Be a victim, get a reward. It's the new American dream, brought to you by bailout cash.
Today, we are a society devoid of consequence. That means losers will be winners, and winners will be losers. It means the person who buys a home he can't afford will keep a big home, no matter what. Government will keep him afloat. The person who lives within his means will get no reward. He will, in fact, be punished by the limitations of his means. He will pay for the other man's big house.
Throughout the 1990s and most of this young century, people bought houses with careless disregard for their ability to afford them. They bought these homes with overpriced mortgages and agreements that the interest rate on the loan could change at any time, increasing the payment by hundreds of dollars. They bought them on a hope and prayer that market conditions wouldn't change. They drove up housing prices, making the man in the mobile home more hopeless by the day.
Today, the market is trying to do its job by punishing bad decisions. It is causing foreclosures on ignorant, nonsensical home mortgages. In doing so, it is creating a once-in-a-lifetime opportunity for the millions of responsible Americans who didn't buy overpriced houses they couldn't afford during the past two decades of artificial housing inflation.
In some cities, yesterday's half-million-dollar suburban monster home sells for $100,000 or less. For the owners and lenders it's a nightmare. For first-time homebuyers it's a dream come true. It's the free market punishing irresponsibility and rewarding patience.
It's the free market accomplishing what government could not: affordable housing for working Americans. It's the free market forcing the irresponsible borrower to rent a mobile home, vacated by someone who waited for his chance.
But President Barack Obama has what he considers a better plan. Instead of allowing this perfectly natural process to run its course, Obama wants to keep irresponsible borrowers, or those who've had bad luck, in their homes at the expense of everyone else. Wednesday he announced a $75 billion bailout plan, in which defaulting borrowers will be coddled like children who've been given a second allowance for squandering the first.
Meanwhile, all the patient people who lived within their means won't get to buy the foreclosed-upon homes. They'll continue living in apartments and trailers, paying for those who overextended themselves to continue living beyond their means. It's contemptible.
It all became a bit too much Wednesday for CNBC financial reporter Rick Santelli.
Standing on the floor of the Chicago Board of Trade, after hearing the Obama mortgage bailout plan, he lost it on live TV. Here are a few choice excerpts from what may be the rant of the year:
"The government is promoting bad behavior... The new administration is big on computers and technology, so how about this, president and new administration. Why don't you put up a Web site to have people vote on the Internet as a referendum to see if we really want to subsidize the losers' mortgages, or would we like to at least buy cars and buy houses in foreclosure and give them to people who might actually have a chance to actually prosper down the road and reward people that could carry the water instead of drink the water..."
Traders overhearing the tirade interrupted with applause. The anchor at CNBC chimed in, in response to the applause, saying: "They're like putty in your hand."
"No they're not Joe. They're not like putty in our hands. This is America," Santelli says, turning to the floor traders. "How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills, raise their hands."
Traders boo the idea.
Santelli: "President Obama, are you listening?... Cuba used to have mansions and a relatively decent economy. They moved from the individual to the collective and now they're driving '54 Chevys."
Back at the network, the anchor asks Santelli what he thinks of predictions that 40 percent of failed mortgage borrowers will continue to fail even with interest rates reduced to 2 percent.
"You could go down to minus 2 percent and they can't afford the house," Santelli said.
Santelli went on to suggest a Chicago Tea Party in July, in which derivative securities would be dumped into Lake Michigan. He promised to organize the party for any Americans who wish to show support for capitalism.
"You can't buy your way into prosperity," Santelli said. "...If you read our Founding Fathers, people like Benjamin Franklin and Jefferson, what we're doing in this country right now is making them roll over in their graves."
It was a rant for the ages, full of wisdom and truth, by a reporter pushed to the brink. It was a rational reaction by one man who understands the danger of a country that rewards all failure, by taxing all success.
No comments:
Post a Comment