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Paying For The Sins of Lending

New York Senator Charles Schumer wants to throw some compassion [1] (and money) to consumer groups to bail out troubled homeowners. Its a noble gesture that will certainly help some people, but its really just a drop in the bucket. Salve in the wound so to speak.

Here is my problem with this sort of throwing money at the solution solution:

In the rush for profits and lack of supervision, subprime lending will have a lot more to answer to in the future. Pointing the finger is a natural reaction to this and its deserved, but it doesn’t change the system. A lot of people were hurt, and so far, no meaningful discussions on how this could have been prevented have taken place.