In the future, when people cast a financial and
historical eye back to 2007, one thing will clearly stand out, and that
is the mortgage "meltdown" that came to a head during that year.

In
truth, the full effects of this mortgage and lending crisis are yet to
been known, even as I write this article in January of 2008. People
are, however, beginning to toss the dreaded 'R' word around ...
Recession. And why shouldn't they? Abroad, we are spending money we
don't have to fight the seemingly endless "war" in Iraq. While at home
we are experiencing the so-called mortgage meltdown -- the worst in
recorded financial history. It sure smells like a potential recession.

But this article isn't about recession. It's about love.

You
see, many people don't realize that the mortgage crisis of 2007 is
really a love story. In fact, there are many different types of love
overlapping here. It's just one big love-fest! Consider the following
types of love that are present here:

• We American consumers love to buy, even when it's not wise to do so.
• American corporations love to profit from the consumers who love to buy.
• Government officials love to be paid for the trouble of looking the other way.

Looking Back - A Love Story Unfolding

Through
the mid 1990's and early 2000's, the number of subprime mortgage loans
rose significantly. A subprime loan is basically a loan made to
somebody who really shouldn't be taking on the loan. But the loan is
made possible out of love. The lenders love to charge high interest on
consumers with bad credit, and those consumers lRove to buy things (in
spite of their bad credit).

Some mortgage lenders fell so deeply
with this type of lending (and the profits it produced) that they began
to focus on it exclusively as a business model. Thus they became known
as subprime lenders, and they saw this as a chance to outmaneuver
competitors by extending loans to borrowers that their competitors were
turning away.

Economists, who love the truth and the data that
supports it, began to warn against this practice. So some states began
to pass restrictions against certain types of subprime lending.

Ah,
but those state politicians also love lobbyist dollars. So they found
themselves torn between two loves -- the love of doing the right thing,
and the love of money funneled in from the mortgage industry itself.
For example, consider the fact that Governor Arnold Schwarzenegger of
California received well over a million dollars from associates of
Ameriquest* (one of the largest subprime lending companies).

Incidentally, California is one of the states hit worst by the mortgage crisis. Lots of love in California!

So
this is yet another example of a politician who loves to receive
support from large corporations -- corporations that, in turn, love to
shape our country's laws with some good old-fashioned greasing of
skids. I loved Arnold in the original Conan movie, by the way, but I
don't love him so much as a Governor.

The Love is Spreading All Around Us

The
love of money, buying, selling and lobbying has created a mortgage
crisis of truly epic proportions. And like any good financial crisis,
it has spread to other areas. When consumer lending tightens, business
credit and financing usually follows suit. Just listen to what a recent
New York Times article had to say about it recently:

"Credit
flowing to American companies is drying up at a pace not seen in
decades, threatening the creation of jobs and the expansion of
businesses, while intensifying worries that the economy may be headed
for recession."

At the same time, we are seeing the dollar weaken
against foreign currencies around the world. We should be alarmed by
this! We should press for change! We should curtail spending! We should
question the White House's maniacal love for overspending on fruitless
ventures like the war in Iraq. We should ask the question, "How long
until the United States goes broke?" But there is another type of love
that lulls us into complacency...

Politicians at the highest
level love to offer encouragement by playing down the true severity of
our financial crisis. They love to soothe us the way one might soothe a
child who is teething.

And we just keep swallowing it right up. Because love is blind.

*
Sources: Federal Election Commission; National Institute on Money in
Politics; Center for Public Integrity; state disclosure offices.