The payment on my home loan was up about 35% this month. Kind of.
The Hungarian currency, the Forint, has been taking a beating lately. Our home loan, however, is calculated in Swiss Francs. So the amount of Forints we were charged this month is up significantly. It is fortunate, therefore, that I landed a job that pays in Euros.
All this leads to the question, 'Why is the loan in Swiss Francs?'
It is that question, and its absurd answer, that has kept me abreast of the global financial meltdown. In an attempt to keep it simple, I'll just say this: Due to a serious deficit, the Hungarian National Bank won't lower interest rates (currently at 11.5%), even if a rate cut would stimulate local lending. For this reason, it is much cheaper for people seeking credit in Hungary to borrow in a foreign currency. But when the Forint lost value last month after the credit markets froze, anyone earning in the local currency got pinched hard on this month's repayments. And it doesn't look like a one-month issue. Recovery is going to take some time.
While I'm normally not the kind of person who pays attention to financial news, having to keep track of currencies and national lending rates has changed the way I read the morning papers a bit.
That being the case, I've recently raised some objections to the way the
Then last night a good friend sent me an article from The National Review Online. My friend knows I'm not much of an NRO reader, but I send him NPR pieces, so all's fair. Anyway, the article he sent, by Mark Steyn, is titled "The Death of the American Idea." I had to ignore Steyn's bitterness over the sound thumping the GOP received in the election, but the focus of his piece exposed an interesting blind spot in current conservative thinking.
Steyn's complaint is concerned with the ever-expanding Federal Government, a legitimate concern, especially for a fiscal conservative. But what struck me was the evidence Steyn used to put his argument over the top. He described the bailout package as the US Government’s latest step towards the left.
As someone who admires the values of fiscal conservatives, I can understand Steyn's objections to the bailout package. However, it is the policies of 'small-government' conservatives that have been peeling away at government regulatory powers over the past two decades. Those powers had been put in place to keep companies from slipping into an AIG-like situation. The value of such regulation has never been as clear as it is today.
On top of that, Steyn feels comfortable ignoring the fact that the bailout is propping up companies whose failure would wreak havoc on the global economy.
Steyn probably hasn't had to sit across from a Hungarian colleague - a colleague already angry with her own government for botching the local economy - and listen to a diatribe on unchecked American greed. Greed that is, according to my colleague, destroying what little progress the Hungarian economy has made in the past few years. Even with an IMF loan, the EU bailouts, and the
Personally, I will probably weather
"You want to let these companies fail, huh? Then what happens next? You want to let my nation's economy fail?"
It was laissez-faire policies that got us into this situation. Fiscal conservatives may be upset that those same policies can't get us out, but anger or blame pointed at election results is misplaced and ill-spent.
It is very easy to be fiscally conservative when the crisis is under a microscope. But I'm on the wrong end of that microscope. The loan I took out was described as the most economically responsible loan available. When the repayment on such a loan jumps 35% in one month, there is something wrong with the system. If we trace the problem to its roots, we find two things:
A mismanaged Hungarian economy (no big surprise there)
This is not a problem that will go away if we just ignore it. Men like Steyn can moan about how their ideology has been violated, but they ought to look at where their ideology has taken the world economy. Their time is up, and now the governments they scorned are left to clean up the mess. I’m just glad the