Letters to the Editor

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    While reading “Wall Street fix shouldn’t be hasty” the author discusses the recent news of the $700 billion bailout program. While Congressmen and women of both parties iron out all the details, people must realize how the United States got into this situation.

    Many people blame capitalism for the current crisis. However, it is Congress and the government that has caused many of the current problems.

    Legislation by both parties has over the years provided homes to people who could not afford it otherwise. One important piece of legislation that created this was the Community Reinvestment Act of 1977. The act, in essence, mandated that lenders offer credit to everyone in a local market and can’t just simply offer credit to high-income individuals.

    Politicians kept pushing for “affordable housing” so that low income families could own homes. Affordable housing seems like a good idea, but politicians tried to act like Santa Claus and simply give low-income families housing at the expense of tax payer’s money.

    As a result of the Community Reinvestment Act, lenders were pressured into making riskier loans to lower income individuals. In addition to this, Alan Greenspan, the chairman of the Federal Reserve from 1987 to 2006, kept interest rates low, making it cheap to borrow money. However, many individuals purchased homes using an adjustable rate mortgage.

    One problem with adjustable rate mortgages is that the interest rate on the mortgage constantly changes. Many people could put very little money down and leverage the rest of the money in order to purchase a home. These very same people were under the assumption that the price of their home would continually increase and that they would be able to pay their adjusting mortgage no matter what interest rates were.

    When home prices decreased people were unable to make payments on their mortgages and they had to foreclose on their homes. The legislation of the Community Reinvestment Act of 1977 did nothing to help low-income families to afford a home.

    The push for “affordable housing” has done little to help low-income people. People were simply buying what they couldn’t afford because of promises from Washington. Clearly people need to use common sense and only buy what they can afford.

    Under the current proposed bailout, we would be moving toward socialism. The government seems to enjoy using taxpayer money to bailout both the rich and the poor. The latest saga of the bailout should have a title of “The Rich and The Reckless”. Businesses take risks and most of the time they are rewarded, but sometimes take more than they ought to. Companies like Lehman Brothers and Bear Stearns Companies took major risks and invested complex financial instruments, some of which they didn’t even understand.

    Investing in these complex investments in the long run proved to be tragic for both companies. These companies made bad choices and, as a result, failed.

    However, they failed because of capitalism. Capitalism includes both profits and losses. More oversights and regulations, as the author suggests, are burdensome and costly. The auto industry doesn’t have oversight or regulation and the industry is better off because of it. If the author cared to look at history, it would have shown that deregulation benefits the consumer. For example, Wal-Mart has saved both lower and middle class families more than any stimulus check could ever do. People shop at Wal-Mart because of their low prices. Deregulation is the key for competition which, in turn, drives down prices. A few years ago, the energy market in Texas was deregulated, giving consumers more options as to who they could choose for electricity. Deregulation created competition, giving people options and making it cheaper for all consumers.

    Businesses have to pay for regulation and, eventually, pass it on to the consumer. In addition to this, businesses have no incentive to sell or offer a defective product. A firm’s reputation is often worth more than a firm’s actual assets. When people say deregulation is bad, they don’t understand fundamental economics and seem ignorant of history.

    Although I don’t know the solution, I do believe less government should be in the equation. Under what condition should the government control or own anything?

    While Hugo Chavez might believe socialism works, history tells us it doesn’t. More government intervention means less freedom for everyone. Everyone should be aware of the positive things that capitalism has done or, as Larry Kudlow puts it, “free market capitalism is still the best path to prosperity”.

    Peter Parlapiano is a senior finance major from Houston.

    I heavily disagree with the author who said that chivalry is dead. What example does he give to show his point? Holding doors and rude people with cell phones?

    Ask anybody who knows history and they will tell you that we are probably the best-mannered society in all of history. For example, in the 19th century before we had public restrooms, people would literally do their business in the streets. Many would also pick their noses, ears, and other places that I will not mention here. These are behaviors that we consider taboo in today’s society even for children.

    He also asks why it is so difficult for a person to hold a door or say “Hi” as they pass by you. I don’t know about the writer of this article, but this type of courtesy is common for me. As I write this, I can count many instances today when someone held a door for me or a stranger said “Hi” or “Good morning” as they passed by. If they don’t, I don’t get upset about it. I simply know that they may be shy, late for a class or upset about something and have other things on their minds.

    I also can recall many times in which I bumped into someone or got in someone’s way and both the other person and I said “Excuse me” or apologized.

    My basic argument is that chivalry is not dead. It has merely changed due to the different lifestyles we have today. Earlier in history, women were seen as fragile objects to be taken care of. Now we know that they are equal human beings. I still see men hold doors for them and various other polite acts not because they are fragile but because it is the nice thing to do. If we want to be polite, we simply have to be nice and courteous to those around us and not be held to a set of rules like knights to keep us accountable.

    Michael Lauck is a freshman broadcast journalism major.