Re: UNCIVIL UNIONS

On Mar 10, 2011, at 11:20 AM, Peter T. Chattaway wrote:

> On Wed, 9 Mar 2011, nicholas a. evans wrote:
>> Not that all or even necessarily most rich fall into one those  
>> categories. But "working hard" is not a good enough justification  
>> for taking the lion's share of the profits.
>
> "Taking the biggest risk" could be, though.

How about taking none of the risk and all of the gain?  That is the  
modus operandi of wall street.

I just today was reading about reverse mortgages.  HUD insures them  
and the bank makes the owner pay the insurance fee (upfront).  The  
lender has absolutely no risk whatsoever.  If the value of the house  
goes down, the taxpayer pays, if the value goes up, the bank gets the  
equity.

The whole subprime mortgage fiasco was of precisely the same issue.   
The mortgage shops had no incentive to verify ability to pay, in fact  
because of their fee structures, their incentive was to fraudulently  
give out loans, which they did.  Fannie and Freddie took on the risk  
(taxpayer) if the values fell, and the investors in the securities  
(banks) reaped the profits if they rose.

That is why I have been suggesting that our form of government could  
very well be WORSE than socialism because the people subsidize the  
risk but get none of the profits.  At least with socialism the people  
get the profits too.

regards,
-Lance

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