It's difficult, IMO, to entirely blame "the banks" for their behavior. We ought to be blaming the government in a lot of ways. If you're an employee at a bank, say a mid level guy in charge of enforcing foreclosures, you need to follow the law or risk getting fired or even prosecuted. What are you supposed to do in that case? What should have happened is that the government should have included some strict policies in TARP that defined when people, especially low income people, were eligible for mortgage relief or a foreclosure moratorium or whatever else they could have done to prevent disaster. Instead what we got was a blank check with no strings attached, and the borrowers still got fucked. Unfortunately, there's no do over here. These neighborhoods (which have been in decline for decades, the 2008 calamity just happened to be the last straw) are mainly uninhabited wastelands. The bright side is that there is a creative destruction that's happening in Detroit, and likely in other cities, that is helping to reshape the city for the better in the long run. Cherry-picked photos aside, building is booming in the city, and that is going to revitalize the tax base, which will hopefully trickle down to the underclass (which encompasses the vast majority of the residents here), particularly in terms of better schools and transport and more service jobs. Time will tell, but I think there is a silver lining to be had.
You can certainly blame the banks for their behavior post TARP. They get relief, become solvent and then basically refuse to lend to anyone. Good businesses that rely on banks for cash-flow up and died. Killed a ton of mom and pop and mid sized businesses along with some big guys too. It was completely unethical.
I don't know. Maybe I'm a cynic, but I would never expect ethics to be a portion of their calculus. L They don't always follow the law, but at least it's a set of guidelines. There should have been a clearly defined quid pro quo for TARP money, and there wasn't. Shame on Bush (and Obama) for that one.
You are right, the banks definitely came out ahead in those negotiations and shame on the government for not holding them more accountable and setting up more stringent guidelines for how liquid the money must be. That said, the banks missed out on a lot of future earnings from businesses they helped nail the coffin on. Perhaps a bit shortsighted. Therefore, in my opinion the anger directed at them is not misplaced.
Oh don't get me wrong. I think they're leaches who deserve what waits for them in hell. My only point was that it's up to the government to protect the people. When you have the leadership of the Fed and Treasury completely populated by ex-Wall Streeters and both parties receiving more money from the financial sector that any other industry, then this is what you get. They're going to take as much ground as they can; we know that. It's up to the government to look out for our interests. In that, they failed miserably.Therefore, in my opinion the anger directed at them is not misplaced.
Totally agree. I know there are a huge number of growing neighborhoods. There are just... less neighborhoods now, and a lot of communities are gone. I think a moratorium on foreclosures was probably the correct answer to what happened, especially in conjunction with mortgage relief. If it failed after maybe 5 or ten years, then start again. People will have recovered enough that the slow trickle of people leaving would have been fixed by newcomers that could do something.