Greed causes Economic Collapse

The last few days have been troubling to say the least. Like everyone else I've watched my "retirement" accounts dwindle and costs for necessities like food and gasoline skyrocket. By making no changes in my life I've watched my lifestyle drop a few notches each month.

So what happened? How can oil companies post such huge gains and gasoline prices climb so high? How can so many people be facing bankruptcy on their mortgages? How can so many big banks and investment companies be crashing around us? There is a one word answer -- GREED.

The companies are greedy and we, as individuals, have become greedy. Where is the sensible limit on profit, how much is too much? Why does a person making $50,000 a year have to live in a McMansion at $300,000? And why was a company standing ready to loan them the money when there is no way they can honestly afford this home?

When I was first married, way back in the early 1970's, credit was difficult to get. We had only a car loan and decided we wanted a department store credit card for emergencies. We were turned down because of several factors and told to wait until he had been on his job over two years. To qualify for our first mortgage we were allowed to only count one salary, had to have 20 % down, and the balance had to equal not more than twice that annual salary. There were no ARMs, no 100% plus loans, credit was not freely given it was earned.

So what happened over the last 30 years? Where did we develop this sense of entitlement to 'things' we couldn't afford? I used to love to watch the home remodeling networks until I realized I was 'needing' things I didn't need. My favorite example is the backyard remodeling project I was watching one day. The total cost of the remodeling was estimated at around $200,000! Incredible. The host of the show turned to the landscape architect and asked, "Why do you think there is this interest in such large remodeling projects?" I know he wasn't expecting the answer he got. The architect looked at him and said, "Shows like this." That greed is the answer to so many of our problems.

There is a tough road ahead for many of us, and it starts with biting that bullet we weren't able to dodge. What can we do, as individuals? Read my next post for some common sense suggestions.