27 August 2010

Wake up and smell the feces

On a radio station in northern California Tuesday morning, there was a county assessor lamenting about banks that are entering into revised mortgage agreements with customers while continuing to pursue foreclosure. The result in some cases is that houses are being foreclosed within days of arriving at a revised mortgage agreement. In classic latte liberal form, this overcompensated government employee was pointing out how evil the banks are. By the way, he should have been on the clock, which means that the taxpayers are paying for him to do radio interviews. Classic progressive fecal matter intended to skew your emotions so that you feel sorry for the poor mortgagee.
While this is a classic case of "the right hand not knowing what the left hand is doing" on the part of the bank, claiming malicious intent is dishonest and libelous. What this typical government hack fails to recognize is that government programs have encouraged the banks to put themselves into positions of being over-leveraged and providing mortgages to people who couldn't afford them. They never mention that sixty percent of the mortgages "redone" through the federal assistance program last year are already in arrears/foreclosure again. That was money well spent.
The Austrian school economists have been highlighting the risks inherent in government intervention in the housing market (Fannie, Freddie, CRA, etc.) for years and now that the chickens are coming home to roost, is it really the banks that are evil.
Whether there was malicious intent in the banks or even the government is beside the point now. The real question is how do we get through this. We need to allow failure to happen and flush the system. People and businesses fail all the time and the self-reliant learn from it and move on with a revised perspective on how to handle the next issue.
It is time to stand up and let your government officials at all levels know that allowing rewards to be individualized while socializing all risks is destructive and misguided. Forcing people to accept the risk along with the potential of reward will go a long way to correcting what is wrong with this country.