a seminar to learn how to buy and sell real estate, with no money down. I'm sure you've all seen the ads.
"Two years ago, I only had $1.98, to my name and now I'm worth millions. You too can make a fortune in real estate. Simply join the thousands of others who have learned to live the good life, by signing up for my seminar."
I'm astonished that they don't recognize the similarity to the old "snake oil salesman." Is the dream of riches and the desire for instant gratification, so strong, that we, as a society, choose to view lottery tickets and get-rich-quick schemes, as the answer.
Unless we get back to the strong work ethic, that built this country, this will not be our last "crisis."
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