"Bush said homeowners concerned about mortgages that are about to jump up should seek help before they fall behind in their payments. For starters, they can call a new hot line operated by an industry alliance known as HOPE NOW: 1-888-995-HOPE. "
The so-called mortgage "crisis" and the recent political events surrounding it, in essence, represent everything that is wrong with our culture philosophically, economically and politically. The cause of this crisis remains unidentified by mainstream intellectuals and the solutions proposed to alleviate it will only make the problem worse and most likely hurt most the very people it is intended to help.
These types of crises and those yet to come are the consequence of a philosophical crisis to the extent that intellectuals and the public are unable or unwilling to think in principle and to the extent that the culture accepts altruism or self-sacrifice as morally good. It is an economic crisis to the extent that so-called experts in economics are unable to identify the fundamental causes. It escalates into a political crisis when the ignorant, unprincipled buffoons in Washington spurred on by altruistic bromides and parasites seeking the unearned launch a legislative orgy of idiotic rules and regulations.
Note that in all the discussions surrounding this fiasco, the root causes of this "crisis" are never discussed. It is not even discussed that it is not discussed. It's as if such a crisis is simply the given and to even attempt to understand it is futile. To the extent that any sentiment is expressed it is something on the level of "those darn banks" or "those evil greedy wall street guys" or in essence any explanation that casts businessmen as the villains and those that knowingly entered into these contracts as unsuspecting dupes.
Of course, if the "evil" bankers were to have withheld loans from high risk borrowers they would be denounced as miserly Scrooges who won't give the "little guy" a break and in fact would be punished by law, since as Yaron Brook points out in his excellent op-ed "Predatory Legislating" the government literally forces the banks to lend to high risk borrowers as part of the Community Reinvestment Act. On the other hand, if they lend money frivously they are cast as villains for having foisted some sort of scam on the public and apparently will now be punished under a new bill which contains vaguely worded "rules" alleging that they should have "known better." This op-ed brilliantly argues against the bill recently passed and identifies the likely consequences if implemented. http://www.forbes.com/opinions/2007/12/03/predatory-business-act-oped-cx_yb_1204predatory.html
The lack of an attempt to identify the causes of such problems is a symptom of a larger philosophical crisis. The value of reason, rationality, and logic have been under attack for over 200 years from secular academic philosophers who tell us that nothing can be known for sure and there are no absolutes and by the religionists who tell us there are absolutes but that truth is only revealed by scripture. The antidote to this false alternative is a philosophy that upholds the validity of reason as an absolute and therefore the efficacy of man's mind to comprehend the world. Unfortunately, this inability and unwillingness to think in principle has devasting consequences.
If the intellectuals and politicians could think in principle they might start by studying the fundamental economics behind this crisis. I link to Dr. Reisman's excellent blog "The Housing Bubble and the Credit Crunch" and the further links on his site.
The fundamental solution politically is freedom, i.e., the freedom of individuals and firms to enter into contracts and to reap the rewards or suffer the consequences of their actions. A truly free market would imply the total abolition of the Federal Reserve system with a return to a 100% reserve gold standard. Dr. Reisman has written a treatise on this topic but suffice to say it is the only way to finally end the "boom-bust" cycle caused by the government's ability to arbitrarily print money.
The underlying cause of government intervention into the economy is not just economic ignorance. It is the principle of altruism which motivates those who seek the unearned and provides justification for those who pass laws that intervene into business in order to allegedly help those in "need." The altruist is never dissuaded by economic arguments that show his position to be contradictory or even damaging to those he wishes to help. As long as he believes his actions are "moral" this madness will continue. Note that even the Republicans which are supposedly for free markets always buckle as soon as the first sobbing emotional appeal is made. This is also why Republicans which ally themselves with religion and altruism can never properly defend capitalism and are seen as hypocrites. In this way, it is not the enemies of capitalism that are responsible for its demise. For a brilliant exposition of this argument I quote Ayn Rand:
"Karl Marx predicted that capitalism would commit suicide. The American businessmen are carrying out that prediction. In destroying themselves, they are destroying capitalism of which they are the symbol and product -and America, which is the greatest and freest example of capitalism mankind has ever reached. There is no outside power that can destroy such men and such a country. Only an inner power can do it: the power of morality. More specifically: the power of a contemptibly evil idea accepted as a moral principle-altruism.
Remember that altruism does not mean kindness or consideration for other men. Altruism is a moral theory which preaches that man must sacrifice himself for others, that he must place the interests of others above his own, that he must live for the sake of others.
Altruism is a monstrous notion. It is the morality of cannibals devouring one another. It is a theory of profound hatred for man, for reason, for achievement, for any form of human success or happiness on earth.
Altruism is incompatible with capitalism - and with businessmen. Businessmen are a cheerful, benevolent, optimistic, predominantly American phenomenon. The essence of their job is the constant struggle to improve human life, to satisfy human needs and desires - not to practice resignation, surrender, and worship of surrfering. And here is the profound gulf between businessmen and altruism: businessmen do not sacrifice themselves to others-if they did, they would be out of business in a few months or days-they profit, they grow rich, they are rewarded, as they should be. This is what the altruist, the collectivist and the other sundry 'humanitarians' hate the buinessmen for: that they pursue a personal goal and succeed at it. Do not fool yourself by thinking that altruists are motivated by compassion for suffering: they are motivated by hatred for the successful."
(From "The Sanction of the Victims" by Ayn Rand, 1981; The Voice of Reason: Essays in Objectivist Thought, edited by Leonard Peikoff)