The “Tanking” Economy, the Housing Bubble, and What Happened

         The New York Stock Exchange has been down a lot over the past couple of months.  It’s down about fifteen percent from its high of just over 14,000.  Many people are wondering why and how far it is going to fall.  This is my attempt to explain why it has been falling.

            Our story actually begins in the housing and sub-prime loan markets.  As many of you know, mortgage companies don’t actually have the millions and millions of dollars they loan to homebuyers.  What they do instead is make a loan, say for $250,000, and try to find some investor (generally a bank or some other financial entity) to buy the mortgage.  The company serves as a middle man between the homebuyer and large financial institutions. 

            What has begun happening recently is firms have been buying large numbers of mortgages of all different sizes and interest rates and rolling them into one package, kind of like a mutual fund.  They then began to sell shares of this “fund” to investors and investment banks.  This has never been done before.  People on Wall Street have never been able to buy shares in a mortgage security because mortgage securities didn’t exist.

            Now investments are rated based upon their safety as an investment.  For example, a triple AAA rating means that the stock or mutual fund you are buying is pretty safe and unlikely to fall far in value – wiping out your investment.  It also means the return will probably not be as high as other investments.  A single A rating means that the stock isn’t as safe as the triple AAA, but could potentially have a higher return. 

            Well the various companies that have created the rating system needed to rate these mortgage securities.  In some cases they gave triple A ratings, in others double and single A ratings.  Then the mortgage securities were marketed based on these ratings.

            So like any bubble, there was far too much exuberance in the market for these funds and they were overpriced and overrated.  That was one problem.  The deeper problem, however, is that mortgage companies began making lots of bad loans (e.g. requiring no down payments from the people they were lending to, not checking credit history, proof of income, etc.)  This was not a big problem until the housing market started to slump. 

When the values of houses started falling, those people who had taken a $400,000 mortgage out on a $400,000 house found themselves with a $400,000 mortgage on a house that was now worth $350,000.  Not a good place to be.  So they just walked away (that means the bank foreclosed on their house.)  But no one is in a good situation here.  The bank is left with a house worth less than the loan it made and these people are down a home.  There were a couple of other issues about variable interest rates that I won’t go into here.  The point is that there was a huge increase in the number of people defaulting on their mortgage loans.

            So big picture, these mortgage based securities that were being doled out like mutual funds, started collapsing.  All of a sudden people began to realize that these securities were not as valuable as they had initially thought.  So the price began to plummet.  And to make things worse, no one really knows how to evaluate the worth of these securities.  The fact that they are so new and the rates of defaults on loans are variable makes people afraid to purchase the securities; even after they have fallen substantially in price. 

            Here’s where it affects the credit market.  Some of the chief buyers of these securities were giant investment banks, Merrill Lynch, Bear Stearns, Morgan Stanley, etc.  The investment bankers at these firms made varying degrees of stupid decisions.  At Bear Stearns, for example, the investment bankers bought the securities on margin, which means they were borrowing money against their current assets to buy more shares of the securities.  Though always a risky idea, if your investments are good it’s not a problem.  Once these securities started crashing though, the market froze.  No one was willing to buy but everyone wanted to sell.  So Bear Sterns went from having 800 billion dollars worth of securities in its investment branch to 300 billion dollars worth in a week or two (Note, these are not the literal numbers but they are characteristic of the idea).  And, because they had bought on margin, they still owed the hundreds of billions of dollars they had borrowed.

           This is why the market is unhappy.  Hundreds of billions of dollars have just disappeared.  These are not literal paper dollars, but electronic dollars in the credit market.  This is one of the reasons why it is difficult to take out new loans.  The Federal Reserve has stepped in to try and fix the problem, but that is a completely different story.

            What does this mean?  Well, credit markets are in turmoil.  No one knows how to value these securities.  A number of lending companies have gone bankrupt.  These financial problems affect the economy by limiting business’s and individual’s ability to borrow money for various projects.  Don’t panic, it’s not the end of the world.  Give the market time to sort itself out.  We tend to overly concerned about the immediate present rather than the future.  So what if one quarter has slow growth, or even negative growth?  There will be hardship for some people, but the market will come back if left unhindered by government intervention.  Also, it will come back quicker if consumer’s had more confidence.  Consumer confidence tends to be a self-fulfilling prophecy as to the performance of the market, at least in the short run.  So be patient, things will get better. 

Great Lines

Jesus never promised people wealth, or instant healing. He didn’t promise his disciples houses on the coast. Pastor Benny has recast Jesus in his own image. He has forgotten that his Lord died, humiliated, tortured, alone and penniless. But how do you sell that.
~Reverend Dr. David Millikan

Reverend Millikan asking if Benny Hinn is really teaching what Jesus taught? Or simply what will bring him (Hinn) money and power.

It would behoove The Sun to enter the real world. Assumptions do not reality make, and safety is not achieved simply by perceiving it.
~John Farragut, Treasurer, Cornell Republicans, Cornell University

Thanks to Haemet, a Cornell University student, who’s been highlighting the fight for Constitutional Freedoms on the Cornell campus.

John Farragut was responding to an op/ed in the student paper, the Cornell Sun, Way Off Target, regarding the hearings scheduled to discuss the issue of on-campus concealed carry.

10,000 Lies

Does the truth we find in this humor scare anyone else?

I’ve had the following images floating around on my computer for a while, waiting for me to actually post them. It seems to me, in their attempt to paint the liberal and Democrat as the loving, caring, truly human leadership, anybody with a mind will recognize the fallacies and dangers of the blanket statements made in this children’s book.

Children reading this book will be cursed with the feeling there is actual truth to be found in the ideas. They will accept without thinking the lies of socialism and liberal socio-political theory and practice.

Read and weep for America.

What parent wants their children to hurt?

What parent tries to protect the children from the pains of life?

What parent can?

Laudable.

But given the current state of Political-Business relations, wouldn’t it be more accurate to say: “Democrats give the Police Officers’ and Firefighters’ Unions the tools they need to keep dead weight and stupid policies in place hampering the heroes efforts, abilities, skills, and desires to serve as they are called”?

And I would want my children to go to those war-zones, indoctrination facilities, stupid-makers, great-levellers of the people they call schools?

I know what they mean is that we can all go to college. But 1) where is that a constitutional right or a universal requirement, and 2) aren’t there plenty of great colleges for cheap?

There are plenty of jobs in which one can work their way up to a comfortable level of pay which require no college. And the government has neither interest nor right to take money from those who aren’t going to college to give to those who are.

Maybe if there were less “free” money floating around from the government, the cost of education would come down, and only those dedicated and intelligent people would stay in teaching as it became less of a lucrative career option.

Democrats are government, not Mommy. This is a legitimate role for Mommy, not government.

To the extent that Democrats seek to usurp this role, they confuse the nature of society and culture. This is immoral.

Pompous, self-aggrandizing, megalomaniacal do-gooders!

Show me someone who believes this and I’ll show you someone certifiably insane.

First, there is no proof the Earth is “sick” with Global warming. There is proof there are regular and natural cycles of warming and cooling, and there is not proof we are even in a warming cycle.

Second, the temerity of the writer and those who agree with him in assuming a political party which has existed a mere 200 years has the might to enact significant change in an entire planet which they believe has existed 4.5 Billion years.

Someone call the nice men in white coats.

False.

The truth is, Democrats make sure schools cannot fire bad teachers. Democrats make sure children know all about condoms and how to have sex with each other, leaving it to the parents to teach reading and writing and true morals.

Individually, Democrats are generally caring people. But are they busy loving people to hell?

UPDATE:

These are not parodies, these are selections from one of two books for children:

Why Mommy Is A Democrat & Why Daddy Is A Democrat

End Of January Election Links

Obama and Clinton being children:
There’s a bold line between idealism and fantasy,
neither of them have grown enough to know the difference.

With big thanks to Sweetness & Light.

McCain is the front runner, but he’s not won yet. America’s Mayor has endorsed him after ending his own bid to become America’s President. The Governator is expected to endorse him as early as today. (Politico)

McCain will be a “hold-your-nose-and-vote” nominee because even he will be preferable to any alternative.

It is telling that, following exit polls, we know that liberals and moderates voted for McCain in Florida, while conservatives voted for Romney.

Speaking of Romney, he has some tough choices to make: Will he write the big check?

Huckabee needs to get his personal vendetta against Romney out of his eyes, drop out of the race, and endorse the one man who will support a real conservative agenda who still has a chance of winning.

Liberals Anonymous is looking for new members:

Liberals Anonymous (LibAnon) is a nationwide organization of current, former, and recovering American liberals and Democrats. Its sole mission is to establish and maintain recovery programs designed to help similar individuals overcome the plethora of congenital illnesses inherent in postmodern American liberalism with which they are embittered. Liberals Anonymous accomplishes this worthy goal by making the idiosyncratic elemental disease nature of liberalism self-evident to the afflicted individual.

(From the American Thinker)

Back to Romney, and Hugh Hewitt. Ace of Spades apologizes for not getting it right…

I can’t keep knocking Hewitt for being a bit overly enthusiastic about being, ultimately, right. If some of us had seen the lay of the land as well as Hewitt and supported Romney as the best realistic consensus conservative candidate, we might not be in the position we’re in now.

…and endorses Romney.

Jay, do you truly think the media darling candidate is your candidate? Come on, you’re better than that. I know it.

And Orson Scott Card thinks religion may play a bigger part of this than we realize:

After the Iowa caucuses, an African-American friend of mine from Los Angeles wrote to me, scoffing at the idea that Obama’s victory there meant that a black man could now be elected president.

I thought he was too pessimistic. But then came Hillary’s “comeback” in New Hampshire.

I keep hearing about how the pollsters “got it so wrong” and how Hillary’s victory came from the Democratic regulars getting out the vote for her.

And Mitt Romney’s defeat was also laid at the feet of many causes, none of which sounded particularly solid to me. Yes, McCain is something of a “favorite son” in New Hampshire now. But he also has another “virtue” that Romney and Huckabee both lacked: He’s not openly religious.

I suspect that racial and religious prejudice are both playing more of a role than anyone is willing to admit.

Read Card’s latest WorldWatch.

Riehl ponders:

Has anyone stopped to think that if McCain gets the GOP nod, there will come a time when the party has to draft a platform with an obstinate, if not defiant, McCain - an often angry man with a history of holding conservatives in disdain?

We need speeches like this more often. Bob Corker, Senator from Tennessee, in debate on the tax rebate checks said:

“What I see in this package is nothing but a political stimulus,” said Corker. “It’s a stimulus to make the American people think that we, as a body, are doing something to actually cause the economy to be stronger.”

(From Copious Dissent)

My chief argument against this package is that it is not tied to taxation. Those who pay no taxes will get as much as those who pay taxes. That is wrong.

This will tie economic stimulus and government largess together irrevocably. Government is a burden. A necessary burden, but a burden nonetheless. The way the government to affect the economy meaningfully is to lighten itself, not to quixotically throw money back to us who were compelled to surrender it to them in the first place. That is adding insult to injury.

Back to Romney. American Thinker asks why the other candidates hate Governor Romney. Some of the answers:

• He can win
• He isn’t beholden to special interest groups
• He believes America’s best days are ahead of it

And once more, from the American Thinker: What does that ACU score really mean for McCain?

So where did McCain differ from the ACU?  The big areas were taxes, campaign finance reform, the environment and, most recently, immigration.  There was also a smattering of support for trial lawyers; federal intervention in health, education, safety or voting issues; internationalism; and some social issues.

“its no the ppls fault”

In comments following the video I found this observation:

“its no the ppls fault its the roads not being salted fault”

Obvious schooling and literacy issues aside, this is a supremely immature reasoning and conclusion. But I fear it is all too commonplace today.

To read the comment literally, we see the fallacy of blaming an inanimate, amoral object. But to take the apparent, obvious, or implied meaning, the government is to blame.

Because the government wasn’t there to plow and salt the roads, these people have suffered damage to their property and cars. That’s what is being said.

What about life requires that the government be responsible for such things? Sure, the government owns and is responsible for maintenance of the roads. But are they required to avert any “act of God”, preventing them from hampering the free exercise of stupidity on the part of the citizens of that government?

I would argue that the government has a reasonable obligation to work to maintain the safety of those things it owns and maintains for specific use and benefit of it’s citizens. If inclement weather is expected and normal, reasonable foresight should be employed to allow an efficient and orderly clearing of the snow or ice. But the government bears no responsibility beyond reasonable protection.

These people driving, and every person engaging in the fruits of freedom and/or liberty, take their safety and security into their hands. Each person is responsible for acting in a manner which minimizes risk to themselves and others on their own. Not because the government requests or requires them to, but because it is the right thing to do.

The government does not have the power in and of itself to say that speeding is wrong. Instead, it has the responsibility demanded by ethics to set reasonable restriction to promote the maximal good to each individual while not inhibiting the liberties of all.

So these people in the video went out on a snowy day with the responsibility to be aware their cars would not operate in the way they are used to them operating. They should have driven at much slower speeds and operated generally with much more caution.

As technology builds up, shielding us from elements of nature, we tend to forget that nature is a much more powerful force than technology and operates on rules much more established and concrete.

Drive at your own risk.

I Am John Doe

I know this is a little old, but with news such as this, it’s time to start remembering we are each and one of us John Doe.

Dear Muslim Terrorist Plotter/Planner/Funder/Enabler/Apologist,

You do not know me. But I am on the lookout for you. You are my enemy. And I am yours.

I am John Doe.

I am traveling on your plane. I am riding on your train. I am at your bus stop. I am on your street. I am in your subway car. I am on your lift.

I am your neighbor. I am your customer. I am your classmate. I am your boss.

I am John Doe.

I will never forget the example of the passengers of United Airlines Flight 93 who refused to sit back on 9/11 and let themselves be murdered in the name of Islam without a fight.

I will never forget the passengers and crew members who tackled al Qaeda shoe-bomber Richard Reid on American Airlines Flight 63 before he had a chance to blow up the plane over the Atlantic Ocean.

I will never forget the alertness of actor James Woods, who notified a stewardess that several Arab men sitting in his first-class cabin on an August 2001 flight were behaving strangely. The men turned out to be 9/11 hijackers on a test run.

I will act when homeland security officials ask me to “report suspicious activity.”

I will embrace my local police department’s admonition: “If you see something, say something.”

I am John Doe.

I will protest your Jew-hating, America-bashing “scholars.”

I will petition against your hate-mongering mosque leaders.

I will raise my voice against your subjugation of women and religious minorities.

I will challenge your attempts to indoctrinate my children in our schools.

I will combat your violent propaganda on the Internet.

I am John Doe.

I will support law enforcement initiatives to spy on your operatives, cut off your funding and disrupt your murderous conspiracies.

I will oppose all attempts to undermine our borders and immigration laws.

I will resist the imposition of sharia principles and sharia law in my taxi cab, my restaurant, my community pool, the halls of Congress, our national monuments, the radio and television airwaves, and all public spaces.

I will not be censored in the name of tolerance.

I will not be cowed by your Beltway lobbying groups in moderates’ clothing. I will not cringe when you shriek about “profiling” or “Islamophobia.”

I will put my family’s safety above sensitivity. I will put my country above multiculturalism.

I will not submit to your will. I will not be intimidated.

I am John Doe.

Michelle Malkin started this here and here. And Hot Air has put together a bit of Spartacus with a bit of voice-over for this:

Abortion Kills Humans

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I wrote this back in August in response to a comment thread on an article on Dawn Patrol blog of Dawn Eden, author of The Thrill of the Chaste: Finding Fulfillment While Keeping Your Clothes On!

L, according to The Alan Guttmacher Institute and Planned Parenthood’s Family Planning Perspectives, both very Pro-abort centers, around 1% of all US abortions are in cases of rape or incest, and around 6% are in cases of medical necessity.

Should the other 93% of children be killed because of “lifestyle” decisions, ie. the child is not convenient or wanted, in order to to protect 6 mothers from the CHANCE that there may be life threatening complications and 1 mother who may not have had a choice?

I recognize this is very personal to you, L, and I respect that. You may not accept my arguments because I’ll never bear children, I’m a man. But you must respect my arguments as we have respected yours because I am a human, and someday I intend to be a father.

The root issue here is, as has been noted before, responsibility. In your case it may not be, but for 93% of women in the sample it is. This does not negate your need, and others have mentioned that it is highly unlikely there will ever be a blanket law making all abortion illegal, especially in cases of medical necessity.

The purpose of sex is procreation, the pleasure is a byproduct, not a direct result. This is why I disagree morally with the homosexual act, but that is a whole different issue and can of worms that ought not be opened here. Once again, the purpose of the sex act is procreation. The more responsibility that is stripped away from the sex act, the more cases there will be of men taking advantage of women and the more cases there will be of single mothers facing the decision. This is demeaning to women, in it’s root, as men do not have to buy the pills or deal with the pain, or face the decision.

Abortion not only destroys life, it destroys good. Do you know for sure if that beautiful child whose very existence threatens your health is not destined to become a great artist or scientist?

Further, we all die sooner or later. There is no promise that we are to live until we are 80 or 90. We have no right to assume we are to live to any age. There is no promise the sun will rise for any of us tomorrow. Today some fatal accident may occur and some life may be snuffed out as quickly as that.

We cannot assume life but we must protect it, and take reasonable measures to prevent it from being taken. It is a sacred charge that I take very seriously that if I am to have children, as I hope to one day, my health, safety, and very life is considered secondary if their’s is in jeopardy. As a grown person who knows that each day lived is another day less that I have left, and comparing that to a child who may very well still have many years of immeasurable potential, their own life is of greater importance than mine. This is not an animalistic or tribal approach. There are only very limited chances, and it is reasonably unforeseeable that I will be called upon to in such a way give up my life for my children, but I am willing if I am faced with such a decision, to do this.

Harkening back to the Titanic disaster, when in that benighted era when abortion was most definitely illegal, and yet the children and those who bore them are considered so very much more important than the men in society. The call went out as the ship sank “Women and children first”. The captain, in an act of supreme cowardice and selfish avarice, pushed his own way onto a lifeboat and was publicly shamed the rest of his natural life for that act.

Children ought not run our lives out of their selfish ambition, but we are be called to subserve our wishes and desires and comfort when we have voluntarily taken upon ourselves the mantle of parenthood. And it is possible we may be called upon to subserve even our safety to them as well.

A very good family friend has been in the same situation as you, she had medically necessary c-sections for most if not all of her children. And her doctors told her much the same thing you’ve intimated you were told. Yet she chose to continue having her children when they came, and her children are intelligent and special every one.

Who would she be to play God and decide that this one or that one did not need to survive only to allow her to have one more day, which might not have even been hers to have?

Today’s Interesting Stuff - December 3rd, 2007

As this years begins winding to a close, we have one of those news days which just makes me happy.

Hugo Chavez, the communist thug who wanted to run things forever in Venezuela, has been told he can’t hang around any longer than 2012, his original term limit. Students formed a coalition and grassroots campaign to fight his power grabs, and because he’s still constrained by a constitution he must abide by the law. The Communist News Networks print mouthpiece, Time Magazine, had the temerity to call Chavez’ power grabs “reforms“.

They cannot stand the thought of not using murdered babies to try to improve lives. And they aren’t afraid to lie about it. There has not been a single case of successful treatment of any condition using human embryonic stem cells. The only reason the government is being petitioned to fund this research is because private industry will not.

And what of the propriety of the government funding research anyway? Is it the responsibility of the government to do such things? Consider another expensive project: space travel. Now consider such programs as the Ansari X Prize which encouraged the production of vehicles which can enter space and return with a usable payload twice in two weeks. Using private money and initiative. Can the space shuttle do that? Can the government do that?

The State of Texas School Board fired their science curriculum coordinator for sending around an article critical of Intelligent Design. And the ruckus begins. With baited headlines such as “Hey Science, Don’t Mess With Texas” from the Huffington Post (which is apparently a major Yahoo Op/Ed outlet now) and “Evolution: Don’t even talk about it in Texas” the frenzied crowds cry foul. However, where is the issue? I’m not going to make a judgment on whether the coordinator ought to have been fired, there may have been other issues which led up to this. It would be unwise to fire someone just for sending around a document such as this. But a common thread through this hue and cry is that Intelligent Design and Creationism are some super heavy-weights in the world stage which have dominated Evolutionary theory in education and elsewhere.

Now tell me this: which theory has had the greater part of the last 50 years to indoctrinate our youth, guide our scientific inquiry, and silence any and all public debate? It’s not Creationism or Intelligent Design. No, evolution, a theory without proof or even a preponderance of evidence beyond that offered by the need for man to be able to define himself apart from an omniscient God, has enjoyed all formal and official public support. Evolution is no spunky underdog in this fight, it is instead the 800 pound gorilla which has dominated all arguments and quashed all dissent. Evolution is a flighty, sensitive thing too, which does not allow argument or dissent.

Further joy from the religion of Peace. Thank God she has been pardoned and is back in the UK now. Though with the ‘peaceful’ nature of British Muslims, her safety may not be guaranteed at this point.

The hurricane season is over. It was average, low average. And less than was predicted.

If they can’t predict a single season, why do they think they can predict the end of the world?

Around The World In 80 Seconds

Germany

American feminists tend to be firmly in the anti-war camp these days, and firmly against any attempt to stop radicalized Islam taking over countries and cultures in it’s quest for world domination. A female world leader who has actually accomplished something beside marry ‘Slick’ Willy, Andrea Merkel, has begun championing a cause modern American feminists would likely faint over.

Japan

A popular praise of Japan is it’s extremely low murder rate. Now, I’m not one to naturally jump to splitting hairs and such, but apparently we should be speaking of Japan’s extremely low reported murder rate.

America

United Kingdom

Note: I am posting this article in whole because the blog it belongs to apparently is completely off-line or dead, neither of which cases make me happy. The original article was here, written by Dave of Out of Ergyng, but the link, when I checked, was dead.

**Update: Apparently the blog was just down for a bit. It’s now up, and I’m glad for that.**

The concern of the emergency services for health and safety rules has cost a boy his life. James Poynton collapsed on a beach near Liverpool. First his parents were told an ambulance wouldn’t be sent until they could be sure of the spelling of the nearest road. When the ambulance arrived, the paramedic didn’t run to his rescue. She walked. She didn’t want to be out of breath. According to the Daily Mail:

A spokesman for North West Ambulance Service NHS Trust confirmed that its staff generally would not run on uneven ground as they were carrying heavy equipment and might not be able to carry out resuscitation if they were out of breath.

But for those Americans looking forward to Hillary Clinton’s vision of socialise medicine (okay, you probably aren’t reading this blog if you do), there’s more to this story. His mother had been told the day before he died that his heart condition was non-urgent, so he wouldn’t be seen. The letter offering him an MRI scan at a future date arrived the day after he died.

Everywhere But Malibu Beach

Apparently beautiful women are smarter. But I already knew that. After all, the most beautiful woman in the world likes me, and she’s brilliant too.

Boating License(tiousness)

During my family vacation this summer, I had the opportunity to do some water skiing and boating. Similar to my last post, things have changed a little bit in the past couple years. A new law was passed saying that no one can drive a boat without a boating license, unless you were born before the year 1985. Notice the grandfather clause, usually not a good sign.

I admit that there are legitimate reasons for a grandfather clause, however, in this case I think they were put in because most people wouldn’t vote for it otherwise. Why? Well because most people don’t want to get boating licenses and feel like they don’t need them. Instead, they are making others get boating licenses.

Is it ever a good idea to have a law that the people approve because it only applies to a small percentage of the population and not directly to them?

Philosophy aside, let’s take a look at this law. Why was it passed? Generally (though not always) laws are passed to fix some sort of problem. In this case they wanted to try and decrease the number of boating accidents and deaths that occur in Missouri every year.
There’s nothing wrong with this goal; who would be against fewer deaths and accidents? The issue is whether the benefit of the law outweighs its burden. Right now anyone under the age of 22 cannot drive a boat legally without a license.

For people from out of the state who don’t have licenses, this is an issue. I am not old enough to drive the boat, neither are my brothers nor all but one of my cousins. As you can imagine, this limits the number of drivers substantially.

At this point you’re probably wondering what I’m upset about. “Just go get a license and you won’t have to worry about any of this”. If you were thinking that, you’re right. It’s not an unbelievably burdensome process to get a license, but it is work. You have to find somewhere you can take the test or course and you have to pay for it. Annoying, but not the end of the world.

The problem in my mind is that the benefit does not outweigh this cost. As we were renting a boat one morning, one of the boat workers told us about the new license law. Apparently there have been around eight deaths on the lake already this summer.
When we continued talking, he explained that nearly all of them occurred when a bunch of people were partying on their boats and drinking up a storm. Not only was this a major contributor to boat collisions, it also created situations where drunken people fell off the boat and drowned or were run-over.

It seems to me that this is the real culprit, not that people didn’t know how to drive a boat, but that they were intoxicated and their senses were dulled. Boating safety depends on a person’s state of mind as much as it does knowledge.

Some people are more careful and cautious than others. I’ve seen people who were grandfathered in start driving their boats without pulling the anchor up. One time I was on a boat and it drifted in to the shore and lost a piece of its propeller on the rocks. What caused this? Was it insufficient knowledge and practice? Or was it not paying attention and reacting too slowly to the situation?

In the instances I observed, it was the latter rather than the former. Having a boating license would not have fixed the problems that led to these minor boating accidents. Furthermore, it doesn’t seem to me that intoxicated, licensed drivers are much safer than plain intoxicated drivers. Experience, common sense, a little prudence, and awareness seem to be the keys to safe boating.

My conclusion is that boating accidents and fatalities have been addressed in the wrong way, leading to little success with high annoyance and expense. A better law would be cracking down on people who go out on their boats to party and drink up a storm. If these are where the majority of fatalities are coming from, higher fines and jail time would be more appropriate measures than penalizing everyone under the age of 22 who wants to drive a boat.