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So, Is America And The World Marching Toward Doom Or Not?
Written By : Melissa Clouthier
September 30, 2008

The fact that I can’t answer the question clearly after being told by everyone that the world was imploding is irksome. Either this financial crisis bad but we’ll make it, or it’s bad and it’s going to suck the economy down the hole. And why is consumer confidence up? I have an answer: gas prices are declining. Yes, it’s that simple.

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So the Senate will vote tomorrow and McCain and Obama urge the bill’s passage. Hold on professor. Why? From The Hill:

Usually, constitutional issues prevent the Senate from acting on legislation that involves tax issues — any such bill must originate in the House. However, the Senate can circumvent the the rules by taking up a pending House bill, stripping it and putting in place substitute language. Senate Banking Committee Chairman Chris Dodd (D-Conn.) had cast doubt on that scenario after Monday’s failed House vote, saying it would only “compound” the situation, but others, such as senior Banking Committee member Robert Bennett (R-Utah), confirmed it was a leading idea.

“Anything that’s within the realm of the rules is within the realm of possibility,” Bennett said.

Some observers said a successful Senate vote could be an important tool in persuading wavering House members who may be considering changing their vote.

So Senators think there’s a problem and it’s bad enough to skirt the constitution to address it. Will someone please explain it to me? I would like something to happen so average schmucks don’t end up homeless–but that isn’t the Paulson plan.

Michelle Malkin is in the other camp and says,”Today’s stock market drop is a record point drop, but does not even crack the top 10 single-day percentage drops in American history.
Let’s stop pounding the panic buttons.”

Time Magazine explains some of the subtleties, but after reading the article, I get the impression that banks are being more sober about their lending. That, to me, is a good thing.

Some personal anecdotes:
When we started our business, no one, not one bank, would give us money. So, we had to use credit cards and roll our build out into our lease agreement. We bartered the painting and we did some of the interior work ourselves. We didn’t qualify for credit and we were a good risk (at least to us). About a year after we had signed our lease, the building owner had worked with our agent and had never met us. We looked so young, she was shocked. She would not have leased us space had she seen us. Good thing she didn’t see us!

When we bought our home, our agent found the most generous loan officer he could find. There is no question that he finagled a deal for us. Frankly, I was shocked we were loaned any money at all–we had copious student debt and no assets besides a diploma. It was an FHA loan. Everything worked out.

When we bought a bigger home, the bank approved us for more than we could afford. I was dismayed. And, after asking a million questions, we settled on an old-fashioned loan and bought a home within our means. But the process was confusing and there were many choices. An acquaintance of mine actually was lied to by the bank officer and signed a loan that increased in payments by $200/month within a year. The loan was changed and refinanced, but this was a person who understood finances and could pay. Predatory lending is not a myth.

Still, Americans are too used to living beyond their means. Needs are confused with wants. People believe that they must have cable and iPhones and dinners out and whatever is their personal passion. And now, people can’t make their payments? What happens then? Well, unfortunately, banks gave many bad loans to people who can’t pay.

Some people just need time. A reader of mine, 81 years old, lived through the Great Depression, and remembered that his family was given a year of interest only payments so they could keep their home while their father searched for a job. But joblessness was the problem then, it isn’t now. Yet.

Some people are buried over their heads because they lived beyond their means. Some businesses are the same. They will fail. The pernicious thing is that lenders had the government tighten up requirements filing for bankruptcy while they want money loosened as they themselves fail. It is this atrocious behavior that sickens Americans.

And so, as another reader wrote, “then let’s eat beans and rice” until it gets better. If Americans are willing to endure this, then why is the Senate voting to ostensibly stop it, if it can even be stopped? And should it be stopped, even if it can be stopped?

Cross-posted at MelissaClouthier.com

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