While banks and real estate agents are being accused (correctly, of course) of being the proverbial greedy and conniving foxes, consumers are being portrayed as innocent lambs. It is, after all, the role of business to tempt us with products that might not always be healthy. This is why a fundamental theme in our economic system is caveat emptor—let the buyer beware. I cannot help wonder why consumers became so greedy to increase their real estate consumption—the greed that led to the traps in the form of teaser mortgage rates without any money down.It is not at all the case that I am finding the consumer alone to be at fault. Nope. But, we, too are to be blamed.
Edmund Andrews, an economics reporter, writes about his own personal credit crisis in the NY Times magazine, and in it he describes how, despite years of covering all kinds of economic crises, he too joined the insanity that home-buying/borrowing was. It is a depressing tale. It could have happened to any one of us. I don't know which part of his narrative to excerpt, because I think his story can easily become distorted with an excerpt out of the context. So, here is the link; read it.
