We can't say we weren't warned. Some of us were nervous, in the housing and real estate bubble of the last few years,
Sandusky Register Staff
May 24, 2010


We can't say we weren't warned.

Some of us were nervous, in the housing and real estate bubble of the last few years, simply because anything that grew that much, that fast, was bound to burst and leave a lot of people grasping empty air where promise had been.

Some of us remembered the dot-com bust, as extravagant startups faced the sudden realization that you needed more of a business plan than simply taking your business to the Web.

Some of us were worried for long before that.

When home-mortgage underwriter Fannie Mae, of the now-infamous duo Fannie and Freddie, began expanding mortgage loans among low- and moderate-income people, the New York Times' Steven Holmes sounded a warning, noting this was a not-bad move during the flush times of the late 1990s but "may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."

Yes, the late 1990s. There's plenty of reason to bash the Bush administration and its hands-off, let-it-ride attitude toward big money, but the stage was set during the last years of the Clinton administration, which pressured Fannie Mae into expanding its mortgage loans. You can view the subsequent balloon ride, in which starry-eyed consumers financed homes and other possessions beyond their means -- with or without the "help" of unscrupulous lenders and brokers who were only too happy to write bad paper because it meant commissions -- as merely anexpansion of the concept.

So there's plenty of blame to go around. And there's little point in belaboring how we got here, because we're here, and we need to start getting out.

If there's anything to learn from how we got here, though, it's this: Wall Street and Main Street aren't that far apart anymore. We all live on one kind of credit or another, and some of us rely on it a little too much -- whether it's the Wall Street high roller or the Main Streeter who puts everything on the plastic and, somewhere deep down, really thinks "pay later" means "pay never."

But credit, like it or not, is the fuel that keeps our consumer-driven society going. Loans get us houses and cars, loans let your boss pay you. It's the turning of a convenience into a necessity that accelerated us toward last week's bailout bill.

The bailout bought us all time. Now we need to let the lawmakers and experts figure out how to manage the years of recovery ahead.

And we all need to learn -- as if the savings and loan bubble, dot-com bubble and Roaring '20s bubble that popped us into the Great Depression weren't lesson enough -- that if the ride keeps going higher and higher, it's a good idea to make sure there's something holding it up.