Is a Bailout Backlash Building?
The great underappreciated issue of this year’s election is the ongoing expectation of irresponsible people that they ought to be bailed out of their own mistakes by the responsible. It’s a bedrock concern that cuts clear across party and ideological lines.
A recent ABC News story on the relatively strong state of home mortgages in Texas contained this fascinating note about the late-2000’s real estate bubble:
One of Alan Greenspan’s lesser-known contributions to the annals of the credit crisis was a pair of studies he co-authored for the Fed, sizing up exactly how much Americans borrowed against their home equity in the bubble and what it was they were spending their new found (phantom) wealth on. Greenspan estimated that four-fifths of the trifold increase in American households’ mortgage debt between 1990 and 2006 resulted from “discretionary extraction of home equity.” Only one-fifth resulted from the purchase of new homes. In 2005 alone, U.S. homeowners extracted a half-trillion-plus dollars from their real estate via home-equity loans and cash-out refinances. Some $263 billion of the proceeds went to consumer spending and to pay off other debts.
In other words, a great deal of the borrowing among people who weren’t all that creditworthy in the first place was not only based on bubble real estate valuations, but the money borrowed didn’t even go towards actually buying houses. It just evaporated into buying more stuff, with overvalued low-equity homes as the only collateral.
A person who’s borrowed only what they could afford to pay back looks at those numbers and says … well, they say things like this:
So lemme get this straight. You just HAD to have that McMansion with the granite countertops and the gold-plated toilets, so you bit on the 5-year ARM thinking oh, sure, you’ll be in upper management by then and making down payments on your summer home in Martha’s Vineyard, and this 6000-square-footer will be small potatoes. In the meantime, I get the split-level built in 1989 with the peeling popcorn ceiling at a fixed rate I know I can afford even if things go south for a while. You get canned, your rate balloons, and suddenly YOU’RE supposed to get help. YOU get six months without having to pay at all, AND get to refinance at a sweetheart rate while you look for another suit job. Where’s mine, Ace? If somebody really got swindled, well then okay, let’s figure something out. I can see a tweak here and a tweak there. But what’s the reward for being responsible? I haven’t found the bank or utility that takes righteousness for payment.
That’s no slavering right-wing tea partier talking; that’s my friend Lein Shory, who among other things is an Obama voter and confirmed liberal.
What is even more horrible is this idea now that the government has to insure that nobody gets hurt while investing in the stock market. The stock market? Isn’t it common sense that investing in the stock market requires an element of risk? The same with speculating in real estate? Isn’t there some sort of risk involved? But no, according to the Obama administration, if you do well in either the stock market or have invested wisely in real estate, you simply MUST be a crook or you MUST have cheated somebody. Note to Obama: Capitalism involves an element of risk. Stocks go up, then they go down. Real estate prices go up, then they go down, then they go up again. See how that works?
But in Obama’s socialist paradise, you’re never supposed to lose money. Unfortunately, you’re never supposed to make any money, either, because the government will end up taking most of it to make sure that nobody else has more than you do. You can all share the same lousy basic standard of living until the day you die, no matter how hard you work. What’s not to love?
Obama reminds me of those softball teams for kids, the ones that always give you a trophy no matter what you do or how poorly you play. Everybody has to be a winner, right? Problem is, how does that make the really good players on the team feel? Why should they play any harder if they know that, in the end, they’ll still get a trophy? The way things are going, get used to seeing a lot of lousy softball teams out there.
Amen! Amen! Amen! And you haven’t heard half of it. It was not just the ambitious and greedy who borrowed as much in equity as their houses were worth, it was the lazy and the gamers. People took out equity loans to pay their bills rather than work. And me? I saw all this coming and I was eager to buy the 500k house sitting across the street for the 200k that it is worth. But no! The government has to step in and the house across the street is offered by the bank at 325k though it has been abandoned for more than two years. Its owners walked away with money in their pockets. The free market should have been permitted to work. If it had, we would be out of this housing disaster by now and a lot of unscrupulous or incompetent people would have a lot less money to use unscrupulously or incompetently. Instead, we fed the devil.
It’s not just in financial matters that those who play by the rules get the shaft by progressives:
Bullies prey on schoolchildren? By no means expel the bullies, no sir! Outlaw tag instead. Make the good kids sit on a bench and suck their thumbs. That’ll teach ‘em!
Druggies use Actifed to make an illegal drug? Put the drug users in jail? Heck no, instead force the makers of the anti-histamine to reformulate the medicine so that it is less effective on congestion than the cardboard of the box it comes in. So what if the legitimate users now have to suffer from a painful condition once easily curable.
Gang members use a gun to commit a crime? Execute the murderers? By no means, outlaw guns instead. Now the law abiding victims can’t defend themselves even if they wanted to. That’ll sure put the gangs out of business!
Law abiding foreigners want to immigrate to the U.S. for a better life? Make ‘em wait! We have to let in millions of law-breaking “undocumented workers” instead. They make better citizens. Not.
And on and on and on.
Exactly right !!
The fable of the grasshopper and the ant doesn’t belong in fiction, but like “Animal farm” or “Watership down” or “Fox Mykyta” we see human traits exhibited
in animals.
Will hits the ball out of the park with this analysis.
My wife and I live within our means and avoid credit card accumulating balances. We have a mortgage. We have no other long term debt. We and millions of other responsible adults are now being ordered to bailout the irresponsible, by elitist liberal progressives like Barney Frank, Nancy Pelosi, Harry Reid, Henry Waxman etc, whose salaries we pay. Meanwhile these elitists hector us for adhering to and espousing our traditional values and beliefs, the same beliefs and values that kept us from financial difficulty in the first place.
Yet still they profess not to have a clue why there are hundreds of thousands of us attending TEA parties and millions of us preparing the ground for a massive political correction November 2, 2010.
Keep living in your utopian fantasy world progressives, like antelopes with your heads down on the African veld you won’t know you’ve been taken down until your political hooves are off the ground. The prosperous, law abiding majority are about to reassert control over the future of the country. You might want to prepare your resumes.
My wife and I live within our means and avoid credit card accumulating balances. We have a mortgage. We have no other long term debt.
What does “living within our means” mean? I’ve heard others say the same thing, and it sounds vague. I imagine you’re trying to say that you pay cash for everything? I’ve been thinking that this seems like a overly-restrictive way of looking at it. Depending on how one interprets this, even making house payments is living beyond one’s means.
That said, I’m unconvinced that the problem is the house buyers so much as the lenders getting people into bubble priced housing and selling off the loan via the magic of ratings. Millions of buyers are upside down on their mortgages and yet are paying them. They are responsible and living within their means. This doesn’t jibe with the picture of greedy consumers, but it *is* consistent with normal people who happened to buy in the midst of a bubble. (Were there idiot buyers? Of course. But were they typical as asserted? No.)
Mr Collier — It’s easy to blame the buyers, and everyone does it. I think the ratings agencies are more culpable and would make a better article.
The idea of “living within one’s means” is quite simple. It means you consistently spend less than you bring home in your pay. Sure, you might have an occassional expense (say an emergency car repair) that pushes you over your income for a given month but you make up for it.
Anyone who spends less than they earn is extremely likely to get into financial trouble regardless of income. Everyone who consistently spends more than they earn is guaranted to get into trouble eventually. A family that brings home $30,000 a year and spends $29,000 is more secure financially than someone who brings home $250,000 and spends more.
As for a mortgage, few people can afford to pay cash for a home so almost everyone who buys a home has to get a mortgage. “Living within one’s means” implies that you don’t buy more home than you can afford. Just because some lender or real estate agent tries to convince you that your mortgage can be 40% of your gross pay (an absurdly high level), it doesn’t mean you have to buy the most expensive home you qualify for. That’s just sitting you up for failure and foreclosure should anything unfortunate happen like losing a job or getting sick. Also, don’t treat your home like an ATM or even an investment. Instead, treat it as a place to live.
Try reading The Millionaire Next Door. It’s a book from the 1990s but the basic advice is still relevant.
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” — Mr. Micawber, David Copperfield
In my last home I lived in for 20 years – across the street from a couple who refied their home at least 5 times – each time taking out the max possible loan – and used it to pay off their toys. A new motor home – new car – new boat – new quad runners – etc. While I plodded along paying my antiquated mortgage on time and never refied. I ‘got by’ with a used motor home – a 1969 24′ Pace Arrow – used quad runners – no boat – and used cars.
I’ve since retired and sold my home for much more than I paid for it – pocketing enough cash to pay outright for my current home – and had enough left over to buy a few toys to boot. Good things come to him who waits.
They are bound up deep in debt living in a house they are upside down on. The toys have all gotten old as toys do – they still have the motor home but have no time to enjoy it. They are old enough to retire but have negative equity in their home and are forced to continue working. While they’ve thought about just walking out on the mortgage they hate the idea of taking such a hit on their credit rating should they do so.
Every time I visit them they comment on how smart I was – and wish they’d done the same.
How about this: Pay off your credit card balance each and every month; no carry over. Pay all your bills on time each and every cycle. Fixed rate mortgage only and overpay on monthly payments. (We had a fixed rate 15 year mortgage that was paid for in less than 5 years.) If you buy a car, pay in full, pay in cash, no auto loan: Save for that new car, which means keep every new car you buy for at 100K miles. Accumulate half to 1 year of current annual income in cash/cd’s as an emergency fund. And one more thing: Save. Save. Save.
We’ve done this and have a relative freedom that too many don’t. It’s not as difficult as some would have you believe.
#11 samizdat — You can lay blame or make all the excuses you want. What angers me is a political culture that expects me to bail everyone who was irresponsible out.
I find it interesting to think I’m making excuses. As far as I know the ratings mechanisms were complicit as were real estate values being artifically fudged upwards and a slew of other factors making up a perfect storm. The “irresponsible buyers” claim that gets repeated seems to be more low hanging fruit than reality because it fits on a bumper sticker. And this is certainly more true on a far right blog than anywhere else since it all falls squarely within the culture war paradigm so beloved here. It’s EASY to blame the irresponsible, the morally deficient, the stupid, the vampires waiting for a handout, and so on.
In my view though you can’t blame an entire financial crapstorm on the relatively few idiots buying more house than they can afford. The “capitalists” (bankers, etc) were just as guilty, if not moreso. Do the morally bereft idiots out there deserve some of the blame? Why, of course they do. But they’re not even the biggest part of the story, much less THE story.
S.Clark — How about this: Pay off your credit card balance each and every month; no carry over. Pay all your bills on time each and every cycle. [etc.]
OK, thanks… it’s largely what I expected — the self denial thing. I’ve never subscribed to that stuff.
> In my view though you can’t blame an entire financial crapstorm on the relatively few idiots buying more house than they can afford.
“Relatively few”?
Folks who are behind on their payments bought more than they could afford. Those folks aren’t “relatively few”, they’re reasonably common. And they think that they should be bailed out by folks who didn’t buy what they couldn’t afford.
That’s wrong. They should lose those houses so they can be bought by folks who can afford them.
If you want to claim that something is a major problem, it helps for you to have some hard numbers. Out of N million homeowners, how many of these were subject to foreclosure because they bought e.g. a $500k house on a $40k income? Unless the percentage is significant, it’s “relatively few.”
You’ve never subscribed to “that stuff” [i.e., self-denial]. That’s certainly your prerogative.
But then you — and all the others who have never subscribed to “that stuff” — can goddam well live with the consequences of buying stuff you can’t afford because doing otherwise would be self-denial.
Damn straight!
In addition to anger over bailing out people for their own irresponsibile decisions, I see anger over bailouts going to the politically connected. Those of us who’ve lived our lives playing by the rules, living within our means, and paying off all our debt are effectively chumps. No one likes feeling like a chump. Those who make us feel like a chump will likely pay a price come November.
At the risk of sounding “insensitive” I believe we can trace this, like so much else, to our present-day “victim culture” which, in turn, has it’s roots in the Civil Rights Movement. The civil right movement came into being to deal with genuine oppression and real grievances. Blacks created the tactics and strategies that have, at their center, a continuing template wherein the oppressed victim is starkly contrasted to his oppressor. So far so good when you are dealing with Bull Connor more than half-a-century ago. Unfortunately it is absolutely true that the only law that is always in effect is the Law of Unintended Consequences. Successive waves of different groups have used the victim/victimizer template to advance their agenda. Some have been justified and others not so much.
Finally the coin of “victimhood” has become so debased that it is the default mode for anyone who wants something out of someone else. Are home buyers who took out sub-prime loans knowning there was a balloon after six or seven years really “victims” of the banks? What if I use my home equity to buy a boat, snowmobile, Bahamas vacation and motorcycle? Am I a “victim” of the lending institutions if I can’t make the payments or suffer job loss? Am I a “victim” if I put my money in a stock brokerage and my investments tank? This administration and this Congress would have you believe that you are and that either the “victimizer” or the government must make you “whole.” For that matter am I really a “victim” of something or other if I don’t have health insurance? What began as a noble effort to stop injustice seventy years ago has now metastisized into a government-backed assault on the primal concept of personal responsibility. Can such a society survive? We shall see.
I’m still smarting from all this crap.
Before the “crash and bailout” we had stocks that paid our retirement of high 5 figures yearly….now…we get LOWLOwloW 4 figures….yearly!!… We worked hard, saved, and had it all ripped away by dishonesty of wall street and our government.
I don’t want to “give” anyone one stinking penny. Let them die. Merchants of crap and dishonesty.
I don’t know exactly what you are refering to when you state that your stocks were paying your retirement.
Are you refering to dividends? If so, why do you consider it unusual that in the middle of a very severe recession, dividend payments have gone way down? How is that the fault of “wall street”?
Are you refering to the gradual sale of stock as well? If so, stock prices are down, so naturally when sold, they won’t bring in as much. How is that the fault of “wall street”?
We have as many shares of stocks as ever…our dividends are what is in question. These are bank stocks, a major bank that was part of the bail out. we were living on the dividends from these stocks. Now we have almost no dividends…our quarterly check is not enough to live on ..
We have as many shares of stocks as ever…our dividends are what is in question. These are bank stocks, a major bank that was part of the bail out. we were living on the dividends from these stocks. Now we have almost no dividends…our quarterly check is not enough to live on ..
How is this drop in dividends, the fault of “wall street”? Every company that I know is hurting right now. Profits are down all across the country. When profits go down, so do dividends.
Let’s not forget that it was a completely bi-partisan decision to bail out AIG et, al. Of course there will be fall-out, because now that the economy has not fallen into complete collapse, many can say, you know, we shouldn’t have done that. At the time, damned few of any political group were willing to take that risk.
Not to worry; rest assured that hundreds of thousands of people HAVE lost their houses and local and state governments ARE cutting back a lot. If a certain number of people are able to save their house with a little help, that will be a good thing for all of us, right? I am willing to be convinced that there are hundreds of thousands of people out there who are going to be able to hold onto a house, that by all rights they should lose. Where would these people be?
I couldn’t agree more with the personal philosophy of spend less than you make; that is exactly what I have done my whole life, BUT the whole idea of borrowing in order to make more money is the way business is done. People evidently, confused business which has a plan to create income with their own finances and, of course, wanted nice stuff. I can’t tell you how many righty threads I have been bashed on in the past when I said that we should consume less. According to them, spending things for nice stuff was the American way. Can’t there be some meeting of the minds of those of us in the middle about true conservation, even if it inconveniences us a little?
Enjoying the good life, material gods, nice cars, you name it, is even more a righty thing than a lefty thing (there is some bipartisan agreement on this one). When greens talk about getting by with less, avoiding gas guzzlers,using less water etc., they are not exactly embraced, but rather mocked. I will accept a higher tax on gasoline etc because it will slow consumption,, and if it hurts my standard of living a smidgeon; so what? But a lot of you righties claim not to be able to spare a damned nickel because of the principle of the thing, and you won’t stand for consuming less because of the priniciple of the thing…or is there some other reason?
There’s a difference between consuming less, and living within your means, as your last paragraph demonstrates.
There is nothing wrong with enjoying the good life, so long as you are going into hock to pay for it. You and the greenies are against anyone enjoying the good life, and that is why you get bashed. And rightly so.
Hey, if you want to embrace the culture of waste, join the majority of your fellow citizens. I will stick with used cars, hunting, gardening, and consuming little and recycling as much as I can.
“The good life within one’s means” is only half a click or an economic down turn from the good life beyond one’s means. I think that I have the good life, I just don’t need a lot of new stuff, pricey furniture, other people landscaping my yard, trips to Las Vegas, yada yada to have the good life. A majority of Americans of all political persuasions chase the good life via material stuff. Notice how happy they are.
I love the way liberals set themselves up as the standard of morality.
So in your worthless opinion, anyone who consumes more than you do is being wastefull?
Correction: “…so long as you are not going into hock to pay for it…”
what he said
“not going into hock” and don’t forget common sense and a little planning. Relatives of mine apparently didn’t plan when they bought property to build a new home. It was only after buying the land did they realize they couldn’t afford to build the house. They didn’t seem to know that the housing market was lousy and probably wouldn’t be able to sell their current house to finance the new one. Obviously they didn’t know that in real estate, the smart sell first, then buy. Now they want to move to another state but can’t because of the banking crisis that further hinders their effots to unload their house and the land they bought. Oh, yeah, did I mention said relatives are liberals? I have to give them some credit though, they realized their mistake and didn’t compound it by moving forward with building the new house.
Did they make these mistakes because they are libs or because they were just babes in the woods of real estate? Like many of all political persuasions in this type of mess, I suspect they were jsut babes. However, that is no excuse. Learning about the different types of mortgages, loans and what is going on in the market takes work but it’s not that hard. Reading the terms of your mortgage isn’t that hard either. I bought a house in 2007. I’m still in it and while it isn’t steak every night for dinner, it ain’t ramen noodles either.
G.L.Alston above,
Larry J did a good job of addressing the definition of living within ones means. I trust you have looked at some of the other comments that have identified the speculation that went on, the constant drain off of equity that refinances permited during the go go relaxed rule period.
My wife and I didn’t fall for any of that. We saw the storm coming and put money away. We stopped purchasing everything but necessities in August of 2008 and only recently relaxed the purse strings a little. We are in position to weather a job loss and can still pay for our house etc for an extended term. The ability to do that comes from a concept our parents understood well,
delayed gratification. I have little sympathy for those who have no concept of a rainy day or no understanding of the cyclical nature of capitalism.
You can lay blame or make all the excuses you want. What angers me is a political culture that expects me to bail everyone who was irresponsible out.I never mind helping the less fortunate, I detest being ordered to assist the stupid.
If your friend Lien Shory is an Obama voter and confirmed liberal…he deserves every bad and rotten thing he gets.
He asked for it. If he didn’t know what Obama is, and the monstrous and malicious thing liberalism is, then he should have.
I truly hope that the people who suffer the moist under Obama and the Dems are Obama voters and liberals. More than any creatures on the planet these days, they have merited any rotten things in the economic realm that happens to them – even if they did the right thing like Shory!
Why? Because they did the one most wrong and despicable thing – voted for Obama who causes suffering for everyone!
Indeed – how is it that so many of us knew exactly what Obama stood for, knew exactly the kind of socialistic policies he was going to implement, could see this bs coming from miles away, and all these allegedly intelligent liberals/RINOs had no idea?
Many were blinded by hate. Others were brainwashed. That’s the only way to put it. The brainwashing was a 24/7/365 for 8 solid years against “Bush” and all things Republican. The job was done so well that tens of millions of people simply took it as received wsidom that a good man (Bush) was a bad and evil and stupid man and that voting for Obama – full of hope and intelligence! – was the way to correct the evils of Bush.
The Nazi propaganda machine would have been in awe of the effort. Tass and Pravda would have tipped their hats.
The great shame of America is that 66m people voted for Obama. The great shame of America is that people voted for Democrats to run Congress – after decades of evidence of the destruction and ruin they always bring with them.
There were a lot of people, especially young people, who thought this was the chance to finally, once and for all, end the image of racism that still hung on from the 50s and before. They listened to Obama and thought he was telling the truth. That is why he got such a big proportion of the younger voters. They hadn’t seen this movie before. Us oldsters had seen it already and knew the guy was bad news. Now another generation knows a bit more about human nature. The sad part is that he will wreck the image of a black politician for a long time.
This is not confined to the housing market. GM designs mediocre cars, the UAW slaps them together with the care and attention to detail of the average meth addict, turning out cars so horrid they can only sell them by discounting them to the point that the profit margin is 48 cents per unit–and the damned things self-destruct the minute they’re out of warranty. They do this for forty-plus years. In the meantime, Honda builds the best small-displacement engines in human history, and assembles them with loving devotion, using honest American workers, into cars that are just getting broken in at 100,000 miles. Ford–”Found On Road Dead”–which used to be as bad as GM, cleans up its act and starts building products that don’t fall apart and people actually want. So GM finally burns through its residual customer goodwill from the glory days, and suddenly it’s supposed to get help. GM gets to erase its bond debt and kill its shareholder equity, all financed by tax money extracted from Ford and Honda and others who succeeded by doing the right thing.
The financial system has been salvaged from the crash of 2007/08 and with the passage of the financial services reform and the recession now fading we should soon get out of the deep woods (in the next year or so). I do not believe there will be any more bailouts (scrappage programs and tax cuts will continue) so the issue will disappear as Americans do have short memories, especially as they return to solvency. Will the lessons of the 2001 to 2006 be learnt? I do not think so.
“I do not believe there will be any more bailouts…”
And yet Obama’s asking for authority to do more, without Congressional oversight.
If you don’t believe there are going to be anymore bailouts, then you haven’t been paying attention. Just check out Obama’s new banking regulation bill. It’s one giant bailout bill. They just won’t have to go to congress for each bailout. They’re setting up a permanent slush fund for that purpose.
Over the past several years, I have seen countless stories about people “losing their homes” due to mortgage issues. Every one is the same:
Jack and Jill bought their home for $100,000 ten years ago.
Jack and Jill now owe $500,000 on their home.
“…most of the money was used to pay off other creditors”
There are usually 500 to 1500 additional words designed to make me feel sorry for Jack and Jill. Instead, I always say, “WTF? Are these people nuts? What is wrong with these jackasses!”
Dwight at 10 above,
I had to laugh at your equivocating post, it exhibits a convenient memory.
If you borrow beyond your means to pay when the inevitable rainy day appears, your financially not very bright.
Further, please cut it out with the attempt to paint materialism as the exclusive domaine of the republicans. You definitely don’t want me to start laundry listing all of the limousine liberals, artists, actors, Wall street types, rich environmentalists ( Al Gore and dozens of others come to mind) and politicians who own all sorts of material things I can only dream of (Charlie Rangel,Chris Dodd, Nancy Pelosi, etc etc etc ). I know dozens of liberal friends who own more than me, drive better cars, wear more swank clothing and have nice vacation homes.
When you scratch the surface of your thesis, it falls apart right quick.
What makes things work is a concept called responsibility; transfering blame is an opposite concept.
Frankly, conspicuous environmentalism is a form of status-seeking via consumption. There’s no real difference between “organic” and standard produce, except that the former requires more labor to produce, doesn’t ship as well, and is thus more expensive. There is no real difference between a “factory farmed” chicken and a “free range” chicken except, again, it costs more for the “free range” bird. So the environmentalist gets to put on their over-priced hair shirt and show everyone how virtuous they are…
Organic also requires a lot more land to farm. Which means more forests cut down to make way for farmland.
Rob and Mark,
Right on, your exactly correct. There is so much fantasy involved in the environmental/organic mindset it is laughable.
By the way, I compost, drive a VW tdi, have my own garden, and heat my house with wood pellets. I do this because the compost feeds my garden, the car will be running when the next fuel crisis hits because I can get about 570 miles to a 14 gallon tank, I like fresh vegetables and save money growing them and when the next oil crisis hits pellets heat the house for cheap.
By the way, the next petroleum crisis is inevitable because our government chooses to prevent extraction due to environmental concerns, the horses behinds. They are going to get a serious wake up call in about 6 months.
Your friend Lein Shory who has the blog post about how Tea Partiers want sick children to die? He does deserve every bad and rotten thing he gets. Why are you friends with a hateful bastard like that?
You said it.
Our problem is not, ultimately, Obama and the Dems. They are a natural disaster that will do the damage they’ll do.
Our BIG problem is the Lein SHory’s of the world. They are the total “blanks” who give us “Obamas” and “Pelosis”. They are the people who buy all the lies, and feel themselves superior and wise. The Lein Shory’s of the world are, in short, some of the worst sorts of people their are if we look at the results they allow to happen.
Then when they come back and complain about it…very hard to stomach.
But, but, but…Lein’s intentions are good. He cares! It’s just the results that suck.
You’re closer to the problem than most.
We don’t fight Obama and the Obama admin. We don’t fight the dems.
We also don’t fight Lein Shory’s of the nation either, though your assertion is more correct than most.
We fight an idea. The idea that government is or should be all powerful to help all those in need regardless of the nature or source of the disaster. The idea that when you’re hurting that government is there to step in and save the day. The idea that Rich Uncle Sam has the cure to all our ills.
There is only one way to fight an idea… and that’s with another idea.
The idea that government is the problem, not the solution. The idea that we must be responsible for ourselves and our own well being (without going so far as to say we won’t help others in need). The idea that we as Americans can fix our own problems better than any government bureaucrat or diktat ever could. The idea that everything the government touches turns to sh*t.
I could go on, but you get my point I hope.
Heard another soundbite on the radio today where Obama was addressing his Wall Street takeover by saying that we need to stop people from taking risks with their money. No no no no no! Taking a risk with your money is part and parcel of being an entrepreneur! You know, those evil people who create jobs?!
“The country’s in the very best of hands.”
# Dwrong say: “I am willing to be convinced that there are hundreds of thousands of people out there who are going to be able to hold onto a house, that by all rights they should lose. Where would these people be?
They’d be in a rental apartment where they belong, Dwrong…just where I was when I couldn’t afford to buy a house or flip a condo.
#14 Poor Folk
“I do not believe there will be any more bailouts (scrappage programs and tax cuts will continue) so the issue will disappear as Americans do have short memories, especially as they return to solvency. Will the lessons of the 2001 to 2006 be learnt? I do not think so.”
You think that do you? That is what is called in Progressivethink “wishful thinking devoutly to be wished”. Or call it Wish and Change if you desire. But do keep this in mind, Repubs and Indies are gonna tear most of the unfortunate Dems running for Congress a new one in the polling places this Fall. They won’t forget what happen with the forcing through of the sick care insurance company and drug company enrichment bill this very spring. The majority of Americans don’t like the bill at all nor the underhanded way it was passed.
Incidentally, PC, I’m not a big Obama fan, but I do give him credit for continuing the Bush/Afghan war with robust (gee, that word kind of died a quick death, didn’t it) gusto in order that we have a good chance not to suffer further massive bombings. It is also good to keep fighting them away from here so we don’t have to do it on your street. Don’t you think?
I did not say that materialism was the exclusive domain of conservatives; I said, “Enjoying the good life, material gods, nice cars, you name it, is even more a righty thing than a lefty thing (there is some bipartisan agreement on this one).” The “bipartisan agreement” meant that they both are materialistic, not that they both agree that righties are more materialist. OK, unclear writing.
And for Fred Beloit; the point was DO THESE PEOPLE EXIST? Subtlety appears to be lost upon you. Who are all these people whose houses are being saved?
And my favorite from Markthegreat: “I love the way liberals set themselves up as the standard of morality.” And conservatives don’t? I, sir, have a morality much deeper than that of the consevative or the liberal; it is the morality of the bifurcated brain.
Most conservatives aren’t interested in using the govt to forceeveryone else to live up to their standards.
As to declaring themselves the measure of all things moral, yes liberals have a near virtual lock on that vice. All you have to do is listen to them. For that matter, just listen to yourself, if you can bear to.
I’m wondering….did you vote for Obama? You sound like the sort of person who would have.
And as I’ve said above, our really big problem is not “Obama”. The single greatest problematic issue in America today, the one we truly may not recover form, is the people who voted for Obama.
Those people; the existence of soooo many of them; is the most ominous sign of decline and corruption of a people in the entirelty of American history.
There is not a close second. Period.
And as I’ve said above, our really big problem is not “Obama”. The single greatest problematic issue in America today, the one we truly may not recover form, is the people who voted for Obama.
This is a mirror of the left’s “sheeple” argument, variant #45.
Woe be unto us. If only those ignorant fools were smarter.
This is the best you can do?
That’s the best I can do. It’s very close to the heart of the matter. Your assertion, that voters are not responsible, is the problem.
You are not responsible. And you are saying no one else is either. That’s what I said the major, huge problem is – people like you. I have no idea how we recover from that problem.
My bet is that there is going to be one hell of a correction come November. A lot of “sheeple” (your term , not mine) have discovered that the media and Obama sold them a bill of garbage in the fall of 2008 and they are smoking angry now. I have a close friend whose then 17 year old son campaigned for Obama and was a supplicant. I saw him about two months ago at a dinner. He pronounced Obama a liar and said he would never support the man ever again. He is one of millions.
There is a political earthquake that will hit us on November 2nd, it is going to represent one of the biggest political corrections in the history of this country. The Democrats have left a treasure trove of comments that are going to come back and haunt them. “We have to vote for the bill to find out what’s in it” and “There aren’t any rules, we make em up as we go along” are two that come to mind.
You liberals are going to find out just what isolation and rejection feel like. Please, please ram through an immigration bill. Please make cap and tax law. You will lose the senate and the house for certain.
Mike M — Your assertion, that voters are not responsible, is the problem.
I made no assertion. I poked fun at your argument. And now I get to poke fun at your reading comprehension.
Samizdat — There is a political earthquake that will hit us on November 2nd, it is going to represent one of the biggest political corrections in the history of this country.
The party in charge is always voted out if the economy is off. Predicting a democrat loss isn’t Nostradamus level prognostication.
An implicit assertion is still an assertion. The logical consequences of your not at all humorous or clever pretensions still follow. You’re just not big enough to state them like a grown up.
I repeat: People like you are exactly, 100%, precisely the major problem America is facing right now. It’s people like you who voted for Obama, which was nothing more than a peer=pressure ego-massage act of total irresponsibility. We could recover from Obama. Maybe. We’ll never recover unless a huge number of the “yous” of the world grow up fast and take your adult responsibilities seriously.
The basic problem is that we have the mindset that we should privatize profit and socialize failure. Well, when you do that, there is no amount of regulation that can prevent risky behavior. It would be like me giving you money to pay Texas Hold ‘Em and telling you that I will cover your gambling debts. If I’m that stupid I shouldn’t be surprised to find you trying to draw to inside straights hand after hand.
The whole house of cards was predicated on the assumption that the government was going to step in and fix things when they went South. Until that mindset is completely and utterly destroyed, we’ll see a repeat of this problem – and worse – in the future.
One reason Texas has fewer foreclosures relative to the rest of the country is that the 1876 constitution – replacing the 1869 carpet bagger constitution – prohibited home loans except for purchase money, home improvements, and the removal of tax liens. This prevented home owners from using their home as a cash cow. Unfortunately, due to the influx of Yankees and pressure from banks the constitution was amended a few years ago to allow home equity loans but still with far more restrictions than are found in other states.
I too know Obama voters and confirmed liberals who find the notion of bailing out the reckless and stupid a bad idea. And why not? Conservatives don’t have a monopoly on common sense and fiscal responsibility — as individuals. But herein lies an opening for conservatives and libertarians: remind liberals that the people they vote for are profligate and fiscally insane, and remind them often.
…that’s my friend Lein Shory, who among other things is an Obama voter and confirmed liberal.
It seems liberals will have lucid moments, infrequent as they are…
It’s a good article and thread, but it’s my sincere hope that gratuitous alliteration in titles gets a well deserved rest!
“What does “living within our means” mean?”
If you have to ask, then your parents and the education system have let you down. Or you weren’t paying attention during those lectures.
If you have to ask, then your parents and the education system have let you down.
“Living within your means” has various meanings depending whom you ask. Some see this as the ability to pay the bills each month, others see this as never acquiring bills. I asked because I was curious which definition was being used so as to gauge the poster’s other statements.
And *I* was let down. Yes, I suppose so.
Your parsing is quite lawyerly. Common sense defines what living within ones means is. It can be summed up by words like “prudence”, “caution”, “responsibility”, “foresight”, “frugal”, and, once again, the concept of delayed gratification. It ain’t rocket science. There is no double meaning.
Thank you Samizdat. Those are all components of living within your means. I was introduced to budgeting in high school and my parents taught me the value if a dollar. I still made some mistakes when I got out on my own but I look at that as the final lesson. Next came teaching my new wife what it meant to ‘live within our means’ and after that we passed the lessons on to our children. We’re on the brink of retiring now and will collect modest company pensions, have some savings, minor investments, a retirement property in the country and NO DEBTS. Neither my wife nor I are highly educated or have what you would consider high-paying jobs. We just lived within our means.
Your friend, the liberal, is not a very deep thinker. What does he think the on-the-ground reality of liberalism is? Free money from the tooth fairy for the downtrodden?
If you believe that society/government should provide an economic floor, a level of existence that no one should fall below, then you believe that:
The savers owe the spendthrifts
The hard working owe the lazy
The honest owe the scammers
The sober owe the drunks
The straight owe the junkies
The prudent owe the impulsive
The engaged owe the dropouts
The energetic owe the indolent
Don’t bother objecting. Don’t claim you believe no such thing. These are the real world effects of every welfare state ever invented. Every behavior leading to prosperity is undermined, every behavior leading to dissipation is subsidized.
The world of the welfare state is a paradise for the conman and the freeloader, and turns the honest man into a sucker. Every time it’s tried… every where it’s tried.
.
You are right in what you write.
I know what obama is trying to do to America has NEVER worked anywhere else.
It will only destroy our way of life. If you are one of the free loaders, beware, when the rest of us have no taxes to give you, you will be worse off than you can even imagine.
I also think that the backlash is yet to come on full force.
“I also think that the backlash is yet to come on full force.”
I certainly hope you are right. This Collier column, I think, was mis-titled. I think he misread the real backlash. It’s not a “Bailout Backlash”. It’s a backlash against the people who voted for Obama, and Pelosi and Reid. It’s a backlash against the societal takers and whiners and organized thugs from uniions to government employees to the entire MSM.
Good and decent people, the people who built this great country and made it the greatest thing ever, have been taking it for way too long. We have allowed things to slide for way too long. It is getting very close to the “we’ve had enough” point.
I, for example, have “had enough” watching my tax dollars get sucked into the sewers we call cities and which are really liberal plantations where they waste money to buy votes – in the “hood” and in the “skyscraper”. It’s the same process.
God willing the Tea Party Movement is the beginning of the 2nd American Revolution. Let’s give the hard-working illegals citizenship, and deport the liberals. The country improves 1000% over night.
Amen, you said it so very well.
the most that we can accomplish at this point is to stop the bleeding…
Easy, when we’re bled dry, the bleeding will stop.
Here’s a hypothetical: Suppose you have a huge mortgage but you inherit enough money to pay it off. Under normal circumstances, a prudent person would do so. But knowing that the value of your house is less than that of the mortgage, and that its value might not recover for years, would you be stupid to pay it off? Your neighbors might walk away from their expensive houses and let the bank eat it. Are you going to be the sucker? This is one of the biggest problems that bailouts have brought us: moral hazard.
And how did the bailouts do this? The bottom has fallen out of the housing market and the bailouts were a response, supposedly, to keep the nation’s, and possibly the world’s economy/credit from freezing up. Other also countries bailed out their big banks. Some of these institutions are now doing well enough to pay back the money, so apparently we succeeded in that we avoided falling into the black hole. You describe a person with a decision to make about his/her own finances and investments. Once one reneges on their mortgage, their credit rating, certainly when it applies to a new mortgage is shot and any purchase must be done through a shadow buyer, which is another risk to be factored in. I can’t see how NOT bailing out first Bear-Stearns, then AIG, and then the other big banks would have changed this scenario in a positive way, unless you think that one can now renege and not ANY feel moral obligation to the bank, since the government will bail them out.
The problem facing a number of conservatives seems to be that some of their time-honored traditional principles regarding, for one thing, paying off one’s debts, are taking a beating in the somewhat free market. What do most humans do in such situations? Hmmm, adjust their principles to survive or prosper, and, oh yes, curse Obama, that is obligatory. Libs face different problems as their ideas about financing the nanny state have fallen on similar hard times. When the bubble bursts, only the people who shorted
housing loans) are smiling. I wonder if Obama, or some liberal came up with the financial wrinkle of going short? Or did our tried and true free market evolve such a thing? Doesn’t matter, blame Obama and everyone who voted for him.
Dwight, the bailouts teach institutions and people that there is the potential for future bailouts. They adjust their behavior to assume more risk, knowing that they won’t bear the full consequences. I don’t know what the short-term consequences would have been for the world’s economy, but I lean towards the longer-term goal of people and organizations being held accountable for their own actions. In the end, accountability bears better fruit. As for your comments about cursing Obama, the bailouts started under Bush (who was roundly cursed by the left at the time).
A person who has inherited a large sum of money doesn’t need a credit rating to buy a house–he doesn’t need to borrow. The problem is now that the system has shown that it will reward deadbeats. An unscrupulous person who has inherited money would be wise to walk away from his large mortgage and buy a deeply discounted house, paying in cash. In 7 years, his credit will be clean and his paid-off home will likely have appreciated in value.
Willy, from my point of view, I’d want to pay the house off once I can do so, because I care more about what I think of myself than what other folks think of me. That said, it took me about 25 years after adolescence to get to this point of view.
Agreed, MiddleAgedMax. But you and I have to accept the fact that we’ll end up a few hundred thousand short of the guy who has no self-respect. The system rewards that other guy.
“That’s no slavering right-wing tea partier talking; that’s my friend Lein Shory, who among other things is an Obama voter and confirmed liberal.”
Tell your friend from me, “Welcome to the party, pal.”
The Dodd Crony Capitalism Bill will reveal who is who in Congress. Those who cooperate with the National Socialists need to be voted out. When Rick Santelli called for Tea Parties it was bailouts he was yelling about. We’ll find out who gets it and who doesn’t.
Message from the Democratic Party:
Hey, you only bought enough house that you could afford, instead of too much?
Suckers.
You saved instead of borrowing?
Suckers.
You voted to help the poor? meaning the lazy, careless, and irresponsible?
… of course not ALL the poor are lazy and careless and irresponsible!
(but no gov’t program can ever tell the difference).
How nice you are, Suckers.
You voted for HopenChange?
ha ha ha, Suckers.