A Few More Simple Questions

Last Friday my post was titled A Few Simple Questions, and - as the title implies - it posed a few simple questions about the current economic mess and the accompanying attempts to "rescue" the economy. Today, I have a few more simple questions for the financial 500-pound brains who brought us to this point:

1. This one actually comes from my friend and commenter Katherine, who in a comment on yesterday's post wrote: "I also am not seeing the dire "no credit available" warnings that are being batted about. Why do I keep getting offers for more credit cards and un-asked-for increases to my credit line?" Why indeed? This question is so simple and obvious that I'm surprised I didn't think of it. For months, as the economy has imploded and credit supposedly has vanished, there has not been a single day on which we have not received unsolicited offers for new credit cards. Where is this credit coming from? Hmmm...

2. The major factor in the collapse of the economy is said to be the large number of "subprime mortgages" - those issued by unscrupulous lenders to dumb people, then bundled together as exotic financial instruments and sold to credulous investors looking for a fast buck. Okay, I can accept that. I guess. But how many of these bad mortgages must have been issued to sink the world's largest economy? What percentage of the mortgage market had to be toxic to cause a problem this vast and all-encompassing?

3. Why do we allow Congress to pass well-intentioned, yet stupid laws like The Community Reinvestment Act of 1977, which encouraged lenders to provide mortgage loans to people who otherwise couldn't afford them? It seems that if anything contributed to the development of the subprime mess and the burgeoning number of foreclosures, it's this. Note to those designing the "economic rescue plan" - don't rescue people who took out mortgages no sane person would have wanted and no sane lender would have approved in the first place.

Just a few more simple questions for our "leadership." Not that I expect any straight answers, of course.

What I expect is more clouds of partisan, finger-pointing, politically theatrical hot air coming from Capitol Hill.

I don't think I'll be disappointed. In the words of the late Jerry Reed in his classic song The Crude Oil Blues: "...he who expected nothin' ain't gonna be deceived."

Have a good day. More thoughts tomorrow.

Bilbo