So as of last Friday, the home buyer tax credit can rest in peace. I never got the feeling that it ever really took off like we expected. I had some clients that took advantage of the $8,000 credit to provide or beef up down payments, but I think they would have purchased a new home anyway. The credit just helped them along. That means that in many cases, all we did was spend tax dollars for a non-stimulus, which is typical of government intervention.
Now that we have a largely unpopular healthcare reform bill in place, we are moving on to "financial reform". It seems to be a popular notion that we need to hack up the rules regarding lending practices so the "fat cats" don't rip us off again. At the risk of taking an unpopular position on this, I disagree.
I do not think financial reform is necessary, and the idea of increasing government control over our money supply (and it seems everything else lately) concerns me. What caused the economic crisis was not lack of rules, it was a failure to enforce the rules we already have in place. Not only were they not watching out for questionable lending practices, our government geniuses were actually endorsing and encouraging lenders to make stupid loans. The notion that everyone in America should own a home was ill conceived, and can be attributed to bipartisan support by more than one administration.
In speaking with our local lenders, I really believe they are under considerable constraint right now. On top of that, most of the banks in north Georgia did not receive TARP money, yet they are the ones who are loaning money to keep businesses afloat in our communities. I don't see Goldman Sachs running down to Jasper to make a $10,000 payroll loan. That is the local bank's job. They assume all the risk in doing so, simply because if hometown businesses fold, the entire local economy goes up in flames taking the community banks with it.
While I really don't think we need any more controls, if something needs to be reformed, it should be restricted to the truly "fat cats" which make up the Wall Street bunch. They are the ones who caused it. They are the ones recording record profits at the taxpayer's expense. The community banks just got caught up in their wake of destruction.
While financial reform might be a popular concept for the times, I believe we need to consider that the devil we get may be worse than the devil we've got. Piling more bureaucracy on top of itself is not usually a good idea. For one thing, it's expensive. Furthermore, it frequently just complicates and impedes the system, while not improving the situation. An example might be government's feeble attempt to stem the problem with foreclosures. Oh, they'll eventually try to take credit when the problem takes care of itself. They haven't been successful because the fact remains they are just not good at that stuff.
My hope is that everyone will temper their thoughts and measure their words, before jumping onto an emotional bandwagon designed to lash out at an ill conceived enemy.
Comments(1)