Posted on 09/27/2008 7:44:44 AM PDT by Graybeard58
"You can't be for capitalism on the way up and socialism on the way down." — Former House Speaker Newt Gingrich, Sept. 21, 2008.
From 1960-95, the U.S. homeownership rate was 63 percent, give or take a point or two. For most of that period, liberal politicians and others browbeat financial institutions about redlining unqualified borrowers. During the Clinton administration, liberals finally prevailed, and lenders were forced to relax their rules. By 2005, the rate was 69 percent. Then the housing bubble burst, foreclosures rose, and the rate retreated, albeit unevenly, toward its historically sustainable level.
Back in the day, the rule was not to spend more than 30 percent of one's net income on housing costs. Today, a record 7.5 million households, people who by definition have no business owning a home, spend more than half of their income on housing. It's why the foreclosure and economic crises are so acute.
Americans have read and heard a lot lately about the millions of families facing foreclosure. These victims of predatory lenders, greedy financiers, lax regulators, etc., have been portrayed as modern-day Joad families whose American dreams are being dashed not by the Dust Bowl, but the Wall Street Sugar Bowl. This heart-wrenching narrative has been concocted by politicians who say America now must borrow up to $1 trillion to keep these poor souls in their homes.
Knowing reporters are trained to put human faces on their stories, we spent a few hours this week Google-searching flesh-and-blood victims, but found mostly Joadian generalities and statistics. Among the handful of innocent victims we did find were:
Dolly Hanna, a stay-at-home mom from San Francisco. She and her mechanic husband bought five houses as investments, but now find themselves "overextended" by $15,000 a month and unable to sell any of their properties. But it's not their fault.
Rita Harvey of Las Vegas. Her monthly income is $3,300 in government checks, committed to an $1,800-a-month mortgage that has reset to $2,700. "I did not understand that in two years, this would adjust out of control." Not her fault.
Okelie Bentley and her mother. They bought a $624,000 house in Staten Island, N.Y., with a $4,700-a-month mortgage. Next year, the loan will cost them at least $1,000 a month more, which they can't afford. Not their fault.
Candace Weaver of Wilmington, N.C. She and her husband got an 8.8 percent mortgage, but "didn't realize" it would jump to 15.8 percent in two years and eventually would require a balloon payment. "(We) didn't do anything wrong. ... (W)e're the victims."
Far from Joads, many of these innocent victims got burned by their own greed, stupidity and irresponsibility. Now through "the Wall Street bailout," play-by-the-rules Americans are expected to rescue housing speculators, predatory borrowers, illegal immigrants, etc., by giving the government $700 billion so it can forgive some or most of the debts of the greedy and irresponsible, then write them more affordable mortgages. And we would be remiss if we didn't mention a whole subclass of bailout beneficiaries: all those homeowners who upon hearing the government intended to help the innocent victims purposely went into default on their mortgages in hopes of getting easier terms.
"The Wall Street bailout," play-by-the-rules Americans are assured, would save the economy and make them money. You see, the financial wizards of Capitol Hill, who had America on the road to ruin long before the mortgage meltdown, say they can spin worthless mortgages into gold, and none other than Bill Clinton vouches for them. (Even if this hubris were true, it's still a lie because whatever "profit" the government might turn would be spent long before play-by-the-rules Americans know the politicians have it.)
The alternative, the Mafiosos of the Beltway threaten, is financial panic, bank and business failures, a stock-market crash, further declines in home prices, more joblessness and a "long and painful recession." So, play-by-the-rules Americans, your choices are: Submit to another government shakedown so it can reward the stupid, greedy and irresponsible for gambling and losing (impose socialism on the way down). Or stand your ground, in which case the government will break your economic legs and burn down your financial house, and make it look like capitalism did it.
Now the bad news: If the polls are right, upward of 90 percent of the people who would do this to you will be re-elected Nov. 4, and it will be called "change." The winners and holdovers will include some of the guiltiest scoundrels who today are being toasted as heroes for their work on "the Wall Street bailout," which no one guarantees would do anything more than waste your money, erode your freedoms and draw out the economic pain to come.
The sad news? No matter what happens, the darkest days lie ahead.
"Back in the day" for the author must not go back as far as my "back in the day". Conventional wisdom in my day was not more than 25%.
I'm proud to say that I don't have a mortgage. Nobody owns my house except me, my wife and the real estate tax collector.
Ping to a Republican-American Editorial.
If you want on or off this list, let me know.
Gingrich is not a stupid person.
‘By 2005, the rate was 69 percent. Then the housing bubble burst, foreclosures rose, and the rate retreated, albeit unevenly, toward its historically sustainable level.’
-- Obviously the article and the Gov’t does not properly know how to calculate homeownership or does not have a proper definition of it.
If you ‘were’ a homeowner you wouldn't need a mortgage, because you owned the home. If you have a ‘mortgage’ you don't own the home, your bank does.
That was our philosphy when we purchased our home, it was 25% of our NET. For those who are above that, “you made your own bed...”
“Candace Weaver of Wilmington, N.C. She and her husband got an 8.8 percent mortgage, but “didn’t realize” it would jump to 15.8 percent in two years and eventually would require a balloon payment. “(We) didn’t do anything wrong. ... (W)e’re the victims.”
This pretty much sums it up. IDIOTS!!
i'm asking that question a lot lately. All of this is so interesting to me because we ought to let it all fail, come what may, and let nature take its course. Organic capitalism always works.
The poor things...
So true.
None of us can own property in America anymore. We are all, every one of us merely leasing till death.
If you don't believe it, stop paying your property tax and see how long you keep your land.
By that definition, nobody owns any real estate anymore.
You are leasing it from the government.
Pay cash for land. 'Own it' outright fee simple.
Then, stop paying your property tax and see how long you really 'own' anything. LOL. :frown: [sad sigh]
Yeah, no kidding. Lets not even bring up Eminent Domain as well. I don’t want to destroy my computer; too much football today to check up on.
The Democrats rig the “rules” to benefit themselves. Nice little liberal elitist society we’re building. And Washington is practically worthless. A little bazaar of Federal handouts, where people get wealthy spending taxpayer money.
And any guesses as to flavor of party they prefer when voting?
Well, I 'spose if conveyed in the proper fashion, even debt can be considered a good thing.
Alas, where is the hope to come from.
I have been making that point for years. The supercapitalists on this site have been trying, using all sorts of financial tricks, to convince me otherwise.
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