Wednesday, November 26, 2008

We Are the Ones Who Never Missed a Payment


an Open Letter to the Administration, Congress, federal and state officials, financial services executives and others

by Efrem Sigel

We are the ones who never missed a mortgage payment.

We lived within our salaries and saved part of what we earned, no matter how modest our take-home pay.

We used credit cards sparingly and always paid what we owed on time without incurring interest and penalties.

Although we often got three offers for new credit cards on the same day from the same bank, we kept the number of cards to a minimum. Never did we sign up for a new card so we could borrow money to pay the balance on another..

We resisted the blandishments of banks flooding us with offers for home equity loans so we could add a room, pay for a wedding, take a cruise. We paid for our vacations out of what we had, or we didn’t go. We knew it was foolhardy to borrow against our houses for normal household expenses.

We started IRAs or contributed to 401Ks and funded them year after year so we wouldn’t have to depend on Social Security for our retirement. Lacking guaranteed pensions from public or private employers, we provided for ourselves. That was the lesson we got from our parents, who lived through the Depression and never forget it. Neither did we.

If we were fortunate enough to see our incomes rise, we paid taxes at ever increasing rates,. Some of us started businesses and worked seven days a week, creating jobs for others and in the process, lifting our own standard of living.

Now we are watching the fruits of a lifetime of savings and effort melt away day by day because of the breathtaking incompetence and shameless, immoral behavior of others:

Like commercial bankers who forget the basic lesson of lending money: be as certain as you can that the borrowers can pay you back.

Like investment bankers who bundled and sold asset-based securities knowing they were junk—or even worse, not knowing.

Like successive Congresses and Administrations that provided easy credit, mandated that banks make loans to less credit-worthy borrowers, allowed Fannie Mae and Freddie Mac to take on ever-riskier mortgages with little or no oversight, stuffed the federal budget full of pet projects that cost tens of billions, and used our taxes for subsidies to whatever interest group was well organized and made the most noise—sugar growers or the ethanol lobby or defense contractors building weapons systems that never worked or oil and gas companies earning record profits.

As for us, we have suffered losses, household by household, that are mounting into the hundreds of thousands of dollars, devastating retirement plans, current income and our financial and emotional stability. Some of us will lose jobs not because of our own failings, but because of the failings of those in responsibility in both the public and private sectors.

And of course, no one is offering to bail us out.

Trillions in federal aid are going not to us, wage earners, taxpayers and savers, but to whose who failed: banks and insurance companies whose executives led them into insolvency, borrowers who signed mortgages they couldn’t pay, and no doubt soon, auto makers who couldn’t make cars that people want.

Not only have we already paid a crushing price in terms of the destruction of our savings, but who do you think will pay the tax bill for all of this aid when the final reckoning comes due?

That’s right: We will.


At December 9, 2008 at 11:08 AM , Blogger pfc said...

Efrem.. You said it so well! You are not alone. Would that there could be a happy ending for those of us who walked your path!

At December 18, 2008 at 3:27 PM , Blogger Brian said...


A lyric from "Salt of the Earth" by Mick Jagger and Keith Richard has been spinning around in my head for a week now: "(We) need (and thus, vote for) leaders, but get gamblers instead."

Somehow, I think it applies.

Brian Riordan


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