A group of state government regulators and attorneys general are whining that lenders aren't modifying their loan agreements fast enough for their liking and are resorting to threats.
"If loan mitigation and modification don't produce fruitful results for homeowners, I, for one, would be inclined to look at litigation possibilities to secure help for homeowners," said Iowa Attorney General Tom Miller.
He says that because the constitution prevents him from "impairing the Obligation of Contracts", so he'll do an end run and punish lenders that won't toe the line.
The group also has a lot of unsolicited advice on how lenders should be handling these delinquent loans, as if they know more about the subject than those who do this full time and have the most to lose if they do it wrong.
They don't realize or don't care that their intervention and threats will in the long run, do more harm than good and make the rest of us pay for the mistakes of others. If investors see that the government will arbitrarily pressure or intimidate them into modify these securities when things go south, then they'll either put their money elsewhere or demand higher interest as compensation for the additional risk. That punishes future borrowers and everyone else as money becomes less available for construction and real estate investment in general.
These homeowners never would have shared the profits with anyone if their timing had been better and they hadn't been so reckless. And I don't want to hear that they were pressured into these loans. They knew what they were signing and if they didn't then they shouldn't have borrowed the money in the first place. Or borrowed less.
What to do? Let the market take it's course and don't prolong the pain by propping up loans that deserve to fail. It's a mess, but fiddling around with private contract rights just prolongs and exacerbates the problem while eroding freedom.
Side Note: The article quotes someone from Acorn Housing Corp., a "nonprofit housing counselor." No, they're an affiliate of ACORN, a radical anti-capitalist group that has been implicated in numerous voter fraud scandals, among other things. The fifth column keeps rolling along, using journalists as willing dupes.
Thursday, April 24, 2008
The Crimes Government Inspires
Two landlords in San Francisco have been arrested for terrorizing a tenant after failing to evict him under that city's statist rent control laws. Now, I'm not defending their actions. They knew or should have known the rules when they bought the building. Given that this is San Francisco, they also should have known that those rules would only be bent in favor of the tenant. But this kind of thing could only happen when government interferes in private contracts and free markets.
As Chris Rock said of O.J. Simpson: "I'm not saying he should of killed her. But I understand"
The tenant in question was the last holdout in the owner's unsuccessful attempt to empty the building under what's known as the Ellis Act. Under this byzantine law, the landlord could only evict if they were "going out of business" and paid the tenant $4,500 in relocation costs. An additional $3,000 is required if the tenant is a senior or disabled. I suspect the tenant was holding out for more by exercising property rights he never deserved in the first place. The landlords nevertheless still had to pay their mortgage, taxes and other bills without their government mandated income because the courts allowed one tenant out of six to remain on their property.
It's easy to do good things for the most voters with others property by forcibly inserting yourself as a third party to a contract. It's even easier when you assume none of the risk or cost of this forced charity.
As with most liberal policies, these laws end up hurting the very people they were supposed to protect. It is axiomatic that when you restrict the cost of anything, you will have less of it. That is glaringly obvious with rent control. The cities and states with the lowest vacancies and highest rents are those with these laws. And where they've been repealed, as in the Boston area, availability has skyrocketed and rents have dropped. That's what profit driven competition does if it's allowed to do it.
But the proponents of these policies are concerned only with intentions, not results. The damage they do is an unfortunate but necessary consequence of their Utopian ideals. Whether they actually work isn't the point. To them it's not fair that some own property and others must rent it. So rather than encourage more ownership, they devalue it while handing more power to themselves.
So who won here? No one but the government. The other two parties lost and are miserable, but equally so. That's how socialists define success.
As Chris Rock said of O.J. Simpson: "I'm not saying he should of killed her. But I understand"
The tenant in question was the last holdout in the owner's unsuccessful attempt to empty the building under what's known as the Ellis Act. Under this byzantine law, the landlord could only evict if they were "going out of business" and paid the tenant $4,500 in relocation costs. An additional $3,000 is required if the tenant is a senior or disabled. I suspect the tenant was holding out for more by exercising property rights he never deserved in the first place. The landlords nevertheless still had to pay their mortgage, taxes and other bills without their government mandated income because the courts allowed one tenant out of six to remain on their property.
It's easy to do good things for the most voters with others property by forcibly inserting yourself as a third party to a contract. It's even easier when you assume none of the risk or cost of this forced charity.
As with most liberal policies, these laws end up hurting the very people they were supposed to protect. It is axiomatic that when you restrict the cost of anything, you will have less of it. That is glaringly obvious with rent control. The cities and states with the lowest vacancies and highest rents are those with these laws. And where they've been repealed, as in the Boston area, availability has skyrocketed and rents have dropped. That's what profit driven competition does if it's allowed to do it.
But the proponents of these policies are concerned only with intentions, not results. The damage they do is an unfortunate but necessary consequence of their Utopian ideals. Whether they actually work isn't the point. To them it's not fair that some own property and others must rent it. So rather than encourage more ownership, they devalue it while handing more power to themselves.
So who won here? No one but the government. The other two parties lost and are miserable, but equally so. That's how socialists define success.
Tuesday, April 22, 2008
Happy Earth Day Vladimir!
Today is Earth Day and also Vladimir Lenin's birthday.
Coincidence? Probably not. Unsurprisingly, the US Communist Party blames capitalism for the global warming hoax and every other problem in the world. And their rhetoric is so close to Democrats in general and Al Gore in particular that it's impossible to ignore. Indeed, they've given a ringing endorsement to whatever ticket Democrats eventually nominate, saying among other things: "Global warming has to be examined within a larger context of capitalism and other environmental problems... Capitalists are to blame for the crisis" As former leftist David Horowitz once said: "Green is the new red".
Coincidence? Probably not. Unsurprisingly, the US Communist Party blames capitalism for the global warming hoax and every other problem in the world. And their rhetoric is so close to Democrats in general and Al Gore in particular that it's impossible to ignore. Indeed, they've given a ringing endorsement to whatever ticket Democrats eventually nominate, saying among other things: "Global warming has to be examined within a larger context of capitalism and other environmental problems... Capitalists are to blame for the crisis" As former leftist David Horowitz once said: "Green is the new red".
As a wholly owned subsidiary of the Democrat Party, the environmental movement is a favorite hideout for communists displaced after the fall of the Soviet Union and it's used to undermine American liberty by exploiting the good natured ignorance of its people. This is just a new tactic however, in the slow but successful effort to increase the power of government and reduce the freedom of individuals that has been going on for over a hundred years. So successful that 35% of voting age adults agree with this statement: Does the Constitution include the following statement about the proper role of government: "From each according to his ability, to each according to his needs"?
That so many Americans think a concept that was the catalyst for the slaughter of 100 million (and counting) people is part of our founding document is a frightening consequence of allowing the infiltration of our education system by this fifth column.
The Democrat candidates, were they to be honest, would tell you they really don't have a problem with any of this since they find more common ground with Marx than Jefferson.
So happy Earth Day. I for one will cook a steak on my charcoal grill, while smoking a fat cigar as I imbibe strong drink from a styrofoam cup in celebration of what's left of my freedom.
Sunday, April 20, 2008
Florida Government Looks at Bull Testicles
A state legislator wants to outlaw those bull nuts you see on the back of trucks. Explaining his position, Carey Baker said "he fears the bumper displays could become more graphic in the future. 'I think this is the proper place to draw the line' " I know this whole thing is stupid, but it brings up a larger point. Mr. Baker and the government have no moral authority to draw any line on private behavior that doesn't forcibly or fraudulently infringe on the rights of others.
This nonsense stems from the same intrusive philosophy that government uses to dictate when you can smoke on private property, eat transfats or what kind of light bulb you're allowed to buy. It's a zero-sum game. The more power government has, the less freedom you have and vice versa.
If passed, this would go down with all the other dumb laws low rent tyrants have passed over the years to micro-manage what individuals choose to do. It's also illegal in Florida to fart in public after 6 P.M. If that law were enforced, every mexican restaurant in the state would have to close down.
Side Note: In the same article we have this nugget:
"This may be more a reaction to a worsening economy than an expression of manliness, said cultural anthropologist Allan Burns, who teaches at the University of Florida in Gainesville.
"In these times when people are not having fun and houses are being foreclosed upon and the economy is so bad," Burns said, "the fact that people can be a little cheerful may be a good thing."
Only a pinhead who's been sheltered his whole life in the hothouse of academia could make a reach like that. It's so stupid on so many levels my head hurts just thinking about it. That my tax dollars pay this dope's salary just makes it worse.
This nonsense stems from the same intrusive philosophy that government uses to dictate when you can smoke on private property, eat transfats or what kind of light bulb you're allowed to buy. It's a zero-sum game. The more power government has, the less freedom you have and vice versa.
If passed, this would go down with all the other dumb laws low rent tyrants have passed over the years to micro-manage what individuals choose to do. It's also illegal in Florida to fart in public after 6 P.M. If that law were enforced, every mexican restaurant in the state would have to close down.
Side Note: In the same article we have this nugget:
"This may be more a reaction to a worsening economy than an expression of manliness, said cultural anthropologist Allan Burns, who teaches at the University of Florida in Gainesville.
"In these times when people are not having fun and houses are being foreclosed upon and the economy is so bad," Burns said, "the fact that people can be a little cheerful may be a good thing."
Only a pinhead who's been sheltered his whole life in the hothouse of academia could make a reach like that. It's so stupid on so many levels my head hurts just thinking about it. That my tax dollars pay this dope's salary just makes it worse.
I Agree With Barney Frank?
Proving that even a stopped clock is right twice a day, Rep. Barney Frank along with Ron Paul introduced legislation last week to decriminalize the personal use of marijuana. This country wastes billions every year enforcing these stupid laws while cruelly disrupting and destroying the lives of thousands of decent people. Republicans and conservatives like to rightly point out the liberal propensity for arguing issues based on emotions rather than facts. They should take their own advice on this one.
Opponents of marijuana decriminalization will never be able to reconcile their position while alcohol, a far more dangerous and addictive drug, is legal. Prohibition of that drug didn't work either and served only as a source of income for organized crime. The prohibiton of Marijuana has been doing the same for far longer and has caused much more damage. It's time to end this insanity.
Opponents of marijuana decriminalization will never be able to reconcile their position while alcohol, a far more dangerous and addictive drug, is legal. Prohibition of that drug didn't work either and served only as a source of income for organized crime. The prohibiton of Marijuana has been doing the same for far longer and has caused much more damage. It's time to end this insanity.
The Angry White Man Explained
The concerns of the largest voting block in the country are all too often dismissed, mocked, ignored or just misinterpreted. Here's an explanation of who these guys are.
Hat Tip to Nietzsche is Dead
Hat Tip to Nietzsche is Dead
Saturday, April 19, 2008
Why Are Home Prices Still Unaffordable?
Median home prices have fallen, but not enough to match income growth. Which means homes are still less affordable than they were seven years ago. If the real estate bubble has truly burst, then what's causing it? The main culprit is land use, environmental and planning regulations that take large swaths of land and either prohibits development or makes it prohibitively expensive. Much of it in places where housing demand is highest. The price of existing housing skyrockets as the supply is restricted. These regulations mostly benefit current homeowners who demand policies that price the less fortunate out of the market and trample on the property rights of others. To add insult to injury, liberals then demand developers set aside "affordable housing" as yet another condition in order to ameliorate the problems they created.
Chanting that they must "preserve the character" of the community or protect "environmentally sensitive" land, they can feed their sense of moral superiority and wallets by forcing others to pay the bill as they lock them out. They believe their ownership of property gives them the right to dictate the terms of other's ownership in order to benefit themselves. Ironically, many of these regulations wouldn't allow the current resident's homes to be built either had they existed at the time.
It comes as no surprise that the most expensive markets are the ones with the most strict and byzantine regulatory structures. Nowhere is this fact more striking than in California, the state with the greatest hostility to new development and by far the most expensive markets in the country.
Any study of home prices needs to adjust for the distortions these markets cause.
Chanting that they must "preserve the character" of the community or protect "environmentally sensitive" land, they can feed their sense of moral superiority and wallets by forcing others to pay the bill as they lock them out. They believe their ownership of property gives them the right to dictate the terms of other's ownership in order to benefit themselves. Ironically, many of these regulations wouldn't allow the current resident's homes to be built either had they existed at the time.
It comes as no surprise that the most expensive markets are the ones with the most strict and byzantine regulatory structures. Nowhere is this fact more striking than in California, the state with the greatest hostility to new development and by far the most expensive markets in the country.
Any study of home prices needs to adjust for the distortions these markets cause.
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