AIArchitect

I think the fact that it’s an election year has influenced the federal government’s actions in this financial crisis. I know voters have no direct control over the agencies that make these bail out decisions, but imagine the rage that would have rained down on the Fed from Capital Hill if these institutions failed and more people lost their homes, pensions, etc. If the financial system completely falls apart in October, everyone on the Hill loses their job in November. Now at the very least, Paulson and the rest of them can tell Senators and Congress members that, “Hey, we tried to do something that would stop you from looking like a dupe in front of your constituents.” Because all the cards are on the table, there’s an increased need to tell voters what they want to hear, and to act in a way that seems helpful, even though it may not be.helpful in the long term

If you want to dig into this issue, you might want to look at Democrat Barney Frank's blocking of efforts to reform Fannie and Freddie going back to 1992.

Name calling probably should be avoided here - it accomplishes nothing and reflects badly on the AIA.

BTW,is it greed that encourages 401(k) participants to place their trust in stock funds in order to secure their retirement?

I don't think we are interested in socialism in the United States.

The whole situation is ludicrous. This mess with Fannie and Freddie is 10x worse than Enron. Where are all the hearings? Congress is too busy covering up their own despicable actions in this debacle. This has been a long time a-coming.

Just look at the political contribution lists from Fannie and Freddie for the past decade or so and then you'll know why this is all being swept under the rug.

There are those that should pay for this breakdown - and it shouldn't be us plebes and subjects of the government (like the stellar Congress thinks we are).

Asking Congress to intervene is like asking felons to sit as the jury on a murder trial. How about an independent prosecutor to look into this and call some of these untouchable lawmakers to task? I think we're at least owed that.

I would like to understand the role that the national homebuilders had in creating this crisis. It seems that every time that I see a news piece about a family in foreclosure that it is in a new cul-de-sac subdivision on freshly plowed farmland. I can only imagine that the builders and their lobbyists were key players in this - at least in as much as pressuring the lenders to offer these irresponsible loans to millions of unqualified borrowers in order to move their product in the huge volumes their business models require. Bottom line is I think there is an environmental aspect to this issue that has not been explored to my knowledge.

There is nothing wrong with the capatilist system, and the LAST thing we need is legislative intervention. Don't they nearly always get it wrong before we get it worse?

What we need is to let things, and folks, succeed or fail on their own merits, and to (gasp) hold some decision makers accountable. Failure is part of success but if failure has no penalties then lessons are not learned, and then repeated. My own financial health may be at risk, but I don't believe our Federal tax dollars should be used to bail out investors who didn't get it right.

We have now been renting for the past 12 years; not by choice, but because the idea of entering a housing mortgage market in such speculative times without the necessary, prudent financial foundation did not seem safe.

Now, the thought of our tax dollars being spent to save all those who made the choice to gamble and who lost is not sitting well.

And the mortgage industry is just the latest example that an "un-regulated" free-enterprise system doesn't work. It's simply a matter of what degree of regulation is necessary to protect the public from the captains of industry.

It is not right that the government should tax us to bail out failed ventures. Then, on top of that mistake, the question is why are some getting bailed out and other are not? Common sense tells you that there is something fishy smelling about all this. Ross Perot said years ago...."there is a giant sucking sound" and it is our money going down into the deep pockets of the very few!

point of reference for this year's presidential campaign:

Congressional Record - Senate
May 25, 2006
Page S5217

center column
specifically the last full paragraph

URL:
bulk.resource.org/gpo.gov/record/2006/2006_S05217.pdf

Thomas Sowell's article conveying his thoughts on the origin of these government-sponsored entities' (Fannie & Freddie) difficulty:

jewishworldreview.com/cols/sowell072208.php3

There's a candidate that is looking out for us.

ARM's, perhaps better described as Exploding Loans, have never been safe, or a good financing plan for the home owner. It is now clear that they are simply bad business in general, for both the banking industry and the national economy.

The dollar is getting weaker every month. Since we are in the same sinking boat there is no choice really but to bail them out. We need to outlaw exploitation disguised as home ownership opportunity and replace that with a realistic and fair opportunity for the American worker to own a home. Why is it really so expensive to buy a home anyway?

American workers are chained up to so much debt that it resembles the indentured servitude of two hundred years ago. The debt burden cripples America. We need more conservative fiscal management as a people. The nations congress has an obligation to engage in making more practical banking legislation to empower small business and small business start-ups and reduce the banking industries exploitation of the American people.

Truth is many of us saw this one coming long ago.

TLW

Until recently I had decided to sit this election out. It seems no politician and party (I'm independent) looks out for anyone. They only look out for their own pockets.
This whole crisis has me researching what happened because this affects Architecture and Construction so imensely, that I am considering going into another profession. After discovering that one of the people running for President had Jim Johnson on his V.P. search committee, who collected MILLIONS in spite of the fall of Fannie Mae because he was the CEO of that establishment, has sent my anger boiling. Not only that, one of the Presidential candidates who has been in the senate for only 4 years has already reached the high position of No. 2 as receiving the highest monetary donations to his campaign by who else? FANNIE MAE AND FREDDIE MAC!!! All this was started during the Clinton Administration and was kept going by our government, repubs and dems alike. The other candidate has ties to the lobbyists of these now semi-nationalized industries and they contribute mucho dinero to his campaign. But in the same token in 2005, he tried issuing legislation to reform this same industry that his lobbyists support, but to no avail. So what is a voter to do? Hold our noses and vote for the lesser evil? I have a problem with Americans not taking responsibility for their actions in signing papers that would eventually make them go broke. America is BROKE. But the solution is not taxation, but cutting government and it is going to hurt. We have one party wanting to nationalize healthcare, business, etc. and the only way to do that is to raise taxes which will definitely make our economy deflate even more than it is now. Americans are stupid and materialistic. To spend ourselves into this debt crisis only reinforces that fact. Now, those of us who are responsible will have to bail out the STUPID, GREEDY jerks who don't know how to live on less than they make. Personal responsibility has to come first and jail for Fannie Mae and Freddie Mac, Lehman Bros., AIG,etc. CEO's should come second. As you can tell I am angry. We should all be angry and stop complaining and do something about it. As a famous racist preacher once said, "Americas chickens are coming home to roost!"

First of all, I'm not quite sure who is being called the "morons" here - is it the mortgage lenders or those seeking the loan? - because if it's the latter, I'd question where you, writer, live that you can make a decent wage as an architect and be able to afford a house within driving distance of your job. Clearly it is not in California and I would hazard to guess not in the larger cities in the northeast like NYC and Boston. Some of us had to take those loans just to be able to have housing because rent and mortgage were the same price - exorbitant.

That being said, let's get real here. The "bailouts" have been happening on a consistent, though less noticeable, grand scale for DECADES. Not just with the oil companies, which hopefully everyone here is aware of, but also with the auto industry, the chemical companies, and several other influential lobbying industries. It's called tax breaks, incentives, "assistance" or any other tame sounding word. Why is GM getting bailed out? Why is Fannie Mae and Freddie Mac? Would the government bail out my business if we created situations where we set ourselves up to fail and not address market demands? Surely not! But then, why should the government care about small businesses when they have so many friends in big business?

And if you want to start a conversation on the waste of our tax dollars, why don't we start with all of those commercials on TV for the US military - during the Super Bowl, during the playoffs of every major sport, and during every other major prime time event - you know, the ones that reportedly cost millions of dollars for 10-15 seconds of air time? Yes indeed, my hard-earned tax paying dollars at work for a 30-45 second commercial which tries to recruit our sons and daughters to fight in wars our own government isn't even sure we should be involved in. There's a brilliant use of tax payers' money!

Lastly, I cannot agree more with a previous poster who said that name calling should be left out of all AIA conversations as it just gives us a black eye. Enough!

I apologize for the "stupid" comment and will revise my comment to say, "ignorant". People who are ignorant of the ramifications of signing legal documents they don't understand, should not own a home. If owning a home is cheaper than renting, then you need to move to another part of the country and vote for people who won't tax you to death, which is the problem with large cities whose political machines run everything. If your salary isn't enough as an Architect, then do something about it. I'm an Architect in the fourth largest city in the country, I make a great salary, and live right in the center of the city, which is two miles from where I work. Americans need to take personal responsiblity for their lives and stop living on credit. Americans depend too much on entitlements from Uncle Sam, instead of digging in and doing it all on their own. Too bad we don't have any leadership in Congress or the Presidency, because they have sold out the principle of rugged individualism, for that of the government will do everything for you. America is in a shambles thanks to our own government.

Dear so-called capitalists... Fannie and Freddie ARE socialism (gov't backed but "private" securities amounting to $5 trillion... hello!) and have been from their inception. The financial success since the Great Depression has been founded on gov't backing.. FDIC, for example. So please drop the greed-complacent Ayn Rand idealism. And those of you pointing out that McCain has been fighting the financial giants all along are apparently missing the point that, though he may have had his heart in the right place, he didn't have the ability to change anything (or not enough) in his many years in congress. And to those of you who say: why bail anyone out? Look deeply at your own greed, your own anxiety, the drivers in your own life, and you will find the answer.

The retail and credit industries have successfully taught America that it is not only OKAY to purchase things that we don't have the money for, but we actually NEED and DESERVE to have the things we don't have the money for. Its ludicrous how many Americans are riding the debt wave and trying to ignore the reality that they're just one or two missed paychecks away from their whole house of cards falling apart.

My husband and I got married 2.5 years ago and were asked dozens of times if we were going to buy a house right away. When we responded "we just graduated college - we don't have any money!" people looked at us like we were aliens - they couldn't believe we thought you had to have MONEY to buy something! Several encouraged us to go the 0% down route, but we have something different in mind - the 100% down plan. Yes, your grandmother may have told you about it: its called saving up and paying for it. During these short years while we don't have kids and can both work full time, we're living frugally in a nice but inexpensive apartment and the savings is mounding quickly. In 2.5 years we've paid off $15,000 in school debt and saved $50,000. In a couple more years we'll be able to buy a starter house with cash, which will free up even more of our take-home pay to keep saving for the next, larger house. We could live the rest of our lives without ever paying a rent or mortgage payment.

(And don't be led to believe maintaining a mortgage saves you money because of the tax write-off. Say over the life of your mortgage, you get 25% of the cost of the house back in tax write-offs. But with the interest you pay on your loan you'll pay 3.5 times the cost of the actual house! So, does it make sense to spend 350% to get the opportunity to save 25%? If you need a tax write-off, give the money to your favorite charity instead of to the bank.)

It is my hope that this whole crisis will wake Americans up to the reality that living on more than you make just doesn't work.

For the non-voter who will not vote for Obama because of campaign donations....Obama received over $100,000 from INDIVIDUALS that worked for FANNIE MAE AND FREDDIE MAC, not the company itself! Get the facts straight! The other side of the coin is that many Republican Senators and Congressman are major stockholders of FANNIE MAE AND FREDDIE MAC. Maybe so many people are donating to Barack Obama because they believe in what he stands for!

Capitalism and a democracy only work in a society with a moral base. The current financial crisis is the product of our shared weakness to take all we can in the way of material gain. Government and a new President can only point the way. They cannot erase the problem. I hope that we as architects under the leadership of the AIA can identify, address and contribute to the correction through the promotion of the design of environments that meet human needs and fit within the context of our natural environment.

As we can see here there is plenty of blame to go around. Responsiblity and accountability are two key issues in all of this. People who did not have the money for their lifestyle are as guilty as those who gave them the credit line in order to increase their year-end bonus! Politicians are led by lobbyist who are hired by corporations that have been takers in our society. As usual in this American democracy the people who have been responsible in their lives are the ones who will be paying the tab for this bailout. When we begin to recall politicians and hold them responsible for their turning away and letting corporate greed punish those who will be bailing them out you will begin to see a difference in your communities, states and Washington. But if we continue to allow them to cater to lobbyist, handout our tax dollars to greedy corporations and cave in to the influence peddlers we can expect more of the same. Politicans know that once the dust settles and the headlines change, us STUPID responsible citizens will forget about this and it will be back to business as usual in Washington. But when we finally get our fill of this and actually hold these career politicians responsible to us instead of the influence peddlers that have infected our political system we will not see real change in Washington and our own states. All they need us for is to furnish their money and a vote. Deregulation of these institutions means that the greedy Wall Street executives make their own rules.

Were Fannie and Freddie regulated or unregulated?

bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0

The primary reason for the $700 Billion payout to the failing investment banks is to prevent the economic failure of financial institutions that would be unable to loan money for housing and business. Why give money to failing business who are admittedly obsessed with greed, and little financial knowledge except for the fact they readily risk borrowed funds for their own gain?

Supposedly, if we do not make these investment banks solvent again, there will be no money for loans for ordinary people and business. Why not just by-pass the failed financial instutions and loan the money directly to consumers and business through banks that are still solvent? The banks would receive reasonable fees and interest for this service, and the funds would not be subject to the manipulation of the already failed institutions. The funds would go to the banks with assets with the priviso that they would be loaned for reasonable projects, backed by reasonable banking practice that would quickly stimulate the economy much faster than funds that go through the bureauracy of the failed institutions, and be subject to being pilfered again for consulting fees, interest, payments to supporting instutions and executive perks. The loans would be paid back to the U.S. Government with a deduction for service charges from the participating banks.

Chairman Bernanke sounds like the used car salesman telling us that this deal is only good for a few days and if you do not take it now, you will never get the same deal again. Sorry, but this administration is not known for wisdom and honesty. When those of us in small businesses make a mistake, we generally pay the price of failure. I feel that it is only fair that our Wall Street brothers and sisters learn to retire on only a measly hundred million.

I'm tired of my tax dollars having to pay for other people's greed & ignorance.

Maybe these CEO's making 6 or 7 figure salaries should be held responsible for running these banks into the ground?

PLEASE EDIT THIS POST TO REMOVE DISCRIMATION AGAINST VICTIMS OF PREDATORY LENDING. I was shocked to see that the introductory paragraph was crafted by the executive editor of AIA Architect. I find it highly discrimatory to undereducated borrowers.

Less ranting from Mr. Gordon's priveleged position and more propositions in terms of solutions would better promote the design thinking that architects [and those affiliated with them] should seek to promote to preserve public respect.

Do you remember where you were you when the largest bank failure in U.S. history occurred? On Thursday, September 25, 2008, Washington Mutual bank voluntarily filed for Chapter 11 bankruptcy protection. The Federal Deposit Insurance Corporation (FDIC) seized the floundering Washington Mutual’s assets, and the company went into receivership. This could have been a catastrophic event for America’s economy. "Consumer watchdogs" who hound payday cash advance lenders would slink off with their tails between their legs. J. P. Morgan Chase came in to buy out WaMu at zero hour, but the ominous warning signs remain. Will more banks fail? What would have happened if J. P. Morgan Chase hadn’t bought WaMu, and the FDIC was forced to repay customers? That would have meant up to $100,000 per individual and $200,000 per joint account, as well as $250,000 for IRAs and so on. Many economists fear that such a bailout would have drained at least half of the FDIC’s reserves, which would be disastrous if more banks fail. Much of this has transpired because a number of greedy banks have taken advantage of the subprime home lending market. Some fear the problem will escalate, but others think the problem will fix itself. In times like these, payday loans can be a great option for people in search of short-term financial relief that banks can't provide.