Collateral Damage

I don’t care if my neighbor gets government help in paying or renegotiating his mortgage.

I don’t mind if my neighbors are in “too much house,” or if they gambled that rising real estate values would make it possible for them to pay back a loan that was unrealistic for them. I don’t know if they were conniving bastards who put the whole economy at risk with their irresponsible borrowing, or if they were conned by a mortgage broker who was getting a fat commission and passing the risk on to clueless investors down the line.

There seems to be a lot of righteous indignation about the possibility that some people are going to get something for nothing here, and at taxpayer expense, but I’m not indignant. I’m pretty ticked off at the bankers and brokers and hedge fund managers who recklessly plunged us into this economic mess and have now walked away with comfortable fortunes while the rest of us scramble to survive, but individual homeowners? Not so much.

Personally, I don’t think it’s very important to own a house. There are plenty of ways to live that don’t involve marking off a piece of turf and saying it’s “yours,” but if some folks want to do that and feel happy in their lives because of it, I say fine. And because the real estate market and mortgage-backed securities have become such an integral part of the overall world economy, I think we — and by “we” I mean the federal government –Â ought to do what we can to stabilize that market and those securities, and if some people “get away” with something, that’s a small price to pay if it helps get us out of this depression.

Think of it as collateral damage in reverse: When we bomb a neighborhood in Afghanistan, we often kill and maim innocent people who happen to live next door to the terrorist targets we’re trying to get, and we shrug and call it collateral damage, one of the costs of war. On the other hand, when we rescue a neighborhood over here, maybe we’ll accidentally help people who are not deserving, along with the targeted honest homeowners. Let it go, people. It’s just the cost of repairing the economy.

The important thing is getting the country back on its feet and helping the deserving and needy people who are in over their heads. If some opportunistic deadbeats get a break, who cares?

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9 Replies to “Collateral Damage”

  1. My grandparents volunteered with their church’s St. Vincent de Paul society for many years. When they were distressed by the people who seemed to be fleecing StVdP for free food and clothing, the priest counseled, “It’s okay to make a mistake in the name of charity.” A nice ethic, indeed.

    I’m not sure, however, about all these bailouts left and right. I would surely rather see individual homeowners bailed out than monstrous industries, but I’m afraid we’re getting into too much spending. There’s a conflict in my own brain these days, because I do believe in funding social programs, but I am, personally, in my own finances, a conservative spender. All this government spending–in such large sums at once, of money we don’t have–seems like it will have a larger price tag later on. And no, I wouldn’t have funded the Iraq War, either. That would be better: We never went to Iraq, and so we could put all that money towards bailouts and the stimulus package.

  2. kStyleWe never went to Iraq. That would be preferable. But that money’s gone, along with whatever international prestige we once enjoyed. What we have now is a great big mess that must be dealt with, and the sooner the better, which means we can’t do the prudent thing and save up for a while before we spend the money. I am FTFO (freaked the fuck out) about it, but I fear that half-measures and delay will only exacerbate the problem, and in the end we’ll have to do an even bigger bailout, or suffer without plasma televisions for an entire generation. You’re young. Think about it.

  3. But what happens when the bill comes for the bailout?

    I’m also feeling FTFO. I want to go totally off the grid, have windmills and sheep and learn to can vegetables. Maybe I’ll join the fundies in their mountain hideout and pretend to pray with them.

  4. kStyle“. . . what happens when the bill comes for the bailout?”

    I don’t know. I think what the economists are saying is that going deeply into debt like this is bad, but not doing it will be worse. We only have a few choices in this matter, all bad, so we either do nothing, in which case you’d better get that windmill up, or we try for the least bad of all our possible paths of action, and hope that at least when the bill comes due it turns out that the action we took has made it possible for us to pay up.

  5. What gets me is that some people were never in “too much house.” For example, my home is not too much house. Yet, my mortgage in a mere three years is double what it once was! I was guided by my attorney to do it this way despite my protests. While I am lucky enough to be able to shoulder this debt, most people are not. That does not make me irresponsible, it makes me a product of a system that told us to not worry about things despite the hard and good questions we asked. To that end, I have documented evidence in my case of things that were promised that never happened. We were sold a bill of goods that was never true and banks are lying about that now.

    I am eager to see how this all plays out and what happens to folks like myself who did the research and believed what we were told.

  6. Girlfriend – Just guessing here, but I’d say your attorney, your mortgage broker and your real estate agent all thought your new home would increase in value over these three years to a point at which you’d be able to refinance at more favorable terms before the ARM adjusted upward, and your payment would remain low and maybe you (and they) would even be able to take a little cash out of the deal. So in a sense, nobody’s at fault here, except that you employ these people to assist you in big transactions because they are supposed to be experts and they are supposed to be looking down the road and giving you prudent advice, and THEY DIDN’T DO THAT. Other than that, everything’s cool, huh?

    Holly – Whew! Now I don’t have to have my friend Tommy check with your girlfriend to see if you like me. (I like you, too.)

  7. I’m with you 100%, Larry. And I’ve felt this way for awhile when “blaming the homeowner” was all the rage. Like, waaaaaaay back in Sept 08. What I didn’t “get” about that argument was that’s all the argument they had! Like it was going to fix the whole problem!

    Well, it won’t. If there are five houses on my street purchased by deadbeats and I’m not a deadbeat — just blaming the deadbeats ain’t gonna cut it! Something needs to be done.

  8. Think of it as collateral damage in reverse

    Amen! As well as you comprehend the details, LJ, you’ve got just such an expert eye at discerning the Big picture.

    BG gets at the point the Pols try to make: “If there are five houses on my street purchased by deadbeats…” It’s more likely less than 3 of those home-buyers were “deadbeats”. But their mere existence in numbers across the nation give anecdotal evidence to the “individualists” who believe they themselves are more deserving of having the rules of the game – Economics – written by, for and about them and them alone.

    Conflict sells. Sales generates wealth. Wealth corrupts. But it’s all on a continuum which can only be managed at subtle points and angles. If this Admin manages to manage the right twists and turns, a whole new source of wealth will grow up; it will be given slightly more logical and effective rules to the whole game.

    That is if we want those results to be Win-Win, where everyone has to lose a little in proportion to what they started out with, as opposed to with what they’ve grabbed under the old rules.

    {whew!} As is always, we have Got To do what we can and see how it goes, eh.

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