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if so banks should be government owned >.>

Agreed, morons applying for personal loans who have no way of paying them back, or applying for business loans with a god awful business plan/idea should be sterilized.

However, it is on those banks to realize "this person probably can't pay this back, and will drown in the interest, we shouldn't lend them money". Predatory lending is a real thing...and you know what? When everyone is defaulting, the banks simply go to the government and say "uh, hey...we gave out all these loans to people who had no business getting them, coz times were good...now they can't pay us back and so we can't pay other people back...and we're just kinda fucked, halp?"

Then the government says OKAY, and gives these banks TAXPAYER dollars (because they are "too big to fail"), all while the executive assholes at these banks get to chill out with their fat salaries. I'm surprised this doesn't piss you off. You want to blame the individual...but they are the one's APPLYING for the loan...it is the greater responsibility of the bank to say "wow, this person is very risky...if we give them money...we probably won't get it back." ESPECIALLY because these banks then fuck themselves and get bailed out by YOU AND ME.

How is this not the responsibility of the banks, the people with the money?

If some crack head came up to me, and asked to borrow $20 bucks. And I made him sign a little contract that said "ill lend you this 20 bucks, and charge you interest on it" Then, the crack head takes the 20 bucks, spends it on crack...and I keep charging interest, but he never pays it...so then i can't get my money back, and he has nothing really of value except his piss-stained pants...so I'm now losing money..

Then I come to you Eturnal, and tell you about this...and say "so I'm kinda fucked, can you pay me the money the crack head was supposed to give me"

What would you say? Who's at greater fault? The crack head who asked for money and "signed the contract" that stipulated I could take his piss-stained pants (which I overvalued)...or me, the educated rich person, who gave it to him in hopes i could collect a ton of interest off him and make a huge profit?

Isn't the real issue that the people who have accounts with these banks would lose their money?

if so banks should be government owned >.>

(PS: People who have their money in the bank is insured up to $250,000/account... way more than most people here will ever have in a single account.)

No, I'm just wondering how its the government's fault that the banks pulled stuff like predatory lending. I suppose it is because the banks weren't as tightly regulated as they should be, but I don't think that's what he's getting at.

For starters, banks went to the government because the government was part of the reason they had to lend risky mortgages. Jubber (in this thread) and I (in other threads) have repeatedly referenced the community reinvestment act which the government strong-armed some of the larger banks into lending out loans to high-risk individuals. Smaller banks (which have much less in assets) weren't as effected because, in part, they're not touched by the CRA so they can loan to individuals they deem worthy of their money. Other means in which the government can impact lending practices is through anti-recrimination laws. I don't know exact demographics and numbers because I have no dog in this fight, but if there is a history of one race or economic condition (say Hispanics or single-mothers) which has a higher default rate then why can't the banks choose to not lend to that group of people? Law says they have to lend to that group of people because they can't discriminate... but should you (or someone holding your money) be forced to lend your assets (or a portion of your assets) to a person who is at a higher risk of defaulting?

See the problem? You can't deny that crack head his $20 because of his drug addiction, a criminal history, his education or skin color. You can only lend to him if he meets some low-ball qualifications. You're smart and you know you shouldn't give to that person (despite their meeting whatever low criteria needs to be met) but your hands are tied.

Government is partly to blame because this is the system they made.
Banks are partly to blame because they go along with the government plan.
The individual is mostly to blame because they agreed and signed the document making everything a done-deal.

PSEDIT: I didn't agree/support the bailouts. I think Jubber has been on the record saying he didn't support them, either.

this whole "corporations/business are/is bad" mindset you have goes entirely the other direction and looks to absolve other guilty parties of their role(s) for the sole purpose of putting the onus entirely on your personal boogey-man.

For starters, banks went to the government because the government was part of the reason they had to lend risky mortgages. Jubber (in this thread) and I (in other threads) have repeatedly referenced the community reinvestment act which the government strong-armed some of the larger banks into lending out loans to high-risk individuals. Smaller banks (which have much less in assets) weren't as effected because, in part, they're not touched by the CRA so they can loan to individuals they deem worthy of their money.

In hindsight, this is irony at its finest.