This is the Vice that Drags Down our Economy

Return to Order This is the Vice that Drags Down our Economy 1

1-1235664948qCNwFrenetic intemperance is a term we coined to describe a restless and reckless spirit inside certain sectors of modern economy that foments a drive to throw off legitimate restraints and gratify all desires.

Perhaps the most obvious example of frenetic intemperance is that of the speculative
bubble of the 2008 sub-prime mortgage crisis. It is a textbook case of what can go wrong in modern economy.

RTO mini2Free Book: Return to Order: From a Frenzied Economy to an Organic Christian Society—Where We’ve Been, How We Got Here, and Where We Need to Go


Financial Crisis

What happened during this crisis? All the parties involved simply threw caution to the wind and succumbed to spirit of reckless abandon. Homebuyers took out loans, which were called them “liar loans” since the prospect did not have to provide proofs for the information on the loan application. These homebuyers took out these loans without any money down and sufficient income to pay.

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Bankers and mortgage companies recklessly extended loans to prospects knowing them to be risky and even encouraging risks to make more profits by selling them to brokers. Brokers bundled up these mortgages and sold them to investors knowing that many of them were risky or “sub-prime.” Many brokers simply did not care about these dangers since they merely charged brokerage fees and passed the risk on to investors.

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