Friday, February 20, 2009

The Responsible strike back

The cry has gone up in the days before, but especially the moments after, Barack Obama announced his housing rescue plan Wednesday.

It's come from people who took out safe mortgages they knew they could afford, from consumers who haven't overspent and overdebted, from parents who wonder how far we have to go to clean up the messes of people far too old to leave them in our laps.

"We have done everything right," wrote Kenneth Gistedt of Clover in an email this week, "and we lose out."

Today, in a column titled "Money for Idiots," New York Times columnist David Brooks says Barack Obama's housing plan - and George Bush's bailout before it - "have compensated foolishness and irresponsibility."

Such complaints have not come only from conservative-leaning columnists like Brooks. In fact, it's an anger not defined by politics, by being a Republican or Democrat, a believer in government or a skeptic of it. It has to do with consequences and who faces them.

The bailouts, from Bush's to Obama's, have penalized the responsible and reward the risks of the irresponsible, the angry say. The TARP, they were told, would loosen lending, but it didn't. Now we're moving on to a mortgage bailout, in which the government is going to save the homeowner with little income who took out an interest-only loan for a $120,000 home, as well as the brokers who took a chance on fraudulent mortgage-backed securities.

These and other trillion-dollar proposals transfer the consequences of a relatively small group's actions to everyone - including those who have been religiously putting money into 401ks, 529s and a mortgage payment on a home within their means.

And ultimately, it has to be done. Brooks acknowledges that the economy is something we all share, including the foolish and greedy. If we don't stabilize their lives and their institutions, ours will not stabilize, either.

That process will be trying - and the reaction will sometimes be divisively over-the-top (including this already viral CNBC clip earlier today.)

But there also are some larger, thoughtful worries, heard often this week from our readers and so many others. Is solving debt issues with more debt a wise approach? Are we doing enough to discourage the same bad decisions from being made again? By bailing out and injecting capital and buying bad assets, we've told everyone it's OK to make a big mess. In fact, some are surmising, it might be better to make a big mess than a small mess.

Because, they wonder, if you make it big enough, won't everyone else have to clean it for you?

Tell us what you think.

Your Morning Edge:

Something new to worry about, CNN says: Deflation.

Who's eligible for the mortgage rescue? That's still being decided, the Washington Post reports.

The stimulus makes COBRA health coverage more affordable, the Wall Street Journal reports.

74 comments:

Anonymous said...

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them" Thomas Jefferson

Anonymous said...

The management & boards of these companies that through stupidity, greed, and arrigance are responsible should be immediately terminated with no parachute for the company to get bailed out.

Hardtime prison for all who broke the law.

No more jobs outsourced to India for these companies.

No loans to illegals

No construction contracts to amy company hiring illegals

Anonymous said...

I can't figure out this whole bail out of foreclosures thing...275 billion? There are only 120 million households in the US...you figure at least a third of those are apartments...so 80 million homes...to be aggressive, let's say 20% of those homes, or 16 million homes are in financial distress... that's like 150K per HH? No way...I am not a rocket scientist but even if the govt bails out these people, they still won't have a job and will have to be bailed out again....Obama needs to incent companies to hire more people. For example, go to the dell's, wal-marts and ciscos and say "OK, you had 50k employees in '08...at the end of '09 if you have 20% more, you receive X in tax breaks....30% more, you receive Y in tax breaks." To me, it's not that hard....

Anonymous said...

I couldn't help but laugh this morning as I watched Rick Santelli on the Capitalist Pig Network whining about individual mortgage holders getting some kind of financial assistance. Nice of him to wait until after the financial services industry got a trillion or two for itself. The financial markets as we know them would no longer exist if the government weren't supporting it and yet he stands in the middle of the world's biggest casino and gripes about living, breathing human beings getting a pittance.

Brendan said...

The responsible have the right to be angry. However, they need to stop and think about where they're directing their anger.

This is nothing more than an attempt to shift the blame from those responsible (banks, mortgage companies, house flippers, etc...), to an easy scapegoat - minorities. Not that I'm surprised to see that sentiment here in Charlotte.

PS - David Brooks couldn't find a clue with a flashlight, map, and both hands

Anonymous said...

Thank you. Why should the 90% good guys who are responsible and didnt lie have to pay to bail out the
10% bad guys who apparently were not truthful and in effect this is a big reason why we had to pay to bail out the banks who are not innocent too among other reasons.

Who is going to pay their ridiculously high property taxes in this depression? Will we be doing that too although property taxes have only continued to rise in the worse of times.

We would love for Mr Obama to go after these property tax crooks all over America and get them reduced accordingly. If home values decrease then valuations should likewise decrease. This has not happened.

Vincent said...

good old fashioned debtors prison, and a lenders prison, as it were, would have most likely been the only preventative required to make this entire mess we are in nothing but sheer speculation in a conversation on the way to Harris Teeter for the weekly grocery shopping run.

Anonymous said...

I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.
-John Galt

Anonymous said...

The responsible arent striking back, the clueless are. This plan is for people with NORMAL mortgages who are at risk of losing their homes because they have lost their job recently due to the economic crisis. I have never seen such stupidity. Not to mention that this money is from the $750B Bush had already taken....so take up your socialist complaints with him.

Anonymous said...

Last time I checked one of out duties in this country is to love one another, does that nor include helping each other. I would rather my money go to help soemone that needs it than to someone who is in the country but is not an American citizen, or someone who is lazy and don't, won't, or has never held down a job for more than a few weeks. There is truly good people who are responsible who is on the verge of losing, has already lost their homes. These people don't have a job and can't find jobs. I have a friend who has been out of work for over a year now, single parent wants to work but can't because she can only get temporary assignments that only last a few days or a few weeks. People in those kinds of situations I don't mind helping.

Anonymous said...

Obama who claims bailing out bad loans will stabilize and help good loans? This is a crock and he knows it. And on another note new AG Holder says America is "coward" for not talking more about race? Huh? You are kidding right? So thats what white voters get after voting in Obama? Does Obama agree with this? He needs to demand an apology for this crapola.
America does nothing but talk about race so much already it gets sickening and redundant.
We can only hope this bogus race card talk ends.

Anonymous said...

It's all ridiculous. That COBRA thing is ridiculous. Why not REQUIRE that people getting these "benefits" shop for cheaper coverage? I was once laid off- COBRA was like $500 a month.... short term insurance was $75 a month. My current policy is $110 a month. Surely some of these people are healthy enough to get high deductible, low payment healthcare plans....

Make the banks work with borrowers to redevelop a mortgage on affordable terms- make the bank and buyer take the hit. Bank gets less interest, buyer spends more time paying for the home. *Gee* that would not require any of MY MONEY. Instead, the banks get a BONUS if the borrower pays up? Huh???

Seriously, can we responsible people get something? maybe require recipients of this welfare to come cut my grass or clean my house. (Maybe get up close and personal with living people who live within their means- see what free furniture and a home with one bathroom looks like!). Maybe make Ken Lewis come by and clean our office.

I have ZERO sympathy for any of these people. CEO's down to idiots who bought too much house. I have sympathy for tax payers. Small businesses who come April 1st will write a hefty check with no chance for bail out. Households that will look at their year end finances and see that over 1/3 of what they worked for goes to bail out crooks and fight useless wars.

Anonymous said...

"Last time I checked one of out duties in this country is to love one another .."

Where did you see this? You can give all your own money away and love all you want but leave other people in the real world alone ok? This is not a utopian world and Obama is not messiah.
We have our own bills to pay, not others.

Anonymous said...

THANK YOU IDIOTS FOR VOTING FOR OBAMA. LOOK WHAT YOU'VE DONE TO US NOW!!!

If the Republicans were smart, they'd nominate Michael Steele in 2012, that way the country could vote a minority in office with some sense. OBAMA IS A FRAUD.

Socialism here we come!!! Did you know that 40,000 people in New York City pay 50% of the city's taxes? That's retarded. We'll be like France by 2010.

Anonymous said...

WHY NOT A TAX REVOLT BY REFUSING TO PAY ALL TAXES? WE DID FIGHT THE REVLOLUTIONARY WAR FOR THE SAME REASON, PLUS THERE ARE NOT ENOUGH JAILS FOR US ALL!

Anonymous said...

There is only one solution at this point. Keep the system of Government, REMOVE the people in Government, all of them. The decisions to dump all of the trillons of dollars is not a "mistake" by Government, it is a plot. This will wreck our economy for years to come and put us on par with the economies of Venezuela and others. If the American people do not wake up and rebel, instead of sitting on their rear watching American Idol, we are done as a nation. Whats next? Civil War.

Anonymous said...

Some of us tried to warn others what would happen with BO. He is still campaigning, flying all over spending our money instead of staying in Washington trying to figure this economy out. This is a product of no experience and no common sense. We have not seen the worse, the world is coming down on us and his people are worrying about race and letting terrorists out of prison!

Anonymous said...

120,000,000 households
66.666% ownership
80,000,000 homes
20% at risk
16,000,000 homes at risk
$275,000,000,000 bailout (is the number correct?)
$17,187.50 per household at risk.

A little off the $150,000 you posted.

Still rediculous, but if you tell someone to do the math, you should probably do it yourself first.

Anonymous said...

drip drip drip. My 401k looks like Frosty the Snowman in July.......

Anonymous said...

That was bad math above but bad spelling of ridiculous too. The bad math person did have an ok idea about creating jobs though. Thus far the only real suggestion to help get out of this mess by any poster.

Anonymous said...

I pay my bills and save judiciously. Why should those who are irresponsible be rewarded? I am looking forward to buying a house soon. Maybe I should screw everything up for myself and let someone else pay my bills and buy a house for me ????

Those greedy so-n-so's at the top should be burnt big time. If they were poor they would have been long ago. They need to be prosecuted and put in prison for their irresponsibility and entitlement approach to handling everyone else's business.

Anonymous said...

The only good thing to come out of the current economic conditions is that I no longer get daily solicitations for credit cards, which has caused a decrease in paper use, which has caused a decrease in paper production. A natural conservation of resources.

Anonymous said...

Ah, the shrieking (AND ALL CAPS!!!)of the righteously aggrieved.

1) Where was the shrill stock tout Santelli when AIG, Merrill, et al were getting theirs? Oh...
2) Distasteful as it may be, saving the mortgages of the few in reality helps the many. A tidal wave of foreclosures will sweep away a lot of prosperity. What we've seen so far is the tip of the iceberg.
3) Quoting John Galt: In case you haven't heard, even Ayn Rand's acolyte Alan Greenspan has begun to renounce her "wisdom." This debacle proves the worthlessness of her views. By the way, for all the righteous Christians here in Charlotte, Ayn Rand was an adulteress.

Conservatives always think they operate in a vacuum. They don't, though they fervently wish it so. Every person's life touches the life of another.

Anonymous said...

The government should allow people to rescue themselves by allowing homeowners to apply their IRAs, and 401Ks to their mortgages without early withdrawal penalties. It's their money, they should be able to access it during these unstable times instead of using tax payers money to cover the irresponsibilty of others.

Anonymous said...

We need to first understand its a financial system in crisis. Stabilize that and housing by any means necessary.

Anonymous said...

WHile I agree that the management and boards of some banks have responsibility, it still goes back to personal responsibility and the government getting involved in the HOMES FOR ALL pipe dream. It doesn't take a genius to figure out if I buy a house and the payment is 3/4 of what I make, I am going to be in trouble. While the mortgage broker, or closing lawyer should have asked you these questions, you should be able to figure it out. But the banks lending is partly the governments fault. In their zeal to get everyone in homes, they told the banks, you have to "invest" in low income homes etc etc, but don't worry, we will back you. So the banks made the loans, and now want their money. Please don't think I am trying to let the banks off the hook, just it really all started with the government

Anonymous said...

"Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character. . . . "
Grover Cleveland

"I cannot find any authority in the Constitution for public charity."
Franklin Pierce

Anonymous said...

Speaking of the irresponsible, I submit the Observer. First they burn money on THE EYE, an "Uptown-focused" magazine that bombs. Then they watch their parent company's stock drop 99% in value.

Now their publisher, Charlotte Center City Partners board member, Ann Caulkins, wants their competition removed via this "uptown newspaper boxes" scheme.

Oh, and of course their report on the newspaper boxes scheme FAILS TO MENTION the conflict-of-interest between Caulkins and CCCP.

CCCP... wasn't that the Russians' abbreviation for the Soviet Union? Why yes, yes it was.

Anonymous said...

Its called socialism. Protect the dumb and weak with the fruits of responsible ones.

Anonymous said...

I am sick of people being outraged that those of us who bought what we could afford don't care to step in and help someone who didn't live and stay in a house they coudl not afford then and still not afford with help. I am not happy that foreclosures could affect my property value, but the worth that everyone will get and realize you ahve to take responsibility far outweigns any help the government could give.

Greg said...

As one of those responsible folks who has played by the rules, I understand the frustration of my fellow responsible citizens - BUT, we still have to do something b/c if the downward spiral continues, this responsible person will eventually get laid off and be unable to afford his responsible mortgage and be in the same boat as the irresponsible.

Anonymous said...

The banks were followig the rules when they gave to mortgages (not that I agree with the rules) but the person signing into these loans is who should pay. If you are not smart enough to ask questions and understand what you are signing, you do not deserve to have the home in the first place.

Anonymous said...

As of yesterday, 92% of mortgages are up to date (from CNBC financial analyst)

To 10:18 poster, yes that is someone that should be helped but the requirement for the 38% income calculation will throw your friend out.

This is designed to help the banks rewrite the AltA and subprime mortgages and keep people in the houses. However, the plan should have been where the taxpayer now has a lien on the house for the differential in the principle so we get paid back. If you've started studying the CMS and county budget for next year, they are still counting on the ever decreasing "good" citizens to keep carrying the increasing "indigents". And no "indigents" do not include those who were once "good" taxpayers and had the misfortune of being laid off due to this situation. These are the voters the demos are courting including the illegals and their mortgages.

Anonymous said...

Move out of the US if you dont like. Supports your country or move to mexico. You people sound like the biggest NATION OF WHINERS I have ever heard. Thank Rick Santelli and his boys on the Chicago Merctinile exchange not to be upset becuase taxpayers didnt want to pay your bonuses anymore.

Brendan said...

Anonymous @ 10;26
Re: Not enough prisons - you forget that Bush gave Halliburton a contract to build detention centers for illegal immigrants. They can be used for Tax revolt people like you, as well.

Anonymous @ 11:19
Not only do conservatives think we operate in a vacuum - they believe that they are the operators of said vacuum.

~ LMA said...

Hey, capslock Anonymous 10:25 -- I may be mistaken, but this mess began before Obama ever took office. No, I don't think it was Bush's fault, either. It was the fault of the greedy business people, of the consumer who thought they deserved something for nothing, and of the entire government, who sat and played their violins as the economy imploded.

Anonymous said...

The fed's many actions are absolutely penalizing the responsible in so many ways and the responsible will end up paying for it all. This is an example of incompetence or the opening moves towards wealth shifting and socialism. But I guess we are getting what the majority of the voters wanted!! They will learn..........

Robin Hood said...

Folks, Obama told you he wanted to redistrubte wealth. The Observer may not have covered it, but he said it none-the-less.

Why is anyone surprised? Did no one actually read Obama's books? He was elected by people with their hands out wanting something for free. And, now, he's giving it to them.

BIG change for America, but not a lot of hope.

Anonymous said...

So far we've got the people that loaned the money getting help, the people that couldn't afford the loans getting help and the rest of us paying for it.

The bigger problem though is that the administration is trying to build up the fallen without putting in a floor first, so there will be a never ending stream of people falling into a pit. (Which is the same problem with his "surge" in Afghanistan or committing to close Gitmo without a plan.) They need to shore up the economy from the bottom up - time for some trickle up economics by suspending taxes the rest of the year. The states win because spending will be up and they'll get more sales tax. Working people will win because people will have some additional money to spend. Let people spend their money on things they want, not what the government wants. It's worked pretty well up until now.

And another thing. Can we stop with the "sky is falling" talk every day from the President and his aides? We know it's bad, that's why you got elected, so stop whining about how bad it is and get to work. Enough photo ops and rallies too, the campaign is over.

Anonymous said...

God bless those who have homes in foreclosure or homes about to go into foreclosure. Bless those who are prospering in this economic crisis and may they continue to prosper. Bless those who are unemployed with employment. And God I thank you for everything I have…

Bruce said...

The first thing Obama needs to do is pass legislation that will stop this from happening again. It should be a law that you can't buy a house unless you put 10% down. It should also be illegal to have a mortgage where there's no amortization of principal. Finally, these wacky mortgage-backed securities have got to go. No creation of new financial instruments without SEC approval.

cltindependent said...

I voted for Obama and I'm not going to blame him yet as he just got there. I'm not crazy about what I've read about the plan but I have not fully read it or really understand it yet. I didn't like the TARP plan that Bush got for Wall Street either. For some reason certain people didn't have a problem with that. I bought my house 7 years ago with a 30 year fixed (offered an interest only with a low payment),put money down (mortgage broker told me I didn't have to) and work one full time and one part time job. Yet the banks have TWO foreclosures in my neighborhood selling for $45,000 less than tax value. This hurts everyone else that is paying the mortgage. I have not heard a solution to this problem yet. I'm not going to join the chorus trying to turn neighbors against one another, but if the banks had worked with these people while they were in their homes, values would not have been hurt so badly in my neighborhood.

Anonymous said...

I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.

Benjamin Franklin, On the Price of Corn and Management of the Poor, November 1766

Anonymous said...

"The Proposal"

When a company falls on difficult times, one of the things that seems to happen is they reduce their staff and workers.. The remaining workers need to find ways to continue to do a good job or risk that their job would be eliminated as well. Wall street, and the media normally congratulate the CEO for making this type of "tough decision", and his board of directors gives him a big bonus.

Our government should not be immune from similar risks.

Therefore: Reduce the House of Representatives from the current 435 members to 218 members and Senate members from 100 to 50 (one per State). Also reduce remaining staff by 25%.

Accomplish this over the next 8 years. (two steps / two elections) and of course this would require some redistricting.

Some Yearly Monetary Gains Include:

$44,108,400 for elimination of base pay for congress. (267 members X $165,200 pay / member / yr.)

$97,175,000 for elimination of the above people's staff. (estimate $1.3 Million in staff per each member of the House, and $3 Million in staff per each member of the Senate every year)

$240,294 for the reduction in remaining staff by 25%.

$7,500,000,000 reduction in pork barrel ear-marks each year. (those members whose jobs are gone. Current estimates for total government pork earmarks are at $15 Billion / yr)

The remaining representatives would need to work smarter and would need to improve efficiencies. It might even be in their best interests to work together for the good of our country?

We may also expect that smaller committees might lead to a more efficient resolution of issues as well. It might even be easier to keep track of what your representative is doing.

Congress has more tools available to do their jobs than it had back in 1911 when the current number of representatives was established. (telephone, computers, cell phones to name a few)

Note:
Congress did not hesitate to head home when it was a holiday, when the nation needed a real fix to the economic problems. Also, we have 3 senators that have not been doing their jobs for the past 18+ months (on the campaign trail) and still they all have been accepting full pay. These facts alone support a reduction in senators & congress.

Summary of opportunity:

$ 44,108,400 reduction of congress members.

$282,100, 000 for elimination of the reduced house member staff.

$150,000,000 for elimination of reduced senate member staff.

$59,675,000 for 25% reduction of staff for remaining house members.

$37,500,000 for 25% reduction of staff for remaining senate members.

$7,500,000,000 reduction in pork added to bills by the reduction of congress members.

$8,073,383,400 per year, estimated total savings. (that's 8-BILLION just to start!)

Big business does these types of cuts all the time.

If Congresspersons were required to serve 20, 25 or 30 years (like everyone else) in order to collect retirement benefits there is no telling how much we would save. Now they get full retirement after serving only ONE term.

Anonymous said...

Freebies? Bail-outs? Rewarding stupidity and apathy?

I used to give or loan some of my lesser-used neckties to my little brother as he was growing up. He took them off and - looking like he had wiped his shoes with them - threw them in a drawer in a heap. Onece-beautiful silk ties reduced to rubbish ...

I *immediately* announced the end of the free tie program and said that he could BUY my lesser-used ties from me with his newspaper delivery money.

Suddenly, these beautiful necties took on value and they were kept clean and hung in his closet with care and respect.

I rest my case ....

Anonymous said...

"Beware the greedy hand of government, thrusting itself into every corner and crevice of industry" Thomas Paine

Anonymous said...

"The constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government - lest it come to dominate our lives and inerests." Patrick Henry

Anonymous said...

To Anonymous who posted at 10:19am, I have a pre-existing condition so COBRA is my savior. A regular insurance policy would run me about $2000 a month. I just lost my job and have signed up for COBRA coverage and am very appreciative that I will get help with my premium thanks to the stimulus bill.

I get so tired of you so called health insurance experts. You have no idea what it is like to be diagnosed with an incurable disease and not know how you will be able to pay for your medical bills. Is my life so less valuable than yours? This is the first time the gov has done anything for people like me. I've never gotten a tax break for anything and until I recently lost my job I went to work every day no matter how bad I felt. So forgive me for being just a tad bit happy.

Anonymous said...

Apparently the RNC published a memo on January 20, 2009 that isntructed all registered Republicans to answer any question with a single word for the next four years: "Socialism"

Anonymous said...

The Responsible strike back...This guy writing the article is a joke. We just gave away $350 billion to banks and that did not work to end the credit freeze, so now we are trying something new...I am in favor of helping people who may have made some bad decisions we all have at some point. Look at the stock market its still going down, but you got people putting money into it. NOW THATS STUPID...So I am glad to help out the next person, because after all help them or they will be helping themselves to your items by just taking them. Schools or Prisons the choice is OURS...

Anonymous said...

Folks, this is much more sinister than bailing out the unfortunate. It is a master plan to continue to build a class that is dependant on the government. In doing so, it will ensure that we proceed with a socialist agenda. This is the best thing that could ever happen for the Obama administration....Not unlike the credit crisis, you will not see it until you are looking out of window of your government owned housing project 20 yrs from now...

Anonymous said...

In Theory, who knows about reality, TARP funds are an investment that do pay dividends and could end up in the government making a profit.

The government should model the home owner bailout the same way. For those who need a short term loan to continue to make payments on their house, the government will be willing to assist. However, this loan will require interest payments and the money would be paid directly to the lender to ensure that the borrower isn't using the money for tv's and vacations. Also to get the bridge loan, the borrower would have to first prove that they have done everything possible to pay the loan themselves, including cutting back expenses and contacting their bank.

Not likely to happen.

Anonymous said...

I want MY money back! I know how to spend it wisely!

RIGHTISRIGHT said...

WOW many thoughts, some good, some not, like: "Distasteful as it may be, saving the mortgages of the few in reality helps the many. A tidal wave of foreclosures will sweep away a lot of prosperity...each life touches another"

LOOK, the economic reality is that if you allow people who can't pay to remain, what will happen in six months or a year when they can't pay again? This is akin to what Japanese banks did for failing borrowers: more loans at better rates! And what happened? These zombie companies were still not making it. Same with GM-back for more of MY money. People cannot learn a lesson if you don't let them feel ANY PAIN, the same as children. Resolve all their disputes, fix all their problems, and they will NEVER LEARN FOR THEMSELVES. If you want to help people go right ahead. But using MY TAX MONEY TO PAY SOMEONE ELSE'S BILLS DOES NOT FLY. This was not built as a socialist society, though we are headed there. It's like Amity Shlaes mentions in The Forgotten Man: A sees an injustice that X suffers and gets B to make a law so that A, B, and C help X. For A and B to help X on their own is fine, but to conscript C and make him pay? Not just. As for the first bailout, loosening credit markets is entirely different from giving $30M to a mouse or $1B for STD prevention or $2B for voter fraud (ACORN) or paying deadbeats' bills. For Mr. St. Onge - well written and balanced piece. Thank you!!

Anonymous said...

I see you're one of the foul-mouthed, ALL CAPS spewing conservatives like Rick Santelli. There's an interesting blog on nytimes.com desrcibing the values, racism and boorish behavior of floor traders.

The point isn't that it's just or fair to help the banks and the failing martgages. It isn't and it sucks. The point is that if we don't the outcome will be much, much worse. There's already a cascading effect and disinflation in the marketplace.

Anonymous said...

You're like Andrew Mellon in the first Great Depression: liquidate everything. Try that and see how it works.

chupacabra said...

Look, I'm not happy about this either. I feel like I'm being punished for buying a house I could afford and making personal sacrifices to ensure that I could keep up with the payments BUT I do wonder where this rage the GOP is spewing was when this was a rep administration handing out billions of dollars to banks like Halloween candy.

Anonymous said...

We have refinanced our loan a couple of times over the 22 years we have lived in our home, but mostly to make sure our children got an education. Right now our mortgage is less than half the market value of our home. However, if all this keeps going on around us, our market value will keep falling and falling and falling, even though we have done all the necessary updates to our home to keep it valuable. What makes me most angry are things on TV like HGTV that tell everyone not to buy a house that doesn't have granite countertops or stainless steel appliances or all the carpeting and painting all new. How do you know what all the buyers want??? Those programs need to be off the TV and their hosts like the "Freeman Beetches" run off the network. Let things sort out as they can without someone telling you what you want and need. WE are now retired and want to move, but can't due to the "market".

Anonymous said...

All this faux populist rage. People like Rick Santelli are a joke. For years he and others like him could find no wrong with anything in the markets. Now, they're outraged. He's a clown. He's nothing more than a pimp, like most of the screamers on cnbc. Spare me the Chicago teaparty, thanks.

I myself am sitting on a mortgage that's underwater and I continue to make my payments because 1) I believe the underlying value is sound and will come back up (I live in a great neighborhood) and 2) I don't want my credit to be destroyed. I don't expect to be "bailed out" but I am very much in favor of taking steps that will stop the cratering of our markets and the endangering of our banks.

Anonymous said...

RIGHTISRIGHT the STD Prevention part of the Package President Obama signed is for $335 Million and there is no $2B for (ACORN) as FOX News reports which forgets to add it's an ACORN (CANADA)stimulus plan .

Anonymous said...

For got at add details of the Obama Stimulus package can be found under a search for the American Recovery and Reinvestment Act of 2009.

Anonymous said...

Anonymous said...

Look at the stock market its still going down, but you got people putting money into it. NOW THATS STUPID...
February 20, 2009 1:43 PM

That isn't stupid - that is common sense and good knowledge of history! If people stop putting money into the stock market and pull all their money out, the stocks will continue to fall - thus creating a huge crash.

I agree with a previous poster on pleading with the powers that be and all related media outlets to STOP telling everyone about the doom and gloom. That doesn't help anything and just aids in creating panic.

Not a big fan of this bailout - or of a lot of things in our current governing system, both national and state. Would love to see a major overhaul but what that should look like...who knows. I would like to know if our representatives are taking a pay cut or pay freeze what with this "crisis" and all. If we need to tighten our belts I think they should be doing the same.

Anonymous said...

"To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, 'the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.'"
-- Thomas Jefferson

Anonymous said...

Americans have been getting dumber for decades, so why did anyone think it made sense that the standard of living would keep rising?

Especially with world competition catching up with the lead America gained after WWII?

Yet, Americans kept focusing on the idiot issues (war, drugs, entertainment, religion, "political culture wars", sports) and ignored things like education and science which would have helped them stay ahead.

America is just plain partied out and now it's time to pay for the stupidity.

Anonymous said...

"Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve... But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn't belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay ... No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic."
-Frederic Bastiat

Anonymous said...

The ultimate blame should be placed on our banks. They are the ones who started this mess, but don't want to do anything to help end it. They could very easily have worked with homeowners who were having difficulty making their mortgage payments but they never have and never will unless the government steps in and makes them.

We are a country that is not run by its people or by its government, but by banking executives. These executives have nearly destroyed America and in my mind, are nothing less than corporate terrorists. These execs should be locked up in prison for a long, long time.

Anonymous said...

As of yesterday ACORN had organized blacks in 7 US cities to protest their houses being foreclosed by using force if necessary. I call that un-American. Someone is giving money to ACORN.

Anonymous said...

2:56, I couldn't agree more. We fought so-called culture wars and glorified spoerts and violence while our innovation lead was draining away and our young people abandoned math and science in droves for the false riches of Wall Street. This is what we have to show for our foolish ways and glorification of quarterly results.

chupacabra said...

Has anyone done any studies on exactly why the people who are in this mortgage mess are in trouble?

Was it ALL really people buying more home than they could afford or are their other factors?

My guess is that this is a lot more complex than just people acting irresponsibly.

How many of these people bought homes as interest only planning to sell and then when interest rates went up they couldn't make the payments

How many people got laid off and could not make their payments

As for the give up the dream of home ownership argument, how realistic is that? People have to live somewhere. Renting isn't magic, someone owns that home and whoever it is only rents it to make money. If the rent on a house is enough to make the home owner money then how it that cheaper for the renter?

Anonymous said...

Yes, there were some irresponsible people who should never had bought a house.

But then there are others. Like myself.

I lost a high paying (80K a year) job due to outsourcing to India.

The only jobs I could find paid $11.00 an hour.

I had to stop paying my credit cards, lost my car and struggled to make house payments. I couldn't re-finance because my credit was ruined.

So, according to some of you very un-Christian people, I don't deserve help.

Well, I do, and so do others like my who have lost their jobs.

Any foreclosure can ruin a neighborhood and the property values of houses in that neighborhood. For that reason alone, everybody should support mortgage relief efforts

Anonymous said...

This is the result of legislation passed forcing banks to give loans to people that didn't have proper down payment or sufficient monthly income to afford them, once the "interest only" grace period ended. The individuals that bought these homes were low rent or no rent. They "just stays there" until the foreclosure kicks in.

Anonymous said...

Half the people calling the folks in foreclosure "idiots" know no more about money and financing than the rest of us. We go to "professionals" who evaluate our credit, and tell us how much home we can afford, what a great investment it is, how it'll double in a decade. I am college educated in health sciences but will be the first to admit finance escapes me. Don't be so quick to point fingers.

Anonymous said...

1. Re: Cobra- not everyone has to pay a huge premium. You are lucky, but for many, many people there are cheaper options than COBRA and if we the tax payers are paying, we need to be as cost effective as possible. If you want that benefit, you should get the least expensive insurance you can find, which unless you have conditions is unlikely to be COBRA.

2. How the heck hard is finance? It's called a BUDGET. Add up all your expenses, home, car, food, utilities, retirement. entertainment, plus savings for a rainy day. Plan for a rainy day. I always wondered how people could afford an Audi, 2 kids, a house in Midwood with granite and stainless... on one income, a pedigreed dog and dinner out. I guess all it takes is blindness to common sense and an unrealistic budget.

rockdale said...

The problem is that we no longer have the luxury to do nothing and just hope for the best. Most credit users are responsible just as most lenders are prudent. The trouble is that the largest financial sector companies for the most part acted like utter fools, and we all now are paying the price. With an estimated 10 million "home owners" (I have to use that term very loosely in this case) underwater, the housing debacle is touching even those who are totally solvent. If there are foreclosures left and right in your neighborhood, even the home owner with 100% equity is being severely affected.