I like Larry Elder. He's smart, and most of all provocative.  If more people thought what he thinks before  acting, there might be fewer newsworthy catastrophes, but I guess that's what you call hindsight.

For example,

Borrowers with shaky creditworthiness received low interest "teaser" rates. …lenders lent and borrowers borrowed. Some borrowers took on debt only to find themselves unable to pay their mortgages, and the carriers of their debt now find their holdings less valuable.

But what about the responsibility of both lender and borrower? … 

No one put a gun to either lenders' or borrowers' heads, and now both sides of the transaction find themselves in financial difficulty…. 

I'm with you, Larry! Earlier this week I asked the question, Did no one see this coming? And last month, How are we getting out of this mess? You were not, in getting a 1% teaser rate, being duped by your lender.

Don't worry. President George W. Bush has a bailout plan. I quoted Shannon Hubbard a week ago who said, "I just don't get how helping (risky) borrowers to refinance loans they couldn't afford to begin with is going to help anybody…except the subprime lenders who get to pass these risky loans off to the taxpayers."

I was new in my first business, a writing-editing-graphic design company in Los Angeles, when the Chrysler bailout was big news. I hated the idea that I could barely pay income taxes at a time when a major corporation's missteps led to a government bailout. I was bailing Chrysler out but "Who was bailing me out?" Years later I read Lee Iacocca's biography–so Chrysler paid the money back. Didn't make me feel any better in the 80's as I lived and worked in the same rented room to keep my company running in black ink. Which leads to Elder's brilliant question:

Suppose you stayed on the sideline and rented or stayed in a smaller home in order to move up? [instead of  signing a loan doc at a come-on teaser rate] Too bad, for the Bush plan artificially props up home prices. The President's plan also enables some homeowners to receive Federal Housing Authority loans in which the government — taxpayers — pay lenders in the event of a default. The plan also does nothing to prevent lawsuits by investors who hold the mortgaged securities in expectation of a certain return. 

I listed some of the guilty parties in my blog about mortgage fraud. To some extent, I suppose all of us who like nice homes, nice clothes, and good cars are to blame. We make it more competitive for the people who can't afford those things.

I wondered how this became a global crisis, till I read Elder's explanation of U.S. Banks selling off the risky loans to foreign investors. Evidently Germany has taken a big hit. Asian countries, too, are eager for their piece of the American pie. So we sold them the equivalent of junk bonds.

Is this beginning to sound familiar? Our bad judgment spurs legislation to save us from ourselves, so we have to find ever more clever ways to outwit the laws and exercise bad judgment again. It's a never-ending cycle. We have everything to fear for the future when we forget the past, forget what we did to get here.