This is our home, typical to the real middle class. Five years ago, it was valued at $145,000, here in a rural neighborhood in the Central Valley of California. Behind that flag is my office, the birthing center for Midknight Review.Click on image to enlarge.
Two years later, just before the bubble broke, our home was valued at $369,000 !!. Refinancing offers came to our mail box a half dozen times a week, several proposing to refinance 125% of the [inflated] value of our home. Tempting. Very tempting . . . . nearly $440,000 for 5%. Today, after the bubble, we think the value of our home is around $170,000 and falling. If our house was located on the coast, San Jose, for example, it would be worth $400,000 or more as things stand today. Can you imagine the "bubble effect" in that market ?!
Do you really understand what "could have been?" If we had refinanced for the $440,000, today, we would still owe $440,000 on a home worth $170,000. More than this, do you understand just how hopeless is the Obama Mortgage Bailout plan? A reduction in principle (this is what this genius is calling for) would find us still owing more than $380,000. Obama would be running around the country pointing to a $60,000 (in our case) aid program -- 60,000 stinking dollars !!!!!! -- and we would still be in over our heads, home ownership a broken dream. He wins, we lose, and the remainder of the country is ignorant as to what has happened; that is his plan.
Obama's first mortgage aid program promised to help 9 million home owners. It actually offered aid to only 600,000 and 60% of those folks have lost their homes, anyway -- for the reasoned example given above. His second aid scheme, signed into law without the involvement of Congress, promises to help 11 million homeowners by reducing their principle debt. It will not help 800,000 home owners, according to experts, and, in the end, the effects of this political scheme will have accomplished nothing of consequence, except to have given Obama bragging rights for the coming campaign cycle.
Point of post: we did not buy into the "get rich quick" motivations of the "Affordable Housing" scheme, created by thoughtless Progressives as they tried to fulfill an idiots promise of "the right of ownership for all." Because we had the good sense to resist temptation, the housing crisis did not effect us. We are not a part of the 11 million who are hurting and, in many cases, whining because of decisions they made.
What is missing from the current blame game with regard to the housing crisis, is a thing called "personal responsibility," an unknown quantity to Democrat politicians and Keynesian economist. When "leadership" does not insist upon "personal responsibility," the financial health of the nation, in this case, is seriously effected.
Progressives? Really?
ReplyDeleteTake this from Bush's 2004 nomination acceptance speech:
"Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence."
"Thanks to our policies, home ownership in America is at an all- time high."
"Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."
I love how every politician wants to take the credit when the shit is good and spread the blame when the shit gets bad. Its kind of like the banks who want the government to bail them out when they are on the brink of folding because of their own bad decisions.
I'm not trying to say that Bush and his administration are the only ones to blame here but if we are talking about leadership and policy, Bush set the tone during his presidency and he was very successful in crafting policy that put a lot of people into homeownership that had no business getting loans.
It was government irresponsibility and predatory loan sharks who are still doing the same thing they were doing in the last decade. They are still making a mint off this bullshit and the banks are too.
"Personal responsibility" only works if everyone is personally responsible. When everyone is just out to make more money and the policy is set for those folks to abuse the system they don't care about personal responsibility. Every man and woman has a price at which personal responsibility is no longer relevant.
Point of my comment: You can't just blame one group for "affordable housing." There is plenty of blame to go around. Blaming the people who were deceived into buying houses they couldn't afford surely doesn't solve anything. Personal responsibility only works when everyone plays the same game by the same rules. In a country of over 300 million people with different goals and ethics this is not sustainable. As much as I hate religion, a little christian phrase I learned in Catholic school is more appropriate. Do unto others as you would have done to you. Everyone's actions affect the those around them. As attractive as the idea of the rugged individual archetype of the American is it is just not practical in the real world. It only works in fiction. What we fail to teach people in this country is the weight of repercussions for bad decisions and how those bad decisions affect everyone around us.
If there is enough blame to go around, then Progressives are to blame (along with others).
ReplyDeleteUniversal ownership is both a “beyond stupid” idea and a progressive dream (read “nightmare”). You are right about your comments concerning Bush - he was a big part of the problem but he did see Fannie and Freddie as problematic and the Dems refused to cooperate. I know. I was paying attention, at the time.
I am working on an article in which I discuss the housing crisis as it relates to "blame." Right now, I have about 30 small print, single spaced pages to review. Impressed? My first conclusion? I BLAME macroeconomics. I “blame” personalities because the Left thrives on this idiot strategy – so, I return fire. But causative assessment is much closer to where we need to be. Right now, I count about 15 contributing influences. I intend to have this done by the weekend. If it doesn’t help anyone, it will help me. "Rugged individualism" works for the hundreds of folks I know. Your fantasy that such does not work “in the real world” is confounded by the absolute fact that it has worked, in this country, in the real world, for two freaking centuries. Social Security is supposedly by roughed individualism. The programs that challenge your buzz phrase, were not around before the 1960’s. If word gets out that “You sign a contract, you own the problem” is condemned by the Progressive do-gooders of political leadership, banks will simply stop lending to folks - which has already happen to some degree
Of course, there are those who cannot make it on their own, for a variety of reasons. They need our help ---- but not half of the stinking population; the poor we have with us always. Understand that I am not opposed to socialized solutions (i.e. K-12 education) . Anyway, I do agree with most of what you say. But very little of it goes to the correctness of my position.
BTW, God and religion are two very different things.
Alright, then lets look at it from this angle. This idea of personal responsibility only works if everyone plays the game. So how about Goldman Sachs, AIG and Lehmann Bros. What about their personal responsibility. According to Mitt Romney and the law they are people too. Where is their personal responsibility? How bout their 'Rugged Individualism?" Goldman Sachs has some seriously rugged individualism and they don't give a shit what they do to the economy, the country and most importantly they don't give a shit about any individual whether they are personally responsible or not. They will take your house and turn a profit or they'll find someone else who will and profit off of that or they'll insure whoever is going to lose the money and make a profit from someone else losing the money. Its a shell game and the loser is EVERYONE. Eventually even the assholes at Goldman lose.
ReplyDeleteGod and religion are both constructs of the human mind. While they may be different they still come from the same source.