Friday, April 23, 2010

You Get What You Subsidize

Will Collier:

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.

A variation on the same question can be asked regarding the massive 2009 “stimulus” package, most of which has been routed to propping up profligate state and local governments: why isn’t the so-called public sector cutting back along with the rest of the country? Almost all of the job losses since the late-2008 crash have been in the private sector. States and localities are literally going broke because of irresponsible promises politicians made to government employees. Why should their financial status be any different from, say, construction workers whose jobs dried up in the real estate collapse?

The Obama administration’s 2009 takeover of General Motors and Chrysler, largely to the benefit of the United Auto Workers, was spectacularly unpopular among the electorate at large, despite being billed as an effort to stave off even more unemployment. But what was that buyout if not a transfer of money from the productive businesses and individuals in the country to a union and two companies that had just plain failed to find enough customers? No one in Washington had a good answer for why a pizza store owner in Denver ought to have to pay for cars he didn’t want to buy from Detroit. Heck, even a UAW member at Ford is probably wondering just why his taxes are going to support his competition.

The more you look at the economic situation, the more you see the pattern. Take the banking crisis: irresponsible banks loaned money to irresponsible people, backed by an irresponsible government that’s trying to make up for the whole thing by borrowing and spending more and more money … irresponsibly.

And everybody who didn’t do stupid things with their house or credit or business? We’re being asked — no, that’s not right, we’re being ordered — again and again and again to pay for the bad decisions of the people who did.

1 comment:

Anonymous said...

In the course of all the noise and fury about the evil bank, no one is mentioning evil community organizers, Congress and the Community Redevelopment Act which enabled and even encouraged the liar loans.