Wall Street gambling

Letter to the Union Tribune (unpublished, of course):

The Goldman Sachs case allows us to step back and assess the American financial sector's role in business. Once upon a time, Wall Street's primary purpose was to raise money for productive industry. But now, it has been turned into a casino. Credit default swaps? Derivatives? Gambling, pure and simple.

AIG bailout billions to Goldman Sachs

Letter to the SD Union-Tribune (unpublished):

While the AIG witch hunt continues, the real villains go unnoticed. Why hasn't the government allowed AIG to fail? Where have all the bail-out billions gone anyway? Let's see -- to whom did AIG owe money? Goldman Sachs is top of the list, and Goldman's CEO Lloyd Blankfein was present when the Feds made the decision to save AIG. Rescue Czar Hank Paulson also was once top chief at Goldman. Not surprisingly, a large majority of rescue money has passed straight through AIG to Goldman and other connected financial institutions. The fix was in.

No free market?

Letter to the SD Union-Trib (unpublished):

Almost 20 years ago, Japan entered a deflationary slump. Piously wearing the mantle of capitalism, America sent economic experts to advise them to take the hard medicine, let the bad banks fail, allow the free market to work. How ironic now to see the U.S. government spend hundreds of billions to prop up our own failed lending institutions. Apparently we don't practice what we preach.

No bail-out

Letter (unpublished) to San Diego Union-Tribune:

No Bail-out! Why should we trust this "sky-is-falling" administration which previously duped America into a failed War on Terror while allowing little-to-no debate. Now we're to have a War on Falling Prices? Throwing more money at the "problem" is analogous to opening a new bar tab for a chronic drunk. Where does this $700 billion come from anyway? Each additional dollar created by the Fed devalues all existing dollars in circulation. What we really need is a War on Debt as government and citizens learn to live within their means.

Government to prop up housing

Letter (published) to the San Diego Union-Tribune:

I agree with what Housing and Urban Development Secretary Steve Preston said last week: “Taxpayers should not have to absorb preventable, foreseeable losses.” Lenders and borrowers deserve to reap what they've sown. No money down? Liar's loans? Revolving lines of credit? Banks should have known better.

Similarly, I have little sympathy for “naive” buyers who used nonstandard loans to borrow more than they could afford, assuming that rising values would allow them to refinance. Others used their homes as ATMs, pulling out equity to live beyond their means. All are learning property values don't go up forever.

Plenty of people sat on the sidelines waiting for the housing bubble to end. Why should government prop up housing prices? Whatever happened to personal responsibility? Do we live in a socialist or capitalist nation? Let the free market reign.

BRENT McDONALD
San Diego

Union-Tribune link

homeowners bail-out?

Letter (published) to the San Diego Union-Tribune:

Regarding “Help for Homeowners?” (Business, April 12):

So now the Senate is looking at ways to assist homeowners who were “sold mortgages they could not afford.” Ridiculous! Nobody forced these folks to buy anything. In many cases, borrowers with shaky credit lied about income to qualify for more expensive homes, driving prices ever higher. How does that merit a federal buyout?

Adjustable rate mortgages are inherently risky. People must take responsibility for their actions. There has never been a guarantee that home prices would rise forever. A predicted 2 percent to 3 percent decline is peanuts compared with the double-digit increases of the last five years.

I'm one American who balked at absurd home prices and instead worked diligently to build up a nest egg in anticipation of the eventual correction. The government should not be in the business of propping up inflated home prices.

BRENT McDONALD
San Diego

Union-Tribune link

housing affordability?

Letter (published) to the San Diego Union-Tribune newspaper:

During the current mayoral campaign, I've heard much discussion of the city of San Diego's pension deficit but scant mention of the region's ongoing housing affordability problem. Supposedly, San Diego has declared a housing "state of emergency" – shouldn't this issue therefore be debated by those who would take the reins of America's Finest City? 

I am an engineer with a master's degree and steady professional employment. However, I cannot begin to afford mortgage payments on "entry-level" property in this city. As a surfer, I was a Frye supporter until I heard her say the solution to the housing crisis was for people to "get better jobs." Sorry Donna, that doesn't cut it. The only real solution is to increase supply through upzoning and infill.
 

BRENT McDONALD
San Diego

Union-Tribune link