Sep 30th, 2008 at 1:58 pm
What Is To Be Done?
Michael Ettlinger talks about what happened yesterday and what the best way to move forward would be:
Tell your friends.
25 Responses to “What Is To Be Done?”
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September 30th, 2008 at 2:30 pm
Does the medicine have to be soporific?
September 30th, 2008 at 2:35 pm
Nice piece, though if the problems in the financial sector might, in the next month or so, start showing up for the rest of us as shortages in stores, maybe layoffs, why not wait for a few weeks to see if that happens? How quickly does liquidity travel through the economy? And the plan that almost passed, but didn’t, doesn’t really do anything about restructuring mortgages, does it? It just proposed to buy up a lot of the fractional mortgage securities. How do you adjust a mortgage if you only own a small percentage of it?
On a different issue: Man, CAP needs to get a new design team. Brown, gray and blue are nice colors for the Civil War, but not so great on the website. And what’s with the blurry text and clunking sound every time the CAP logo shows up on the video? Those elements are distracting and unnecessary at best, jarring at worst.
September 30th, 2008 at 2:38 pm
He says that reducing home values “will harm all of us.” Do I own a home that nobody told me about? Is it so bad a thing that people who bought over-valued homes find themselves with less money than they thought? I think Matt mentioned in another blog post that it is a mistake for progressives to push home ownership as much as they have. I’m not a progressive, but I thought that someone should advocate for non-homeowners. Looking around the political landscape, I’m having a hard time seeing who that is.
September 30th, 2008 at 3:13 pm
So we need to reduce the amount of existing loans to reflect the current value of the home the loan is for? So, if I bought a house for $600,000 two years ago, and the house is worth only $400,000 now, I should only have to pay based on the current value of the house? How is that not a bailout? I think it would be “reasonable” to expect people not to buy a home they can’t afford at the height of the market, and “fair” to require them to meet their obligations or face bankruptcy (cases ionvolving fraud or shady lending practices aside, of course).
September 30th, 2008 at 3:13 pm
Well, it’s not refreshing to see the “I’m alright Jack, screw you” attitude as prevalent on the Left as on the Right. Thanks for sharing your indifference to the rest of us, Steve.
Is it really necessary to point out that a home only becomes “overvalued” when the housing market collapses, and what you paid originally might have been “market value” at the time, or even a very good price? My wife and I put 40% down on a very modest house 5 years ago, — a house which was valued well under the market rate in our area because the owners were anxious to sell — and we could not make back our investment in the current market. (To put that in perspective, our mortgage payment is less than the rent on a good 2-bedroom apartment in this area.)
There are all kinds of ways in which this is impacting people already. Suppose you get an excellent job offer in another area — you can’t move because you can’t sell your house. Your wife gets seriously ill, you blow out your medical insurance — you have no equity in your house to borrow against to meet the immediate expenses. You are injured on the job, can’t work, and can’t renegotiate your mortgage because the credit crunch has driven the rates beyond your reach. Many people of modest means have invested their “savings” in their homes, relying on the hard currency of real estate for their retirement. There is nothing “irresponsible” about that. Now, after decades of living within their means in order to protect their investments, they stand on the threshold of losing it all. And the response here is, “Oh well, too bad for them”?
There will always be a large portion of the population who don’t see why they should pay taxes to educate someone else’s kids in public school, or pay for wilderness parks they will never visit, or pay to pave a street in some other part of town. The answers to those complaints are obvious to some of us more than to others.
We are a society, not an aggregated collection of individuals. As such, we all carry water for each other, or we all die of thirst.
Thanks.
mp
September 30th, 2008 at 3:17 pm
I am a very reluctant supporter of the Paulson/Frank/Dodd bailout, largely because Paul Krugman and others seem to think that it might be the best we can do in the real world and doing nothing is not an option.
Fine, as far as it goes. But if Hank Paulson really want to show that this “rescue” is essential and that all the taxpayer money will be repaid, he could go a long way towards convincing me and about 300 million others if he invested some considerable fraction of the roughly $700 million that he has personally into this thing.
It doesn’t have to be all of it. Maybe he needs $25 M over the next 5-10 years, I don’t know. And the same for the rest of those Wall Street guys. Some $60 billion in bonuses this past year. Couldn’t they come up with at least $15-20B to get us started?
If the average taxpayer sees the big players have skin the game, then maybe enough people will be reassured that they are, you know, not getting played.
September 30th, 2008 at 3:21 pm
Is it so bad a thing that people who bought over-valued homes find themselves with less money than they thought?
Less money for rich people means fewer dollars in your tip jar. (sad but true)
September 30th, 2008 at 3:32 pm
If the subprimes being restructured makes sense economically why aren’t the banks doing it themselves?
September 30th, 2008 at 3:37 pm
That might sound satisfying, but I don’t want the Teasury Secretary making personal investments based on his policy.
September 30th, 2008 at 3:46 pm
Less money for rich people means fewer dollars in your tip jar. (sad but true)
Listen to scythia, pal, he’s got it right.
So while you struggle along at your redcap job, carrying heavy luggage at the Hilton, trying to pass that economics course at your community college so you can someday be qualified for a better-paying job, remember scythia’s advice.
If the rich people get less rich you’ll be carrying those bags for no tips. That’s how it works.
Hey, was that a communist over there? Call out the guards! We can’t have those vermin scurrying around in a free country.
September 30th, 2008 at 3:55 pm
I really like the idea of fixing this problem as much as posible at street level. So the part of the video on getting mortgages in a payable, realistic footing sounds great to me.
November 27th, 2008 at 11:38 pm
President Bill Clinton once confided to an aide,
December 10th, 2008 at 10:36 pm
EA Sports drops NCAA Basketball 09 today and one familiar voice you’ll hear in this year’s game is ESPN sideline reporter/internet superstar Erin Andrews. Andrews took a break from jetting across the college sports
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