Situational Envy
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- February
- 19
There’s a lot of grumbling from the people who feel they were smart about their finances and aren’t overextended with their mortgages. Seems the mortgage bailout goes to (surprise) people who got themselves in trouble.
It’s easy to bristle over this one (I’m a conservative, 30 yr fixed guy myself..) but there is good reason to hold our noses and hope this works. Basically – other than from a purely empathetic standpoint – the more people we keep in their homes, paying their mortgage, the better it is for the economy/housing market/your job security. Like it or not, if all the people who are in trouble are left to fall, we all go down with them.
This entry was posted
on Thursday, February 19th, 2009 at 11:11 am by Matt Davies.
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Just another case of rewarding the irresponsible in this country and punishing the responsible. There was a time when
irresponsibility was not tolerated and if you were irresponsible you were left to sink which basically taught
you a lesson. The only lesson learned in this country now
is “screw up” and you will be bailed out. Forget the stimulas package, with this type of thinking the country
will end up in the crapper anyway.
I’m sorry, but I have to agree, in part, with Bulldog. Why should someone stay within their means if not doing so results in the government (read this as taxpayers) bails them out with no penalty?
Buying a home that you couldn’t afford is not the product of “predatory lenders”. An adult should be able to figure out that on a given income, certain things cannot be afforded. CBS-TV news had a report a few nights ago about a single mother in Queens who earned less than $30,000 per year and obtained a $550,000 mortgage with monthly payments of $4000! Surprise, surprise, she couldn’t afford it and fell behind and is now fearing forecalosure. Now I’m providing the lifeline to her? What reward do I get for staying within my means, paying my bills timely, meeting my obligations, etc? How about a nice fat tax break for starters? (Uh-Oh, I’m starting to sound like a Republican now. Quick, somebody get a picture of GWBush to scare me staright again.)
I recognize that my home value has decreased by virtue of the acts of so many morons who borrowed too much or bought too big, and the banks who lent them the money just to get the up front fees on mortgages they would sell in the sceondary market, but can’t I get some recognition for not doing the same?
I bought a house that my wife and I could afford (back in 2003—30 yr fixed) but in the meantime the market went up up and then down down down.
If the mortgage on my house exceeds the value, why shouldn’t I give it up? Well, when everyone starts to do that, there will be more supply, and lower prices, and then the “circle of people who are underwater” will just get bigger and bigger… More people will consider stop making payments and just walk away from their homes.
I blame lax lending requirements for driving home prices so high for people who actually want to (gasp) live in them.
We sure didn’t hear any grumbling from the neighbors when all the new frenetic new construction and skyrocketing housing prices caused the value (at least on paper) of their homes to go up, did we?
Get over it people. The gains were an illusion. A house is a place to live in. It’s not an “investment.” Be grateful you still have a place to live.
I accept that the increased value of my home was largely illusory. It is the fact that I am now being asked to subsidize the irresponsibility of others that bothers me. My home is my home, nothing more, nothing less. It’s been paid for, by me, with earnings generated by me.
Those who bought more than they could afford deserve, in most cases, what they got. Unfortunately, while they drown in debt they created, they’re pulling the rest of us under.
It is the fact that these same people blame others for lending them the money that is most disturbing. The radio ads that continue to shout that if you’re drowning in debt, “it’s not your fault” infuriate me…it is your fault. Accept it, just don’t burden me or my children or their children with the cost of having to bail you out. Like the drunk whose given a drink, you’ll be back.
I consider myself an intelligent guy. I’ve got a bachelor’s degree and have enough years on me to have gained some wisdom. But when I bought my house, there was a certain amount of trust I placed in the people who sat across the table from me. I certainly didn’t understand all the fine print in the multitude of legal documents that I signed. I was told I could afford the house I was buying. I had to trust they knew what they were talking about.
This was back in 1999 before absolute greed took over the industry, so luckily it has all worked out for me so far. I am making my mortgage payments, and my house is worth more than what I owe at this time.
But at some point bankers got reckless. They told people they could afford houses that they knew they couldn’t. Once the sale was made, the bankers shuffled the mortgage off to other bankers and, voila, they had their money. It didn’t matter to them what became of the situation after that.
Sure I agree that the buyers should have been more careful, but when the experts are saying that you can afford that wonderful house, it’s hard to resist. This was a two-way street paved with greed.
In general, Topgunner, I agree with you, but I think you are missing the other point of view that some buyers were taken by greedy bankers. And the bottom line, which you mention, is that we need to do all we can right now so that we all aren’t dragged down.
David Brooks of the New York Times summed it up nicely in his Friday column.
“The nation’s economy is not just the sum of its individuals. It is an interwoven context that we all share. To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.”
The danger, in the long term, is the creation of a “New Normal”, where delinquency is curried, even nurtured, to gain entre’ to anticipated “rescue” measures.
Decades ago this mind set broke the welfare system. Those broken by the broken welfare system went on in turn to break the Chicago educational system, and Chi-town’s broken educational system (in part) bred the entitlement foundations which nurtured the aspirations of many Chicago pols, including our new President.
When the money finds bottom, at 100 dollars to the Euro, and the Dow finds bottom at 450, we will have reached the end of this short-sighted national vision, everybody newly equal, living off the illicit finances of the underground economy, skimming whatever entitlements we can get certified for, believing adamantly in nothing at all, in a word…. totally miserable.
Looking out from the old vision of a working America, to the new vision of an entitled wasteland America, we resent the parallax.
It is not situation envy.
It is the mourning of a dead society’s passing.
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Peace.
You might call it the Chicagoization of America.