March 8, 2009
I’m Just Some Young (dirty) Blond Chick, What Do I know?

Posted at 4:22 pm, in: Congress, Economic Crisis, Economy, Personal Responsibility

When are politicians going to learn that if banks aren’t giving loans (extending credit), it’s probably with good reason? Banks make money off of lending. It would make sense, if they aren’t lending, it’s because the person who is asking for the money isn’t creditworthy. Otherwise, why would they prevent themselves from turning a quick buck?

Senator Lindsay Graham (R-SC) (linked to that McCain guy. No, not The Other McCain) in his appearance on Meet the Press this morning was asked if more stimulus was needed for this economy, and this was his response:

I’ve got people in South Carolina who are thinking about buying a car but are having a very difficult time getting a car loan. But their biggest fear is they think they may get laid off in the next six months. So if we could get credit flowing in the consumer areas, I think it would stabilize the economy more than anything else.

How exactly is getting credit flowing to unworthy borrowers going to stabilize the economy? I’m just some young (dirty) blond chick, what do I know? I may be wrong here but, it seems to me, if your biggest fear is that you think you may be laid off in the next six months, you probably shouldn’t be thinking about buying a car. I’m just saying.

I understand that we are having some “economic difficulties,” to say the least. Here’s the thing, I don’t seem to be having any problems getting credit. In fact, just last week one of my credit cards increased my credit line without me requesting it. I attribute this to the fact that I live within my means and pay all of my bills in full and on time. I could be wrong, though. It might just be because I’m white.

Here’s what I think is happening. Those who are creditworthy will receive credit for whatever they are deemed capable of paying back. If you are try to buy a car when you think you may get laid off within the next six months, I have a sneaking suspicion, the lender may have that same inclination about your fate. In this event, if they looked into their crystal ball, they might deny you for that loan.

For example, banks (now, members of Congress like B.Frank) used to decide who was creditworthy when it came to buying houses. Then, Congress stepped in. There were people who wanted to own a home and were denied based on their creditworthiness. Then Congress decided the American Dream is really an American right and created a situation that allowed banks to loan money to borrowers who should not have been buying a home, or should have been more modest in their home buying. I can’t remember how that movie ended, exactly, but I’m pretty sure it wasn’t a happy one.

Spoiler alert: banks are better at determining who is creditworthy than politicians on Capitol Hill. People who are worried about losing their job in six months have no business buying a new car; just as those who bought houses over the past couple of years who couldn’t afford them should have either a) bought more affordable housing or, b) continued to rent.

The problem, at this point, is not credit. The market is operating exactly how it should be in the current economic climate. The problem is the people and the politicians who insist we can spend our way out of this. If you can’t afford something, don’t buy it (yes, Congress, that means you, too!). ! It’s as simple as that. The beauty is, it has always been that simple. The shocker is, no one seems willing to accept this.