Last night my Republican brother and Democratic husband and I watched the Vice President debate. My husband truly thought Palin would be reduced to tears, poor fool that he is. My brother and I both felt Palin would do better than she’d shown in her Couric interviews but that Biden would win the day.
It took us three hours to watch the 90 minute debate. We kept pausing (I love you, TiVo) and commenting. And rewinding (oh, yeah, she called him Obiden).
In the end, the three of us agreed on virtually every issue, the causes and even the solutions. My brother and I simply disagree about which ticket is likely to accomplish those solutions. My brother is concerned Obama will infuse too much government into our already money-strapped, incompetently-run government. I feel McCain will keep his focus on Iraq and not the home front.
But the debate.
There’s one theme that is arising as a result of the crashing economy, and frankly, the positions of both sides piss me off.
Here’s what Palin said last night:
We need to make sure that we demand from the federal government strict oversight of those entities in charge of our investments and our savings and we need also to not get ourselves in debt. Let’s do what our parents told us before we probably even got that first credit card. Don’t live outside of our means. We need to make sure that as individuals we’re taking personal responsibility through all of this.
At this point, I was silently applauding her. Good! Place blame squarely where it deserves to be. Let’s admit that we Americans bit off more than we can chew. But then Palin continued:
It’s not the American peoples’ fault that the economy is hurting like it is, but we have an opportunity to learn a heck of a lot of good lessons through this and say never again will we be taken advantage of.
What? Yes, to a not small degree, it IS the American peoples’ fault the economy is hurting. It’s their fault to the extent they got into houses they could ill afford. Yes, the banks are at fault too. But if we are going to start taking “personal responsibility” and stop “living outside our means,” then we need to accept that we, in part, put ourselves in this boat of economic crisis by living beyond our means.
My ire isn’t just with Palin. On a similar topic, here’s what Biden said:
What we should be doing now — and Barack Obama and I support it — we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you’re paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe, the principal that you owe. That would keep people in their homes, actually help banks by keeping it from going under.
What? Bankruptcy courts should be reducing the principal owed on a home to keep the debtor in the home? And to help the bank/creditor from suffering? Um, not so fast, Joe. Ain’t nobody offering ME—a person who IS living within my means and NOT making bad financial decisions—a reduction on the principal owed on my home. Why would or should we (at our expense) award these debtors and creditors who are SOLELY RESPONSIBLE for the mess they are in?
Now, maybe Biden meant tack on another 10 years to the debtor’s mortgage to reduce the principal payment. But I suspect that is NOT what he meant.
My point is, it seems both tickets are clamoring to help these shaky homeowners and the banks that got them into these homes. I don’t mean to sound elitist or harsh, but I have no problem, NONE, with these debtors losing homes they bought at arms-length fair market values. People lose homes all the time. They don’t become homeless; they become renters. I rented for years because I couldn’t afford to buy a house. My parents didn’t help me get into my home; the government didn’t help; my neighbors didn’t help. I bought a home only after I could afford to do so.
Owning a home in America isn’t a right. It’s a privilege. A privilege that comes as a result of saving money and paying a note. I resent that our government—again, both sides are for this Bailout and mainly they state their reason for supporting it is because it keeps families in their homes and banks from failing—is stepping in to help mainly the Americans that are not fiscally responsible stay in homes at the cost of those of us who are fiscally responsible.
It really makes me want to miss a payment on my house note.
Stumble it!
Wow Nola, you sound like a libertarian with all that personal responsibility talk. You’re getting me excited
Actually, I read up on some focus group data after the debate and Palin’s line spiked off the chart, across party lines, when she did that bit about the personal responsibility. Guess everyone’s is sick of paying for other people’s mistakes these days.
pistolette’s last blog post..There Can Be Only One!
Well we seem to have honed in on the exact same points on both sides there. I turned to my husband last night and said that I believed it was the first time I’ve heard personal responsibility uttered in this entire situation by anyone in any party (except Ron Paul). And then we both did the same double take when Biden talked about lowering principal in bankruptcy claims. Oh, yeah, that will help loosen up the credit crisis. Would you even THINK about loaning someone money if the bankruptcy court later would lower their principal owed?
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Problem is that it’s not so much that people bought homes they couldn’t afford, it’s that they did so without equity up front in 100% or 110% financed deals; or, refinanced and wiped out the equity they did have. For 30 years this was not a problem. Housing prices kept increasing, if they had to sell, they could, and pay off the loan. Yes, people made bad decisions buying homes with no money down. But whether that should ever have been an option in the first place is a regulatory question.
My understanding of the bankruptcy topic is this: Bankruptcy provisions like Biden discussed are called “cram downs,” and are helpful because it is difficult to put a value on a piece of paper representing the debt on a foreclosed home. No one wants to buy it. The home can’t be sold (see above) at a price to cover the debt. If taxpayers, through the bailout legislation, have to take it from the lender, they do so at a speculative price and at risk of never being able to sell that piece of paper. The cram down turns the debt from something worthless to something with a finite value. Which does actually help everyone.
I could be wrong, of course, and suggest you talk to the bankruptcy gals and guys at work.
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i agree with you near 100%. i wondered why, when my other half and i bought this house, why our mortgage agent and our realtor were both so very excited with us. we’d done our budgets before we went looking. we knew how much we could put down (not much). we knew what our maximum monthly payment could be - and we wanted to go UNDER that, not over it or just at it.
and then my other half started telling me about all of the folks at her work who were buying $200,000+ homes. and two new cars. yes, their place of employment is on mandatory overtime, but that’s not going to last forever. these are folks placing groceries on charge cards, people who gambled on variable interest rates meaning they’d only get lower and lower rather than rising.
i’ve been out of work for 14.5 months now. we can still afford our house and not put daily needs on any kind of credit cards. we’re lucky, but we were also responsible about what we could and could not afford.
i’m gonna be pissed if those folks who bought $200k houses get any kind of free pass when we’re working our butts off to earn our home. i understand where Pete is coming from with the “cram down” explanation … but i can’t help but think, gee, wonder if we should have gotten a bigger house after all ….
Okay, I admit, I fell asleep right when it was starting. I really really wanted to see it, and will probably watch it later on YouTube. But I hear that Palin did a good job.
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I’m with you. It is going to take BISMOW and myself years to save up to make a down payment on a tiny city condo (student loan bills..yowza…) and I don’t see anyone offering to help us out or give us a down payment. You also didn’t see us signing up for a mortgage that we couldn’t afford either.
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I think Biden wants to reduce the principals because so many home values were artificially inflated in the first place due to more demand created by the market just handing out loans to anyone. The drop in the stock market is due to mortgages now falling to the values they should have been in the first place. People really shouldn’t buy more house than they can afford, but I don’t think it’s fair for banks to sell these overpriced mortgages to the government for .40 on the dollar, but still make homeowners pay 1.00 on the dollar. I could be wrong but that’s my understanding of it.
Surprise, surprise. I agree with you and Pete. Not on the bankruptcy, because that would be above my pay-grade.
After the hoops we had to jump through to get a mortgage, because SoHub is self-employed, I will be damned if someone gets to stay in their big over-priced home while I continue to pay my mortgage on time. Hell, we could have afforded much more house on what SoHub was making when we decided to buy, but the thought of almost 40% of our monthly income going to a house was too much. Besides, I think we found just enough house with just enough yard for just the right price.
Hey, if the government wants to help us out why don’t they come pay down our credit card that was hiked up for Gustav. Now, that would be a bailout I would vote yes for. ;p
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I hear you on all of these issues. Part of my problem really is with the banks, though. For the last several years my mailbox has been flooded with ridiculous offers to finance 125% of my home’s value. Ridiculous! The banks have also encouraged people to treat their homes not like investments or domiciles but as credit cards - home equity lines of credit, refis, adjustable loans that counted whole chicken coops before the eggs were even out of the chute! So yes, I blame the banks, too, just as surely as I blame scam artists who prey on old people. Banks are very good at marketing. They find new ways to make large amounts of interest over short periods of time and then they use the tools and language to sell it all to the average American.
Funny how they made even the worst ideas sound so appealing! It’s criminal, really, and yet here we are, bailing out the fat cats because if those fat cats go down, a lot of innocent an ill-informed people go down with them.
D
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My brother is one of those who got a mortgage with no documentation. He didn’t give me the details, but my impression was that they did not know his annual salary, nor did he put anything down. He cannot afford the monthly note without a roommate chipping in, and currently he is without a roommate. Even working every overtime shift he is offered and taking a second job delivering pizzas, he is behind on his mortgage. To my sister and I, this was not only foreseeable, it was inevitable. We warned him at the time. But my brother and my parents were willing to put their heads in the sand. It is as if they thought “No one would give me a mortgage if they thought I couldn’t afford it. They must know better then me. If this was a bad idea, I wouldn’t be able to do it.”
Some buyers were deceitful, and some were ignorant; preyed upon by unscrupulous marketers. But they all are responsible. I would support lowering their monthly payment, and maybe even the interest rate, so they could still afford to live in the house, but not to forgiving the principle.
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