So I was coming home tonight, listening to the radio. I heard a story that said things were almost in place to lend $150 billion dollars to seven banks, as part of the overall $700 billion plan to rescue America from the financial crisis. The story went on to say that the idea was that this would give the banks enough new capital to be able to return to normal lending practices, and calm the nation's fears. WAIT A MINUTE!!! Isn't "normal lending practices" what got us into this mess? For the last several weeks, we have heard over and over that the root cause of the crisis is years of banks making sub-prime loans to people who can't afford them, who don't keep up with their payments, and eventually default on the loan. So now we're giving $150 billion to those offending banks so they can continue the practice? What am I missing?
No comments:
Post a Comment