James Surowiecki has penned a nice piece for The New Yorker pointing out the double standard of corporate vs. personal default and bankruptcy.
Source link: http://archive.mises.org/19998/like-setting-a-pile-of-money-on-fire-every-month/
“like setting a pile of money on fire every month”
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That was a really good read, as well as your own writing on this topic, Walk Away. Personally, I do not understand why people continue to throw money into the black hole but at the same time, that is their choice. I only hope that some of them wake up to the reality that the price of their home or even homes isn’t going back up any time soon.
“real-estate developers are notorious for abandoning properties that no longer make economic sense.”
The “Double Standard” that prevails in the US Economy,
“It’s Just Business” its not “Personel”
So to double moral standard is that businesses are permitted to default with little if any stigma, while a home owner duped into buying an over inflated home is shamed into holding onto a losing proposition. Home owners are being encouraged to suffer the losses that the Banksters should pay for since they were directly complicit in the inflationary bubble.
I can’t remeber the specific movie, but the bad guy told the good guy that he had to kill him because it was “just business, nothing personal”. So to the banks tell us to pay our debts even if doing so threatens our very lives!
Pulp Fiction? Maybe.
Its the Godfather I was just watching that movie the other day…
Some random thoughts on this subject: ABT says liquidate those mal investments. Is not adjusting the principal of a mortgage downward equivalent to liquidating the mal part of the homeowner’s investment? Faithful fulfillment of contractual responsibilities is vital to a successful laissez-faire economy. What is one’s moral obligation or responsibility to live up to a contract in which the other party was acting fraudulently (re: See Hoppe and others on fractional-reserve banking is fraudulent; viz., the money the bank lent wasn’t the bank’s property to lend.)? Can a real person have a real, moral obligation to a legal fiction such as a banking corporation? Have ethics, morality, contracts and the law been distorted beyond recognition by the fable of “corporate personhood? (http://www.thomhartmann.com/articles/2001/12/restore-democracy-first-abolish-corporate-personhood) Can a real libertarian endorse fictional corporate personhood? (http://blog.mises.org/18762/corporate-personhood-limited-liability-and-double-taxation/)
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