Wanted: Less Experts, More Compassionate Observers

Gawd.  I gotta tell y’all, its a little bit scary when even the supposed experts can’t get a handle on whats best for the economy.  The stimulus package had plenty to dislike, but it also moved the ball forward and i fully support it.  The housing situation is another matter…

There have been discussions all over the internet, and I find myself nodding in agreement with all sides.  By world standards, our family is incredibly wealthy.  Of course, by world standards, if you have clean water, a roof, and abundant food available 12 months a year, you are also incredibly wealthy.  So, theres that.  And i feel its important to acknowledge that, every damn day.

But I want to address a few of the talking points i see consistantly offered up during almost any discussion of the housing crisis.  Its probably true that the housing market is the engine that drives our economy.  The problem of high foreclosure rates must be addressed.  But how?

When we took out our mortgage, (on a home we built) we were quite happy with our 6.25 interest rate.  We had immediate equity, and a 30 yr note payment was proportional to our income.  We have had numerous opportunities to refinance, and we could have done so for more than our house was worth.  I even had friends suggest that borrowing at 5.65 % (our new rate) was so good, that we should borrow all the way up to our appraised value and invest the money in stocks.  In stocks!  Suffice to say, that friend is bankrupt now and we still have equity.

We are cautious people.  Part of that is our age.  We are at an age where we cannot stand much risk as there is precious little time left to earn, should we need to recover.  So, ok, what i am getting at is that we will not benefit from The Plan.  We aren’t even really affected by foreclosures in our area, as we do not live in a neighborhood and our property is unique enough to always attract a buyer.  Sure, I’d love to refinance at 3%.  I keep trying to muster up the outrage at being one of those “who did everything right”, only to see those who mismanaged and over-reached get “rewarded” by The Plan.

The truth is, I don’t care that my neighbor refied and bought a new car, a new boat, a new 112 in plasma tv and a wii. (ok, the wii thing kinda ticks me off. I want!) Every one of those purchases had a ripple effect on the economy, and people earned money providing those products.  But he can’t eat those products.  I have no problem paying taxes that go to help my neighbor out of his bind, provided the boat gets sold, the car is traded for a fuel efficient model, and that he doesn’t bitch about where his taxes go.

I’m well aware of how complicated this whole thing is.  I’ve read and read about bubbles, speculators, traders, deriviatives, credit default swaps and sub-prime predators.  I fully get that many people approached home-buying irresponsibly.  I spent a few months, last year, watching a friend go about it smartly.  I wish more were like her.  This whole mess might just force future generations to be smarter and more disciplined about their finances.  I applaud that.  But i refuse to be angry because I’m not getting a piece of the action.  I don’t need it.

I intend to be grateful about that.

7 Comments

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7 responses to “Wanted: Less Experts, More Compassionate Observers

  1. I like your insights and level-headed outlook on the mortgage bailout. People make their decisions about housing and what to spend their money on (whether borrowed or hard-earned). The amount of emotional investment that is being put into this mortgage package seems a little disproportionate to me, compared to how much has been spent on other government plans.

    If the government plan fixes the problem, fine. If not, we still have a huge problem to solve in the housing market and the economy. Emotional arguing will not help solve it.

  2. Pingback: He Ain’t Mad At Ya : Post Politics: Political News and Views in Tennessee

  3. There are a lot of people who seem pissed that they’re going to be paying for people who over-reached and in a way I can understand that emotion. But, it’s really similar to your neighbor’s house being on fire – there’s a problem next door, it’s significant enough that it could hurt you, and your tax dollars are going to mitigate what’s happening.

    Mortgage/forclosure help seems to be like that to me. I don’t need it. Others do. I know from personal experience, when we bought two years ago our mortgage broker tried to get us into an ARM or an interest only mortgage – it was a good deal, everybody was doing it, we could take the equity from the house we were selling and invest it — and it all sounded plausible. If I wasn’t an asshole I might have fallen for it. Others did.

  4. PS: If you’re going for the wii, can I have that guy’s plasma TV?

  5. democommie

    Mack:

    I think one of the bugs in the ointment for a lot of folks is the notion that people who fell into this trap were all greedy. Some of them were, but a lot of people were convinced by their bankers or brokers that it was a good idea. I know that I discount everything that salespeople (and these are all salespeople) tell me, but other people have a trust gene that I’m lacking. You are right about the toys needing to go, if for no other reason than to demonstrate that the folks have gotten the message about fiscal prudence–I just don’t know who’s gonna buy them.

  6. “But, it’s really similar to your neighbor’s house being on fire…”

    That’s right. I also heard it compared to a trip to the hospital. The emergency room staff doesn’t stop to ask how you injured yourself before treating you. They don’t want to know if there was “moral hazard,” they just want to help.

    Which reminds me of a good joke…which I won’t repeat here because I am getting better at self-editing.

  7. democommie

    BTW, I was stupid. I got done with Verizon in 20o6, not that I was old enough or well enough off to retire. But I took what I could get and left. For the last two and 2/3 years I’ve been living off of my savings. I’ve squandered most of my lump sum retirement and 401K to buy my house for cash and put some money into it. It’s not livable yet (it’s campable) but I hope it will be in a few months.

    Point is, being stupid probably kept me from losing about 1/3 of my little nest egg. It was never gonna be enough to live on, I’m glad I was an idiot.

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