Comparing foreclosure to a pre-nuptial?

[question everything]

University of Chicago economist Gary Becker in his blog

http://www.becker-posner-blog.com/archives/2008/03/the_erosion_of.html#trackbacks

about personal responsibility:

The many excuses offered by some home owners for their plight, and also eagerly by the authors of these human interest stories, is that the borrowers did not understand that these introductory interest rates might rise a lot after a few years, or that they would have negative equity in their homes if housing prices stopped rising and began to fall. An obvious alternative explanation for their behavior is that they gambled that the good times would continue indefinitely.

This type of response to failed decisions is not unique to the present housing crisis, but is part of a strong trend toward shifting responsibility to others. Women who sign a pre-nuptial agreement specifying the amount of their husband's pre-marital wealth that would be theirs in the event of divorce often try to have the agreements overthrown in divorce litigation. They claim that they did not understand what the agreements meant, or that their husbands took advantage of them in other ways to get them to sign the agreements.

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The difference is, a pre-nuptial agreement affects only one person, while a wave of foreclosures affects whole neighborhoods, the budget of cities, counties and states, and the whole global economy.

So, yes, many of these homeowners are to blame, but should we really be sitting smug in - dare I say it - Ivory Tower - while the economy is going down the toilet, including with our retirement savings, with the ability of our local government to function being severely curtailed?

[Mind_your_head]

1. Uh, what about the responsibility of the LENDERS

who lent more money to people than the people could reasonably demonstrate that they could pay back?

How do the lenders figure in here, Mr. Becker? SURELY the bankers/lenders realized that this practice would affect more than just ONE BANK (like your strawman argument of a pre-nup affecting only one or two people). SURELY the banks realized/anticipated, with all their savvy and financial knowledge, that having more than the typical 1-2% default on their loans would have an ENORMOUS impact - especially when it became an industry wide practice to grant loans that were larger than the grantees ability to pay.

Again I ask: How do the LENDERS figure in to all of this Mr. Becker? Inquiring minds want to know....

[girl gone mad]

2. So only women try to get out of prenuptial agreements..

after a divorce?

How 1960s of Mr. Becker.

While I somewhat agree with the first part of his premise, he definitely could have found a better analogy or just dumped that device altogether.