Dear Mr. or Mrs. * after close consideration (which is not accurate, in my opinion) we are unable to approve your * loan at this time. How many of us have seen this type of notice in our mail before? Sadly, This is an all too common letter mailed out to millions of Americans every day.
I have been kicking this idea around for several months weighing the pros and cons. I have come to the conclusion that many of the potential consumers who receive this notice are being held back from participating in the economy, or having their purchasing power diminished due to punishing interest rates. Obviously, this would allow some abusers of credit to get a fresh bite at the apple, however, I think the economic good would surely out weigh these exceptions.
The current system has no way of parsing out people like you and me who would have, under normal economic conditions, gladly paid our obligations, but for the extraordinary circumstances brought about by the great recession. The one size fits all monolith put up by the big three credit rating agencies has become an impediment to people who would like or need a new car, washing machine, home repair and the like. The evidence I would submit is the stock price for Auto Zone.
In October 2008 the stock was trading for $99 and change. Friday's close showed an amazing $331.25 per share. Really, is this stock really in the same league as Apple? In my opinion, no. I have nothing against Auto Zone as an organization. They are simply harvesting huge profits that result from people who have to patch up their older cars since they cannot get a loan for a newer model.
I think the people who were most affected by the bursting of the housing bubble, and now find themselves in a negative equity position on their mortgage would benefit the most from my proposal. As loose as the credit terms were before, they still had to have some qualifications to get their mortgages in the first place. Also the Federal Government has shown a willingness to bail out banks, should this plan not work out. More likely, they will enjoy the huge profits afforded Auto Zone, this will surly put a spike in demand. At least the money would be spent in America. I was sickened to find out that the Federal Reserve Bank gave a number of billions to European banks just this past week, to prevent their banks from running out of money.
The credit rating agencies and law makers must realize that the tsunami of less than stellar credit scores that have washed over America in the past three years is not the fault of the consumers altogether. There were large macro-economic force's stacking the deck against us. This is like a city giving a citation to a home owner who had a devastating house fire two weeks ago, for not cutting their grass in a timely manner. Hello, my mower was burned up in the fire along with my ability to buy a new one.
Our days of sending our jobs, money, intellectual property, ideas, and technology without getting anything in return need to come to an end. I beg the people in power to, as any flight attendant will tell you, "Put on your own oxygen mask before you put on the one of those you are caring for." Or better yet let them put on their own damn mask.
If you agree please share a link to this post with all your friends. and as always please leave me a comment.
Best of luck
Richard L. Pryor, Jr.
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