Way back when.......

Richard, I'm not advocating abdication of responsibility, however, in all fairness, we must remember that back in those days, things were radically different.  First, we had real loan officers, with real lending authority, not salespeople who call themselves loan officers.  Next, that lender was, almost always, selling a fair product at a fair price - they acted with integrity.  Finally, it would behoove us to remember that there have been other periods of time in our country's history marked with high default rates.

I'm not arguing that as a group our work ethic has not decayed considerably through the years - it obviously has.  Fifty years ago, however, our economy was flush, and a person could work three jobs, because there were jobs to be found.  Many people today are unable to find even one job, let alone three.  The cost of living has outpaced peoples' incomes for some time.  For many years, one man, working one blue-collar job could support an entire family, including a mortgage payment.  Today, that is not usually the case.

In the old-school-small-businessman model it was perfectly acceptable for a family business to start-up, stabilize and be run for multiple generations at that relatively stable level.  The new way of doing business, it seems, is to demand ever-increasing profits.  Making a good return on an investment of capital and labor is no longer considered acceptable.  We can call it anything we want, but the sad fact is that as a society, we have allowed greed to dictate our behavior.  Unfortunately, this model will eventually prove itself to be unsustainable, as we are now beginning to see.  What do you think will happen to Wal Mart's pricing model if there is no longer any competition?

The borrowing public has been fleeced by the lending industry for years, (as have we).  The industry has reached a tipping point.  People are now revolting in the only way they know how.  It will get worse before it gets better.

Aneother thing to think about is, way back in the 50's and 60's we did not have all the safety nets in place. There was less incentive to live on the dole, so to speak.

The draft was sucking up a lot of the excess workers, and we were fighting wars in Korea and then in Vietnam.

Having children outside of marriage was less acceptable, so there were fewer of these.

The global economy had not yet arrived at our doorstep, so mom and pop businesses had a much better chance of survivial. We still had the dominant economy in the world, and we were helping many of the future WalMart  product prodcucing countries to develop their own systems.

This help we gave to others was not all that unselfish tho, because that help was given in the form of credits and subsidies, not cash, that were tied to those countries' buying their machinery and raw materials from us. That gave us a way to dump obsolete machinery and increase out exports.

There were foreclosures back then too, but housing prices were stable or increasing and it was usually possible to get out from under a mortgage without too much damage to the lender or the homeowner. It was not until the government decided that "everyone should be a homeowner" that we started having problems.

June Cleaver just did not have today's kinds of problems.