Thursday, October 9, 2008

Angry-Making

It's driving me nuts that everyone can suddenly see just far enough to blame the sub-prime mortgage crisis for the current financial situation, but not any farther to the factors of greedy inflation and lack of regulation that truly created the sub-prime mortgage crisis in the first place. They point the finger at the lenders and buyers and governmental mandates and "good intentions" involved in purchases of less-than-affordable housing by less-than-affluent buyers, but NOT all the way back to the simple importance of housing, and to the house-flippers and other investors who, let me make this very clear, artificially drove up home prices in the first place.

News flash - housing is just not meant to be an easy short-term investment for people who never intend to occupy. It is meant to be a good long-term investment for people who take shelter there, for people who call the place home. One could even say that the tendency to look at housing as anything more than shelter is the immediate cause of most housing-related problems in America today. I mean, I get it. If you're rich, you deserve access to cooler housing than us po'folk. Right on. But should that mean that if you're poor, you deserve no access to any kind of housing? Or, worse yet, if you are solidly middle class, you should not be able to afford to buy a home for yourself & your family merely because others (most of whom already own their family homes) were "smart" (greedy) enough to buy second, third and fourth "investment homes" when they were affordable for normal folks?

Stay with me here - this kind of activity reduces supply AND drives up demand. It creates, from thin air, a housing bubble. And it drives regular people out of the housing marketplace, which is then filled with vacant houses for sale at inflated prices. Regular people wait this kind of market out if they can; if they can't, because (duh) housing is something that some people actually need, they get themselves into mortgages where they will be upside-down in a heartbeat once the bubble bursts. They do this because, they are told, housing is always a good investment. They believe that the value can only go up. But like so many other investments, this is only incontrovertibly true in the long term. And who in their right mind would want to hang on to a house for 10 or 20 years? Maybe only a family who'd want to live there.

Those folks, the ones who deserve access to reasonably-priced housing and happened into the market at the wrong time, are the ones who are getting thoroughly screwed at this point. They bought into the system way too high and their lives are getting yanked out from under them. I don't feel too sorry for people who had their homes before all this mess and are seeing the value fall; the value should fall. The market is just correcting itself after the hideous, artificially-produced bubble. Very few, if any, of this group should see their home values fall below what they were prior to this wicked boom, unless they live on a foreclosure-riddled block. Too, I may feel bad for them on account of other crappy economic factors, but I think they're gonna be okay when it comes to home values.

So all these conservative pundits today are smugly deriding the "good intentions" of "liberal" lawmakers who wanted affordable housing options for sub-prime buyers. It goes something like this....

Those liberal bastards! They wanted people to have shelter, and to gain some equity on that shelter! Those bleeding-heart rats! Didn't they know that all the good real-estate was snatched up early by those smart house-flipping investors? Maybe we did go ahead and sell some of our $100k houses to those po'folk for $200k, and the $200k houses to the regular folk for $350k. But we made a tidy profit! That's our right in the free market! And we stand by as those homeowners continue to get thrown out on the street, en masse, across the country, blowing their brains out, weeping, and praying, telling their children it'll be OK. When the market collapses as a result, we adapt quickly, learn to ignore our cherished free-market principles, and cry foul. Not on behalf of those regular folks, or those formerly and newly poor folks, who have lost everything; on behalf of our wallets, bruised as a result of their vital losses. After all, who could have predicted that the bubble would burst? Who could have predicted that mortgage-backed securities would someday reflect so little value? There's no way we would have undertaken that kind of risk. Never mind that the market is all about risk, that we love risk when it profits us; we despise it when it bankrupts us. That's when the government should step in, to save us from economic crisis once it's already too late, not to regulate the nature of the profits and prevent the crisis in the first place!

I have never seen such an infestation of red-tie, free-market suits crawling to the teat of socialist government controls. John McCain wants to nationalize mortgages and subsidize the ridiculously inflated principal amounts that caused this mess???? Are you fucking kidding me? That is the most socialist thing I've ever heard, you pinko commie. How about if you had simply allowed the regulations that would have prevented outrageous home value inflation and thereby steered us clear of this bullshit in the first place? You hypocrite. You want to swipe up that suggestion of the "most liberal" Senators you constantly deride, who would have been perfectly happy to regulate the housing market when it was needed, and claim it as your own "new idea" because you think it will sound good to the voters, even though it stands in grave opposition to every goddamn thing you stand for? You swine. How very "bi-partisan" it is of you to lay claim to the ideas of your opposition, you bloated, arrogant, bloviating shell of the man you once were.

So. I'm mad. I'm just a dumb kid, really, and I saw this coming. Just like the fucking war... No one in their right mind believed that Saddam had crafted WMD from thin air in the decade following the first Gulf War. How is it our ennobled leaders can't see this crap coming when regular folks who simply pay attention can? And when, oh when, will we stop this madness of letting the profiteers get away with murder when the markets are bouncing and then breaking the fall once their safely-banked profits have vampirically drained the value from everything? Will the enormity of this situation finally teach Americans the lesson that there is so much more value in regulating long-term stability than in permitting the short-term opportunity for the rich to get richer? Can we use this golden opportunity to make it clear, at last, that the chance for some to own the whole damned pie is not more important than the need for everyone to get, and hang onto, their own little crumbs of the crust?

Oh, God.
I think I know the answer.

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