Praising the Criminals

I saw a disturbing article that praises the rule of the mob.  This is not a good economic sign.  I was pretty disappointed with the tone that the article took.  We are moving more away from the rule of law to the rule of emotion. 

The basic store is that an activist group harrassed the leadership of countrywide until they renegotiated on loans.   They felt like borrowers should not be required to abide by their contracts.  They demanded that countrywide run their business in a certain way or risk continued harrassment of top executives. 

The result will be that banks will not loan money to the poor any more.  They are not worth the trouble.  Instead of being allowed to mitigate the risk risk of lending, they are being required to lose money.  Let me know how that works out in the next ten years.  If people follow ESOP’s model, the result will be driving out the good business in America.  If a company was using the same methods to coerce a contract they would have an injunction filed against them.  On the other hand, because ESOP is in favor of the “public good”, they have a carte blanch to do whatever they want and it is praised as gutsy, not illegal.   No wonder people want to live in gated communities.

These people seem like lobbyists that aren’t quite as slick as the ones in DC, but have a complete disregard for the rules, and could therefore be seen as even more dangerous.


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