Housing Crisis

25 08 2008

A “housing crisis” has been the cause of much wailing and gnashing of teeth lately. The only “crisis” involving housing for which I can find much evidence involves the ridiculous prices for any sort of domicile in my local area (prices start north of $50K for a burned-out- foundation and get stratospherically worse from there).

 

How many people are actually defaulting on their mortgages? Is this number significantly larger than before the so-called “sub-prime” lending spree? The data I’ve been able to gather suggests the answer is NO.

 

As far as I can tell, most of the people currently defaulting on their home loans are those who would probably default on a one-dollar loan and the so-called “flippers” who feature so prominently on cable TV. These flippers gambled that they could spend a few thousand to put lipstick on a pig and sell the resulting upscale hovel for a fortune. The boom times of the housing market came to an end (as all booms tend to do), and the flippers are now weeping piteously in front of any TV camera within sight or hearing because they failed to notice the signs of the inevitable crash.

 

There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.” –RAH

 

Sadly, Heinlein’s rational jurist in the story “Life Line” is not present today. In lieu of intelligent reasoning, the vermin which infest our legislature are falling all over themselves in their haste to bleat platitudes about “solving” this non-existent housing crisis. Woe betide any politician who failed to rush forth and save the poor, suffering masses who are at risk of falling victim to their own poor decisions. Our elected Oafishals seem hell-bent on burying this illusory crisis under a mountain of money. Our money.

 

What is our Gummint (the members of which are ever so concerned about the plight of the “victims” of the housing crisis) doing to help out the vastly larger number of homeowners who are actually making their mortgage payments? What about the folks who have long since paid off their home loans, but are now facing foreclosure because of soaring property tax hikes? I’ll tell you what the Gummint is doing: It’s bleeding those responsible home-owners dry, and giving the resulting largess to irresponsible home-owners. What ever happened to personal responsibility?

 

Companies and individuals who chose to gamble in the volatile sub-prime lending game should be permitted to suffer the consequences. Stupidity should be painful, so that the stupid can experience the consequences of stupidity. Preventing those who act stupidly from the consequences of their actions also prevents them from learning from their mistakes. Those who fail to learn from their mistakes will invariably repeat them. How can anyone rationalize this as being in the Public interest?

 

Therein lies the real crisis. The Gummint treats those of us who save money and pay our bills on time as pariahs, but those who make poor decisions and suffer the consequences thereof are lavished with money … at the expense of the others.

 

 

Current status: Curmudgeonly

Current music: Bolero by Ravel

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One response

26 08 2008
Patrick

I agree with your central point: the gov’t has acted (and continues to act) poorly in regard to honest, hard working people who aren’t making bad decisions. And yes, legislators are busy bailing out greedy, over-reaching investors with our tax money. But that’s not the worst of it, nor the ‘real’ crisis.

Unfortunately, I can’t really condense the bigger picture, except to say it’s all about the Giant Pool of Money. A couple of months ago, ‘This American Life’ did an episode dedicated to this very subject – and it’s a great deviation from their traditional format. Using first person stories from people involved in and affected by the subprime crash and the ensuing chaos, they actually explain what the fuck is going on. In very simple terms.

You can go HERE to listen, or download a PDF of the transcript. It doesn’t directly address what’s happening with inflation, but I think that’s pretty obvious.

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