Good Intentions — Bad Outcomes?

The current financial crisis seems to have developed from some intentions that could have been good for many people.  It would appear that many members of congress and other organizations felt that Freddie Mac and Fannie Mae, being quasi-government institutions, could be used to aid less fortunate people in obtaining affordable housing.  This is quite a noble undertaking.  One with which no reasonable person could find fault without appearing either prejudiced or insensitive.

Unfortunately, certain things happened that caused many of the loans granted to go into default.  These happenings included a housing slowdown, some slowdowns in the employment sector, greed in the financial sector and apparent lack of oversight by management and / or government.

Obviously, there have been and will be many, many books, articles, blogs and other communications pointing fingers of blame and trying to determine:

• whether defaulting on loans led to the housing slump or vice versa,
• whether that job slump caused the housing slump or vice versa,
• whether greed in the form of huge salaries, etc. which gave many persons who could have exercised oversight a bit of blindness or did they just do such a wonderful job of getting mortgages out to everyone,
• whether the starry eyed ideal that every person should have the right to home financing led to some blindness as to the possible results of that action or it was the politically correct (i.e., it might lead to more votes in the upcoming election)
• or whether it was just the natural evolution of the capitalist system which obviously needs huge amounts of socialism to keep it on the correct path.

Those who have not captured the slant of the above rant will probably not appreciate the conclusion being drawn:  that is, that just because we have good intentions, it does not follow that pursuing those intentions without regard to the effects they may have is often very dangerous and leads to bad outcomes.

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This entry was posted on October 2, 2008 at 4:01 pm and is filed under Rants. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.