What Passes For Conservatism These Days
The commenters over at the WSJ aren't fooled:
o Ben Silverman wrote:Regarding Senator McCain's plan to have the Treasury buy bad home-loan mortgages; this is the exact same plan that Bill Ackman of Pershing Square Capital suggested on Monday at the Value Investors Congress in New York. Ackman, however, did not take credit for it. He said the idea was presented to him by someone in Boca Raton, Florida and alluded to the person being involved in the home building or mortgage industry.
Thought it was interesting that I heard about this idea two days in a row. More so because the second person to talk about it took credit for it. :)
o Robert Avram wrote:
I can't understand McCain's plain
"the government would buy the mortgages of homeowners who cannot afford their monthly payments to help prop up the troubled U.S. housing market. The campaign said it would be implemented using authority granted in the $700 billion rescue plan just passed by Congress."
So let me get this straight. You have two neighbors who both overpaid for their houses. One got a fixed mortgage, lives within his means and makes the payments he contractually agreed to. The other got an adjustable mortgage, HELOC'd to buy a Hummer, Granite Countertops, and some plastic surgery for the wife, and is behind on his payments. The deadbeat gets a handout from John McCain courtesy of the taxpayers...while the responsible person gets nothing? That's outrageous!
Of course it's outrageous. What do you think the effect will be on tax rates, interest rates, and the US Dollar long term? How about up, up, and down. The beauty of the American capitalist system is its ability to purge in order to start over again with a clean slate. McCain is suggesting that America not purge the system. The consequences will be felt for a long time to come and will most certainly be negative.
Charles at October 8, 2008 4:40 AM
Nonsense - the responsible person gets to _pay_ for it! That's something, isn't it?
David Janes at October 8, 2008 4:49 AM
Overvaluation of houses is what STARTED this problem.
McCain wants to continue that? I knew that Obama and the Dems were after that. John too?
Well, we've been saying for years that John's really a Democrat. I guess this settles it.
brian at October 8, 2008 5:01 AM
I think he's saying what he needs to say to get elected. This election will turn on who's promising the most freebies to the deadbeats. I have hope he would not actually do that.
Whether he will or no, I'll still vote him over Obama. I prefer not to be nuked in my sleep.
momof3 at October 8, 2008 6:21 AM
McCain has never been a conservative. He has just incorporated some conservative principles and is a generally a hawk on defense.
I watched the debate last night. I thought Obama, aside from breaking the rules by demanding a rebuttal, has the appearance of being presidential. That's all some people need after 8 years of President Bush butchering the English language. However, what really struck me about Obama was his 180 on the effective and proper use of our military. He talked tough on Pakistan, Bin Laden and surprisingly, Iran.
The Soros/Moveon.org left must be absolutely furious with Obama. Either that or they believe he is just moving to the middle out of political necessity and doesn't mean a word of what he is saying. Either way, it is a shrewd move by Obama. He is appealing to the moderate.
I think McCain is trying to appeal to the moderates as well, but with less effectiveness. His plan to buyout bad mortgages is staggering. As a conservative I was dismayed beyond words to hear this plan. He is alienating fiscal conservatives. He must know that, but figures that with Palin shoring up the religious right vote he can afford to do it. Besides true conservatives will never vote for a Marxist like Obama.
The other thing that struck me is how McCain has really followed Obama regarding all this class envy bullshit. Wealth is not finite. It can be, and is, created. For one to acquire wealth doesn't mean that some one else has to lose wealth. Its the big lie of the campaign...and of socialism.
If Obama meant what he said regarding foreign policy last night there is very little difference between the candidates right now. However, Obama's track record leads me to believe that he is lying about his foreign policy beliefs and is pandering for the votes of mnoderate/undecided Americans, who unlike, the far left don't hate America and its military.
Tom at October 8, 2008 6:35 AM
At the risk of sounding selfish... please DO let housing prices fall. Please DON'T keep the inflated housing prices up. I'd like to buy a house in the near future. They are currently overpriced. I'd rather not buy something so overpriced.
The whole problem began when lots of credit flooded the market, driving prices up artificially. Now that there is less credit, housing prices can come down.
NicoleK at October 8, 2008 7:53 AM
And another thing...
I own a condo in Boston. I bought it a few years ago after I had a break-up, resigning myself to the fact that I might not ever get married and find a home with someone else. (Of course, I promptly got married and moved out of town shortly thereafter).
I bought a small condo at a normal, fixed-rate mortgage, because it was all I could afford. Of course I would have liked a bigger place.
If the government bails out these people, I'll feel sorta stupid, like I should have bought a bigger place, because whee! The Government would pay for the extra cost now!
NicoleK at October 8, 2008 7:55 AM
Once again, Virtue got sold cheap in the name of crass populism. I just dint expected this from McCain. I used to support him but if this is what bring us decades of experience in politics, I am not a buyer.
Where is John Galt when you need him?
Toubrouk at October 8, 2008 8:01 AM
Amy Alkon
http://www.advicegoddess.com/archives/2008/10/08/what_passes_for.html#comment-1596137">comment from NicoleKAs somebody who rents a million-dollar shack in L.A., I'd love to see housing prices deflate. And as somebody who lives very frugally, I really resent bailing out people who tried to get something for nothing and live beyond their means -- or people who were too lazy or stupid to read contracts and/or hire a lawyer to do it for them.
Amy Alkon at October 8, 2008 8:55 AM
Since so many houses are now the property of the government, you should be able to move into your neighbours house, since your tax dollars paid for it (or at least use his pool and his Hummer).
Chrissy at October 8, 2008 1:11 PM
I hate to rain on the parade, but "the government" is not paying for anything. Government doesn't earn anything. It's controlling money via law, but that's it.
Money is an idea, not the gray n' green paper in your wallet. Think of the root of the word, "currency".
Some circulation is going to occur whatever the medium: barter, coins, gold, paper. What must happen is for a new, stable definition of "money" to be established. It will be complex.
It isn't paper. Any copy machine can turn that out.
It once included this peculiar definition: if you were owed something by someone, you could claim that as an asset, regardless of whether they could pay you. You know that's the problem with housing, but it's actually the problem with the entire monetary system today: unsecured credit. Not just houses, because a person in beyond his means on the house is/was also beyond his means on the car in the driveway, the pool, the horse out back, etc.
And now, a bunch of people are being children because they can't keep what they never earned.
I hope some of these take a lesson - enough not only to avoid doing this again, but enough to realize when they are being lied to by their "representatives".
Radwaste at October 8, 2008 3:19 PM
Not too surprised by McCain on this but it was so transparently a bone to voters and turns off a lot of people, especially fiscal conservatives (like me). That said, no matter who gets in, its likely the gov is gonna step in and bail folks out eventually. More than likely it will mean that when those homeowners go to sell it 5-10-20 years down the road, any and all profit/equity made since the "re-fi" will go to the government. Which in many cases means people would be smarter to just take the hit now and foreclose because otherwise they're just paying rent to the bank/fed gov with no chance of ownership.
Now if McCain said Uncle Sam would back up the banks making the re-fi's and got as many people in to 30 year fixed with a cut on their loans to current values, thats livable if not smile inducing. Course many banks dont want to do that, even tho many apparently are rewriting mortgages right now quietly to slow down the foreclosures. Check out a guy named Mr. Mortgage on youtube and his blog via google. Good info there.
McCain's whole deal about stabilizing values was just down right stupid. They're coming down, they have to as I don't see income shooting up to match the last 10 years of UNPRECEDENTED housing price appreciation. Houses that go up by 100% or more in 5-8 years is not sane, especially as income has not matched it.
As mentioned earlier, you stabilize the market and new buyers won't be able to get in and many won't want to buy. I sure won't. I'm thankful I didn't buy into the hype/pressure from dear ol mum to buy a house even though I have the means. Every where I looked in summer 07 I saw over priced crap that didnt pencil out. I've spent the last year laughing at RE agents and watching values finally drop.
Sio at October 8, 2008 4:03 PM
Oh, and I'm not just talking about the major bubble areas either like CA, Florida and Vegas. I'm talking about parts of Oregon with little economic growth jobs wise doubling house values in 10 years. 145k in 96 to 300k in 2005 easily for standard 3/2 1500-1800 sq ft homes.
Sio at October 8, 2008 4:07 PM
"Where is John Galt when you need him?"
Hiding in his top-secret lair, shielded from prying eyes by the latest technology, hanging out with the captains of industry, planning the new world of unfettered capitalism with no government controls.
Surprisingly, very much like Dick Cheney, except nobody's getting shot in the face.
Gog_Magog_Carpet_Reclaimers at October 8, 2008 4:54 PM
Rad - the reason banks are willing to renegotiate rather than foreclose is simple:
The housing market has collapsed. It's not on it's way, it's not teetering. It's done. Stick a fork in it.
The whole thing is right out of Econ 101. Artificially heightened demand leads to overproduction, which leads to inventory, which leads to a collapse in prices when supply outstrips demand.
So the very last thing any bank (that wants to remain in business) wants to do is find itself holding properties. Especially distressed ones (which many foreclosures are).
The doctrine of "half of something is better than all of nothing" applies.
brian at October 9, 2008 7:13 AM
brian, the biggest lender in the joint GA/SC area still has hundreds of millions to lend. The collapse's extent is being over-represented by hype because of the number of people upset that they couldn't do the high-school math, and those professing to speak for them.
Literally: there is money to be borrowed. NOW, you have to have good credit and means. What a concept!
But my major point is this: government, bailing people out? With what? Government doesn't earn a dime!
Radwaste at October 10, 2008 6:06 AM
Radwaste, I recently asked a realtor about the situation, and she assured me that if my credit was good there would be no problem.
NicoleK at October 10, 2008 7:20 AM
Leave a comment