March 09, 2013
Sir, Tobias Buck quotes activist Ada Colau during a hearing of the Spanish parliament on Spain's mortgage crisis with respect to the many heavily indebted homebuyers. She stated the following: “It cannot be that the most vulnerable people are made to live with the consequences of their actions until their death, while the big companies take no responsibility and are bailed out with public money”, “Spain´s voice of indignation grows into influential political force”, March 9.
And of course she is absolutely right, and anyone unwilling to comprehend that deserves being ashamed by the whole society.
But, even though all Spaniards with a home mortgage would be allowed to stay in their house with a mortgage reduced to leave him at least 1 Euro in equity, or allowed to walk away from the mortgage, the problem of where to work and what to eat, and in the latter cases where to stay, will persist.
And here is what I really have the biggest problem with, and not only with Spain. If banks are bailed out, how can regulators be allowed to be so stupid as not to allow banks to help out?
Because that is precisely what regulators stop these from doing when they award the banks irresistible incentives to lend to what is perceived as "absolutely safe" and to stay away from what is perceived as “risky”. And because that is precisely what happens when you allow banks to leverage immensely more when lending to what is perceived as “absolutely safe” than when lending to what is perceived as “risky”, like to small businesses and entrepreneurs
Spanish youth please do not build a government coalition around the many justified grievances you might have, and do yourselves a big favor, build it around daring hopes for the future instead.... God make us daring!