Foreclosure

[The text below is from Amazon Politics Forum 31 August 2007]

John Gelles says:

Impending foreclosures due to imprudent purchase of what were soon to become unaffordable homes will punish families and America,

They will punish them more than America would like to see happen.

Is there a remedy -- to prevent potential damage to this nation (which is suffering enough from the war and past neglect of environmental imperatives)?

America could establish an independent bank with the authority to intervene in any and all foreclosure actions:
The bank could be authorized to buy all mortgages at their fair market value. Thereafter, the bank could be authorized to grant new mortgaged titles under rules that protected owners and prevented homeless results that run counter to the public interest.

The bank, as owner of all property until related debt is paid, would be protected from future loss by rules that were fair to all and make common sense in the long run.
The ideal of preventing mass refusal of people to pay a fair amount against a fair mortgage would have to be protected. So, as is the case with criminal and tax law, there would be a lot of detail and a lot of government intrusion into our private lives. So what? Home ownership is worth a lot of creative thought. If foreclosures wreck too many families, the costs to America in crime, disease and lost production will be horrendous.
Meanwhile, if we can fix the mess ahead of us, we may be able to retool lending -- to protect families and the nation from practices that are no longer the best we can devise.

Following the above posting there were several replies. Following such replies, were my following rejoinders:

John Gelles says:

To D. ~

I know you are right whenever you write (no sarcasm intended). We are allies in these funny pages.

Credit card debt must be used sparingly. But we do know that the economy as a whole is running on debt at the moment.

I would have it otherwise. I believe we could run the economy better if private parties saved as much as possible and public institutions spent wisely as much as possible.

The time would come under my wished-for system when when all private parties were rich and all public institutions were free of debt and spending wisely in the public interest. There would be no debt at all -- except at federal government level: and that sort of debt is what we today call "money".

I'm not being a wiseguy. I'm just asking that we focus on the real economy of things -- the things that money can buy.

Let us produce the things. Let us stop producing debt.

All the above is consistent with your last paragraph -- where you said: "Why is it that ALL Americans, even the wealthy, must have everything at the cheapest possible cost? We need to support our neighbors' livelihoods as well as our own."

You are so right. But it is not the buyer's fault -- it may be good to look for solid value when it comes to price.

When we do refuse to spend for products priced too high, we impose (we hope) a discipline that encourages and rewards excellence. But, often, as you warn, it does not.

Some fault lies with government when it buys on price instead of value. We ought to use prize juries for as many government contracts as possible.

D., it is indeed a pleasure to read whenever you write.

I have not figured out who may have recently been barred from this forum. I favor active censorship by Amazon authorities. No one has a right to be a spoiler in cyberspace.

What is a spoiler, you may ask? It's easy to know one when you read one.

John Gelles says:

To S. ~

it is easy to feel sympathy for homeless people -- they must be rescued in the largest number possible without causing a revolution in which nobody paid their next monthly mortgage installment.

If you would listen today to Dinesh D'Sousa on Book TV (CSPAN 2) at 12 noon Pacific and 3 PM Eastern time, you would hear why winning the war in Iraq is essential to your freedom and the freedom of Islamic and other peoples everywhere they want it.

You may know a way to protect your freedom and lose the war. I hope we never have to test the validity of your thought.

John Gelles says:

To N. ~

You have said: "If government gets involved, who is going to foot the bill?"

If you watched the PBS News Hour on Friday evening you know that President Bush, Fed Chairman Bernanke and members of Congress have all agreed the "BILL" for keeping tens of thousands of middle class Americans in the homes they own (but have been missing monthly mortgage payments for) will be radically re-valued: lenders will voluntarily re-finance (with lower payment longer term deals) some credit worthy owners; the FHA will guarantee some other owners' new mortgages after lenders sell the old ones to new lenders at fair market value; and some owners will just have to surrender their homes and hope to live with friends or family or in more affordable digs.

If not too many become homeless, the "BILL" will, accordingly, we reduced and paid and no one will be too put out about the 'not too many'. No one but those who do become homeless and the many citizens like me who will feel their pain.

The News Hour expert economists predicted that the three aforesaid branches of government had the will and knowledge to protect the great economy of the greatest nation on the face of the earth. They would not let a few imprudent loans do people like you and me in. We would be done in, you know, if unpaid debt escalated and caused first a depression then another great war. I lived through that unplanned fiasco (from 1930 until 1945) -- maybe you did not.

You, N., also said, "I believe 'environmental damage' is another result of government interference -- more than of the free market... because people have a monetary incentive to maintain the quality of that which they own."

You are right that socialist solutions in the past -- which denied ownership -- were hell on the environment.

But, ownership solutions here and in other sometimes-idiot places, have allowed people and firms (some who are owners of something, some who own nothing at all) to wreck the rivers, lakes, oceans, land, air, cities, towns and climate all around us -- WHICH THEY DO NOT OWN.

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