No. of Recommendations: 1
Lending money to people who are unlikely to be able to pay off the loan under likely circumstances from the terms of the loan is simply bad business, even for loan sharks. Loan sharks don't want to break their customers' kneecaps. They want to be paid back, so their customers will borrow more.

Good point. Loan Sharks are good businessmen.

I despise corporate socialism, in all its many forms...as I'm sure you do, also.

I don't know what we really mean by "corporate socialism." I think both laissez faire anarchism, with no government or taxes and market forces ruling by the invisible hand, and state socialism, with the means of production, and everything else, controlled by the state are nonsensical, dysfunctional, or both.

In prosperous nations, government and business work hand in hand, and that includes basic things like government building infrastructure, providing protection, and educating the workforce.

Where we get into what I would call corporate socialism/corruption is where government enables companies to make profits they would not make without government aid, with no clear benefit to the public as a whole.

Take the sub-prime loans to the poor and, especially, poor minorities. The excuse being made that these loans help these people buy houses is misleading, if these people can't pay back the loans, lose their houses, or keep there houses through government bail-out. Government, including through Freddy and Fannie, facilitating these loans lets businesses make a profit from loans they would not make without the government guarantee. So, the only way to legitimate this would be to argue that 1) enabling home ownership for these people is an appropriate government expenditure, and 2) backing loans and bailing out problem loans for homeowners worth saving is a more efficient form of government intervention than direct subsidies to homeowners.

There are certainly those in the urban planning world who argue for home ownership as better and cheaper than subsidized rental housing (i.e., housing projects). But, if that is the intent, then the question is how to get the best bang for the buck with the best supervision/auditing to optimize success (you don't just throw home ownership at people who don't have the skills or understanding to pull it off).

What makes me look at the sub-prime guarantees from government as corporate socialism is there is no admission this is a form of subsidy to impoverished would-be home owners, no support system to help the owners succeed, and no evaluation of how many successful homeowner will be produced for the amount of government spending. That means it's just throwing money a sub-prime lenders, letting them walk away with profits, and if some people who would not otherwise be able to buy homes end up as actual, successful homeowners, that's just luck.

If government set up a subsidized home ownership program for the poor, there would be some government auditor in charge of bang for buck issues (not that there is a great history of such auditing eliminating bad programs). With corporate socialism, typically there is no accountability, at least not till it reaches the scandal stage, and usually even then they hire the same contractor.
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