by Gregory Mayo

Created on: May 10, 2008

The solution to the foreclosure crisis is simple...but will never be popular.
The market has to be able to adjust itself. What that means is the crisis has to become a crash. Will people, companies and the economy feel pain? Sure, but it's necessary pain. This is the way a "free market" works. When the government steps in to bail out greedy lenders and investors as well as ignorant consumers the market cannot do what it was designed to do.

Imagine the sea coming into the shore and then not being allowed to roll out again. The market is the same. It is never static...always moving up or down.

The fact is the greed of bankers and lenders caused this crisis. They came up with "creative finance" options to get people into homes they couldn't afford. They loaned money with nothing in the vault and when folks started letting the houses go banks got stuck. That's OK. They can't hope to learn anything if Uncle Sam bails them out.

As for the folks that bought into the game they should have to suffer the pain of this crash as well.

According to Dave Ramsey, "we are the most marketed to society in the history of the world." That's true. These shady loans and programs were and are marketed heavily to consumers. Still, it is buyer beware and it is the buyer that signed the paper.

Marketing firms create need. They employ psychologists and psychiatrists to entice us and make us think we need something that may otherwise not even have been a want. It's a game they are very advanced at but we have to learn.

But how did we get here? How did we get to a place where debt is a way of life? How is it that we are at a convergence where people are loosing their homes and jobs, the dollar is devaluing and gas is set to pass $4.00 a gallon? The answer again is greed.

We as the American people let our government pass NAFTA and grant China Favored Trade Status in the 1990s while under the watchful eye of President Clinton and a Republican Congress. This was going to bring the cost of goods down in America they said. They lied.

What has happened instead is that many people lost their jobs and we make nothing now. Without a manufacturing base our economy is propped up by the trading of services. So, we have essentially eliminated the middle class. Our national debt is skyrocketing and neither party will do anything about that.

Further, we insist on buying oil from countries controlled by people that ideologically hate us instead of drilling our own. We have millions of tons of worthless junk coming in from China every day and we all rush out to Wal-Mart to buy it. We have good paying auto maker jobs going to Mexico and illegals coming in here driving down trade wages.

In the midst of all of this sub-par homes are being built for sub-prime borrowers that can't afford them because the best job they can get is at a distribution center making $9.00 an hour. There they ship goods from China instead of making those goods here for $19.00 an hour.

It is all tied together. And, it is all the product of a lending and "money" industry that has crawled into bed with the government to sell us a bill of goods.

If the market is allowed to play this out the smoke will settle and we will all be better off. The credit situation in this country is abysmal at best and it's not just mortgages. Maybe the pain of correction is what we all need to get back on track.

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