Socialism Isn't What I'm Worried About

Last week I jumped on board with a tirade from CNBC commentator Rick Santelli. In short, Rick's rant threw a stiff jab at the Obama administration for throwing money at homeowners who weren't conservative and responsible with their home purchases.

There was a lot of reaction to what I wrote, and much of it seemed to suggest that one has to either be on the side of the corporatocracy that's stomping all over the little people or on the side of the evil socialists who are dead set on taking money from the rich and burning it in a massive anti-capitalism bonfire. I've gotta believe that I'm not the only one who falls in between the two.

But if I'm not picketing against socialism or shaking my fist at The Man, then what am I for? In short, I'm for smart policies that aren't ...

... Wasteful "help"
The primary reason that I am on board with Generalissimo Santelli when it comes to housing help is that I don't see the plan as a good use of government money. The housing market needs to find a new equilibrium and it's not going to do that while government cheese is getting baked into the pie. And that's not to mention the fact that the money is going to less responsible borrowers that are now counting on a refinancing to be able to keep their home.

Ben Bernanke recently addressed such concerns by suggesting that the situation is similar to calling the fire department when your neighbor sets his house on fire while smoking in bed. The idea is that your neighbor should be punished for smoking in bed, but you don't want to see your house go up in flames in the process.

While Professor Bernanke has a few more years of economic study under his belt than me, I'm still going to have to disagree with him. If my neighbor defaults, my house doesn't go up in flames, the construction will be just as sound as it ever was, and I'll continue to be able to live comfortably in it. After all, I was never depending on an inflated home value as a source of income.

... Allowing the big banks to ignore their problems
Banks all over the country are suffering as a result of the real estate decline and rising consumer credit defaults -- that's no secret. But many banks around the country -- take Stock Advisor pick Umpqua Holdings (Nasdaq: UMPQ  ) or Bank of the Ozarks for example -- have stayed profitable and well capitalized even as times get tough.

There are two very glaring examples of banks that do not fall into this category. If you haven't already spat on the floor and uttered their names, I'm talking about Bank of America (NYSE: BAC  ) and Citigroup (NYSE: C  ) . The size and financial reach of these two banks is holding the country hostage as they limp along on Uncle Sam's crutch and keep their asset exposure all too opaque.

It's time for the government to stop handling these two with kid gloves.

... Putting an end to the health-care drain on consumers' bank accounts
Think the U.S. is a land of profligate spending where consumers run up massive amounts of debt buying big-screen TVs and fancy clothes? Think again. Spending on most consumer goods has stayed relatively in line with historical levels, except for one massive, glaring item -- health care.

Don't get me wrong, I think the folks at Pfizer (NYSE: PFE  ) , Stryker (NYSE: SYK  ) , and other major (and minor) health-care companies are doing great things for medicine, and they need to be rewarded for their work. But it gets harder and harder every year to argue that health-care costs haven't spiraled out of control. And what's worse is that we don't even have a lot to show for it -- though we spend the most on health care as a percentage of GDP of any country in the world, we don't break the top 40 when it comes to life expectancy.

But as for those creating jobs ...
And if I haven't made it clear already that I'm all for helping out the average Joe on the street, I'll go ahead and say it -- it's jobs, jobs, jobs that matter, and I think the government should be helping to create them. You see, the great thing about job creation is that it pumps money into the economy, it gives Joe a paying job that can help him pay his mortgage, and it can even help lay the groundwork for future industry leadership for the U.S.

Take, for example, the funding of a single solar cell manufacturing site. Not only do you end up employing workers directly to build the site and work in it when it's finished, but you help bolster companies like Fluor, U.S. Steel (NYSE: X  ) , and Caterpillar (NYSE: CAT  ) that might be involved in the design and construction of the project.

New alternative energy capacity and research could help bring down the cost of clean energy, making it more competitive with traditional sources. On top of that, we'd be helping to bolster the U.S.' position in a growing global industry. That certainly seems like a lot of birds to kill with that one stone.

One way and another
So, I'm not worried about our country careening into socialism, nor am I interested in giving Joe on the street everything he wants. There are some places where the invisible hand should be slapped aside and the government should step in, but at the same time, average Joe is going to need to be told to take his lumps in other places. Pitting socialism and capitalism head-to-head in a Bloodsport-style death match may make for exciting -- if not loud -- media coverage, but I think we're short-changing ourselves if we think that one dogmatic view or another needs to emerge victorious.

But of course that's just the take of one common Fool. What do you think?

Further financial Foolishness:

Stryker and Pfizer are Motley Fool Inside Value selections. Pfizer is a former Motley Fool Income Investor pick. Umpqua Holdings is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Stryker. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer owns shares of Bank of America, but he does not own shares of any of the other companies mentioned. The Fool’s disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants …


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  • Report this Comment On February 25, 2009, at 4:05 PM, Jedermann wrote:

    One of the best commentaries I've read on the site for a while. The dogma coming from both sides of this debate his been excruciatingly short-sighted and inexperienced. The Capitalism vs Socialism debate is just as debilitating as the Democrats vs Republicans duality. These dualities that we tie ourselves too (like football fans tailgating a Sunday game when the issues are really much more serious) only hurt us. Each side has valid points, but the powers that be are to arrogant to admit the flaws of their side. Black and white, us or them philosophies never succeed. I live in so called 'socialist' Europe. But in reality, its a free market with the best of regulations. The systems here could certainly improve with more capitalist fluidity, but don't tell me good health care and good schools aren't worth it.

    There is always success when mixing the best ideas from diverse philosophies and backgrounds. That is the American economic keystone.

  • Report this Comment On February 25, 2009, at 4:21 PM, TMFCop wrote:

    Hey Matt,

    Unfortunately, when you don't slap down the iron glove of government intervention -- I won't call it socialism, though it is what it is -- in every instance it rears its ugly head, it continues to pop back up using its prior issue as a justification for the current one.

    We're only talking about bailing out homeowners because we bailed out the banks, bailed out the car makers, allowed investment houses and credit card companies to become "banks" to get bailout money, and on and on. This sop to regular Joes is only because everyone else has already lined up at the taxpayer's trough and gorged themselves at our teat.

    As for high healthcare costs, you're looking at effects rather than cause. And the cause has been government's subsidy of the costs of medicine and care. It's no wonder prices have spiraled beyond control. It hasn't been for a lack of government internvention, but rather too much already.

    Those who routinely advocate government intervention as a means of solving our ills often succumb to the conceit that they know best what's right for everyone else, or as you term, "smart policies."

    Sadly, government created jobs don't create wealth, they destroy it. They first have to take the money from those who are productive and give it to those they choose to employ. Along the way, much of that money is siphoned off to finance the programs funding the jobs. It merely takes from the right pocket and puts it in the left, with a little (if we're lucky) removed in the exchange to pay for the transfer.

    Opposition to the housing bailout is but a belated start to what should have occurred when the wizards first contemplated bailing out Wall Street. Government intervention, socialism, communism, or whatever you want to term it ain't good policy no matter the cause.

    Thanks for stirring the discussion, even if we stand on opposite sides of the yawning chasm.

    Rich

  • Report this Comment On February 25, 2009, at 4:34 PM, lawyerboy40 wrote:

    A little too utopian for my taste. Government intervention like the so-called "home owner bailout" simply takes wealth from the industrious and gives it to people like these -- http://www.gopusa.com/commentary/mmalkin/2009/mm_02251.shtml

  • Report this Comment On February 25, 2009, at 4:57 PM, wuff3t wrote:

    Rich,

    "Unfortunately, when you don't slap down the iron glove of government intervention -- I won't call it socialism, though it is what it is -- in every instance it rears its ugly head, it continues to pop back up using its prior issue as a justification for the current one."

    I agree, however anyone who thinks we have ever lived in true free market systems is deluding themselves (I'm not accusing you of making that assertion by the way, just making a general point). Our political classes have always engineered our market systems to suit their wealthy benefactors - Big Business. Why else would companies spend millions lobbying if they didn't (generally) get at least most of what they wanted in the end? Our political leaders are funded by Big Business, and so an unholy alliance is formed. The rich fund government, and in return they get to stay rich.

    Wasn't it Chomsky who wrote something about the country being founded on the principle that the primary purpose of government is to protect property from the majority, ie the wealthy wanted a way of ensuring that they always stayed wealthy, so they invented a system that made it so?

    (I expect even paraphrasing Chomsky will raise a few hackles on here, but hey, let the debate rage!)

    We're simply not going to avoid government intervention however much we want to. The truth is we just don't really have a free market: governments have always protected the interests of the wealthy. It might make a nice (not to say fairer) change if they tried to protect the interests of the not-so-wealthy for once. Call it socialism if you like, but to me it's a heck of a lot less objectionable than constantly skewing conditions in favour of those who already have more money than they can ever sensibly spend.

  • Report this Comment On February 25, 2009, at 5:20 PM, rhpowell4 wrote:

    Why are we indebting our children and grandchildren for the excesses and mistakes of our time? Shouldn't we all take our collective lumps, let the economy settle, let what fails fail, and learn to spend within our means going forward? We should not use the government as a "get out of jail" free card. We are adults who need to live with the results of our choices. Having a house is not an entitlement. I am willing to spend my hard earned tax dollars to help those who go homeless, but loosing your house and having to rent...well, I don't want to spend my money on the mortgage you can no longer afford....and I don't expect others to pay for my mortgage either.

    The late Dr. Adrian Rogers summed up my sentiments very well, when he said: "You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

  • Report this Comment On February 25, 2009, at 5:26 PM, ReillyDiefenbach wrote:

    Why would I be worried about a system (democratic socialism) that provides a far higher standard of living than what I presently enjoy? Health care at very little compared to the ridiculous amount of money I'm paying now, which provides no coverage AT ALL for a lingering condition, free high quality education, perfect roads, no military spending to speak of, no fat people, etc. etc. etc.

  • Report this Comment On February 25, 2009, at 5:27 PM, Snertie wrote:

    And you believe this because other government energy & infrastructure programs like ethanol, for instance, have worked out so well for the taxpayers, consumers, and economy overall?

    Nope. This is mass corporate welfare for the politically well connected. The taxpayer will never get a return on this to make up for the massive inflation that printing over $3-trillion will create.

  • Report this Comment On February 25, 2009, at 5:29 PM, MyPiggyBank888 wrote:

    I am ready for the "Robin Hood Approach". The example of the rich, who should be taxed at 80% are those CEO, who prior to Bush leaving took the financial bail out from the common folk and gave themselves a bonus for losing Billions of Dollars. I love out of sight out of mind. I say we need a Robin Hood!

  • Report this Comment On February 25, 2009, at 5:31 PM, ajstudebaker wrote:

    "it's jobs, jobs, jobs that matter." AMEN. In addition, stimulus money is best spent on investments, like insulating homes or putting solar panels on government buildings, which save money or produce income down the road.

  • Report this Comment On February 25, 2009, at 5:32 PM, coerte wrote:

    It is beyond me why anyone thinks the government will run a bank better than the private sector. In Germany it is the State owned banks that are in the most trouble and the Deutsche Bank has not had to accept a Euro-cent. If the idea behind nationalization is simple having access to nearly endless amounts of taxpayer cash, then the banks should go under. Creative destruction!

    Rather than bailing out anyone on the mortgage front would it not make more sense to cancel the mortgages for those that are in over their head and just have them pay rent. The houses can't be sold anyway in this environment. At least this would go a long way in pinpointing value.

  • Report this Comment On February 25, 2009, at 5:36 PM, marceloreyna wrote:

    Matt,

    Thanks for a viewpoint that tries to find new ground in the debate. I support the Obama administration and applaud his efforts at attempting to tackle a massive challenge that he fully inherited.

    However, no matter how hard I try, I can not fully embrace the concept that bailing out individuals who could not live within their means with my money is helping me. (We live in a home with a mortgage payment that is well within our means) Maybe it is the inherent capitalist in me that says those who did not follow time-honored, sound fiscal principals should feel the ramifications of their decisions. Where is the accountability?

    I believe the moral hazard is more dangerous than the temporary lose in home value. Time will heal home valuations. Letting these people off the hook will only encourage further negligence. The next collapse will be crippling. Track the trends of federal bailouts since the early 70's. They have only gotten bigger, costlier and more impactful to our economy, society and today our global community.

    Rewarding those who did wrong on the backs of those who have done the right thing is the absolutely wrong message.

    Marcelo

  • Report this Comment On February 25, 2009, at 5:36 PM, wpbuck wrote:

    The only problem with government's violation of our individual rights in the name of socitial altruism is that it is inherently evil. If my neighbor takes money from me at gun point to subsidize his mortage it is a crime and no less wrong than the government taking the money from me to give to him. In any compromise between good and evil only evil can prosper.

  • Report this Comment On February 25, 2009, at 5:42 PM, colleran wrote:

    I think you would feel differently about the homeowner bailout if you were living in a neighborhood where a large percentage of homes are now empty due to foreclosure. Many of those homes have been completely trashed including all of the plumbing etc. torn out. It would take massive amounts of money to fix up or replace these homes. The cost of letting the market handle it seems too high to me.

  • Report this Comment On February 25, 2009, at 5:48 PM, Snertie wrote:

    Before referring to "Robin Hood", please remember the relevant context: Robin Hood stole from the The Sheriff of Nottingham, who was collecting taxes on behalf of King John, and gave it back to the taxpayers.

    I think we could use more of the real "Robin Hood", instead of the socialist's version.

  • Report this Comment On February 25, 2009, at 5:58 PM, WhoUCallinAClown wrote:

    2 very relevant quotes, that I believe are both completely self-evident truths:

    "No nation ever taxed itself into prosperity."

    - Ronald Reagan

    And oh, by the way... the tax man is coming soon... the spending is happening first, but the bill is coming, make no mistake!

    "You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away mens' initiative and independence. You cannot help men permanently by doing for them what they could, and should, do for themselves."

    - Abraham Lincoln

    Shouldn't fear (or be worried about) Socialism? Are you kidding me? Be AFRAID, be very AFRAID!

  • Report this Comment On February 25, 2009, at 6:12 PM, eldetorre wrote:

    I'm tired of hearing about the evils of socialism. Socialism is not necessarily taking from the rich to give to the poor. It is taking from all to address universal social needs that the market does not address. We don't consider our armed services a socialist evil do we? Markets are not at all efficient, they are expedient. Expedience leads to waste.

    However I do not agree with the present form of mortgage bailouts. Why? Because they take money from all for the private benefit of the few. That is not socialism, it is theft.

  • Report this Comment On February 25, 2009, at 6:39 PM, jmichaeljaffe wrote:

    No, Matt, it's not jobs, jobs, jobs. Markets and growth don't result from jobs; quite the reverse. Creating jobs with devalued capital leads to hyperinflation. The markets don't lie.. and they won't be lied to for long.

    We're looking at our investments tank because of a very reasonable lack of confidence that America can get her spending under control. A couple decades ago, an expectation - and a constituency - was engineered that changed home ownership from an significant individual achievement to a right of entitlement. Mortgage-backed securities, ridiculous credit, and government incentives pooled into a puddle of gasoline waiting to ignite. In the middle of it all is the house of paper that is our currency.

    It is almost apocalyptic how perfect is this storm. What is our government's response? More spending, most of it not even directed at fixing the credit markets. "No earmarks," he said last night. Oh, really?

    The only way out of this is for America to accept the pain now and restructure what needs to be restructured. We're delaying urgently needed chemotherapy in favor of a smorgasbord. We will choke on this.

  • Report this Comment On February 25, 2009, at 6:39 PM, Snertie wrote:

    The problem is, that "social needs" are endless. The demand curve for things that seems free is 100% vertical.

  • Report this Comment On February 25, 2009, at 6:44 PM, Snertie wrote:

    Jobs: The government does not "create" jobs. All it can do is reallocate resources from one place to another. The President will inevitably take credit for the 3-million jobs he promises to create. What will not happen is his taking the blame for the 3-million-plus jobs that will be sacrificed due to consumers not spending their own money, or from capital taken from other corners, or due to the inevitable stagflation.

  • Report this Comment On February 25, 2009, at 6:53 PM, wolfecraig wrote:

    Matt, Matt, Matt...

    Health care costs have spiraled out of control, but don't you think frivolous lawsuits and government controls have had something to do with it? There are even states that won't allow their citizens to shop for lower priced insurance outside of their own state. Allow people to use the free enterprise system, capitalism, to get the prices down. Get the government out of health care.

    So how do you feel about drilling for oil in our own country while we research alternative energy sources? How about clean coal technology? Why do we want to have our country put trillions of dollars to make our place in the green energy industry? Oh yea, science has already determined that man made global warming is going to kill us all. Okay, right, now I understand. It must really bother you that temperatures have been going down for the past 10 years.

    You better be worried about careening in to socialism, because we are. There is no middle ground. When government starts telling private citizens how much money they can be paid, we are heading down the wrong road. If they can tell the most successful among us, they can tell all of us what we can be paid.

    Now, regarding the banks, it is very popular to blame them for everything that has gone on. I guess people are just starting to realize that they are profit driven businesses. They provide a product and a service for money. Wow, that must come as a huge surprise. Why does everyone want to ignore the elephant in the room? Our Congress, our government, through their mandates to Fannie Mae and Freddie Mac dictated who was going to be loaned money. Why does everyone want to ignore the fact that our Congress screwed up our housing market and brought the banks to their knees.

    Oh, by the way, if your neighbor's house is foreclosed, you will suffer with a significantly lower value. 60% of the homes in Florida are in a negative equity position. Everything is lovely until you have to move. Lets say that you lose your job and want to downsize. You owe more than your home is now worth. What do you do? You can't afford to sell your home to get a home that you can afford.

    I honestly thought that the Motley Fool would be a site that supported capitalism, but after reading a few of the recent articles, I am not so sure.

  • Report this Comment On February 25, 2009, at 7:09 PM, unemployedwhy wrote:

    Why not bring the jobs back to the U.S.A.

    take pride in products andhave a fair trade

    policy.

    A flat tax wouldn't hurt either.

    It's more fair than we are dealing with now

    Thank You.

  • Report this Comment On February 25, 2009, at 7:11 PM, dibo528 wrote:

    The author of this article said, "If my neighbor defaults, my house doesn't go up in flames, the construction will be just as sound as it ever was, and I'll continue to be able to live comfortably in it. After all, I was never depending on an inflated home value as a source of income."

    This is true, as long as you don't lose your job. But, if you lose your job, moving to another place where there are more jobs is impossible when you're underwater on your mortgage. Even if you could sell the house, you won't get enough to cover the debt incurred when you purchased the house. That's what happened to my significant other.

  • Report this Comment On February 25, 2009, at 7:13 PM, xetn wrote:

    I would like to offer the following link for everyone, to once and for all, try to really understand what government intervention is all about. The link is written by Professor of Economics; George Reisman, and offers a very clear perspective of wrong-headed thinking. I will warn you that the article is rather lengthy but it provides the reader with a short course in ecomomics.

    http://blog.mises.org/archives/009504.asp

  • Report this Comment On February 25, 2009, at 7:32 PM, ecloud wrote:

    ReillyDiefenbach wrote: "Why would I be worried about a system (democratic socialism) that provides a far higher standard of living than what I presently enjoy? Health care at very little compared to the ridiculous amount of money I'm paying now, which provides no coverage AT ALL for a lingering condition, free high quality education, perfect roads, no military spending to speak of, no fat people, etc. etc. etc."

    Which country are you talking about?

  • Report this Comment On February 25, 2009, at 7:39 PM, dharr wrote:

    Unfortunately, the foreclosure bailout is for the banks, not the homeowners. There are plenty of people out there, such as myself, who have great credit & who are so far, still employed who would love to take over those mortgages. There are plenty of foreclosed homes in my own neighborhood. I have my eye on one of them . Unfortunatley the bank wants 2x what the house it worth, so it just sits there. I made a reasonable offer that was declined. The bank has asked the neighbors to park their cars in the drive way to make it look lived in. You'd never know it was empty. I contacted my bank for a pre auth & never heard back from the rep. They obviously aren't dying for business. It appears that the banks have been hoarding these homes. they are just starting to let them trickle out into the public now. Could it be that they needed them to get the bailout money ?

    Capitalism / Socialism ? ... Take a look at these sites :

    http://www.thezeitgeistmovement.com

    http://www.thevenusproject.com

  • Report this Comment On February 25, 2009, at 7:40 PM, DivHawk wrote:

    "The only problem with the government's violation of our individual rights (like using our future tax dollars to 'bailout' the banks, insurance companies - and it looks like AIG IS coming back for more - auto makers and whatever other industry the government is convinced is necessary) is that it is inherently evil. If my neighbor (the aforementioned group) takes money from me at gun point (we're too big to fail) to subsidize his mortgage (crisis, can we say CDO's and the rest of the alphabet soup they created) it is no less a crime and no less wrong than ....

    In any compromise between good and evil, only evil can prosper.

    I would say judging by the corporate money 'take aways', evil has prospered quite well.

    IMHO the 'moral hazard' has already been breached with the government's reaction to the financial's market collapse. They certainly did not "feel the ramifications of their decisions" by not following "time-honored, sound fiscal principals (like simply having the money to cover their bad bets?).

    It is interesting to note that there seem to be more objections to the government doling out cash now, when the general public may actually get some of it in the form of labor or housing assistance, than when the majority of the government's largesse was being funneled into private equity.

  • Report this Comment On February 25, 2009, at 7:53 PM, Dart65GTConv wrote:

    Lets just start at the basics. 1+1 =2, 2- 1= 1. Now if a lender needs 2 and can only pay 1 but has the choice to buy a different sufficient item at 1. The conclusion stands that one is the logical pick at this time. I hope congress will read this and try try try to grasp this concept difficult to such a high degree. Then stp blaming greed, rich people our latest derogatory name for undeserving recipients, ok to call people names now ay MR President. And just use some grade school math and stop looking for cheers for nonsence every day. Oh which points me to the education system you all are so proud off. I want your math teachers names please and their pensions returned look at the failures they are as well. Long winded on this one but the point is unarguable. Facts can not be challenged when grade school basic math proves them valid. Should have paid some attention.

  • Report this Comment On February 25, 2009, at 8:28 PM, alinnova wrote:

    I would be interested to know the size of the homes that most unable to make their mortgage payments live in. Why is it that in society today such a need is felt to have a bathroom for everyone in the house? I may sound like Grandfather when I was 10 years old, but I grew up with 4 other siblings and both parents in a 3 bedroom, 1 bath house with very few "frills" and life was good! The "acceptable" standard of living a bit skewed in comarison to the rest of the world, or at least to where we as a country need to be? Reminds me of the old saying, "You're getting a bit too big for your britches!"

  • Report this Comment On February 25, 2009, at 8:47 PM, Bonefish100 wrote:

    Oh, pleeeassse!

    I've worked for government (first), I've worked in the private sector (second) and eventually owned my own business.

    Let's see, what has the government done effectively in the last decade? Hmmmm. Government is a giant sinkhole, run by people who can't run a private enterprise competently, and is interested only in widening their base of power. There is a tremendous amount of waste, and hundreds of programs that should be ended. No amount of intellectual gibberish will convince me otherwise.

    As an example of private industry response to times like this ...and more directly related to the banking crises... I personally know of a group that has created, and is currently capitalizing, a great new financing vehicle for home buyers that is both safe for the lender, the lender's investors and fair to the buyers.

    You keep your socialism...

  • Report this Comment On February 25, 2009, at 9:05 PM, halftide wrote:

    Sorry for this rant I am hurting and really pissed and looking at unwinding 35 years of work building a company of wonderful people. Has any one actually read the COBRA provision in the "stimulous" and considered the implications if the company is now paying 100% of the employees health costs and can disqualift the employee from the company plan by not offering a full weeks work? FICA PAYS 65%. How does that work? COBRA if there is no more Company?

    First, you hit a hot spot with your scatter UHC shot. Before any one should dance the universal health care dance they should understand that Universal Health Care is an Ideological Goal. This means by definition any contrary information will be ignored by the proponents. My Canadian family calls their system government organized euthanasia. They are in health professionals.

    When the Government is concerned about costs it begins to do rationing. That is fine as long as you of a loved one are not the ones who are sick. What happens if you would really like to try the "hail Mary" procedure that might keep you alive? Here you talk to your insurance company and can go through the courts if sufficiently motivated. Try talking to the Government! In Canada they leave.

    The point was made that we are paying TOO much for health care in the US. This is a great argument for what position? It does not follow without discussion of WHY that Universal Healthcare is the answer to the objection. The assertion is there... but it does not logically follow that under Universal Healthcare we would be paying less for better healthcare? I submit more for worse.

    It does follow that under universal health care the Government would be controlling costs. Work with me here business people, costs are variable and fixed. A new piece of equipment is a ______ cost a team of medical professional to run the equipment is a _____ cost. Building a facility is a ______cost. The decision to build a facility is an actuarial analysis the highest efficiency is when the facility is at 100% capacity. Excess capacity is an abomination to a bean counter. If you are arriving in the ambulance excess capacity looks pretty good. When you are working a facility at 100% capacity and there is an emergency there is no slack EVERY one in the queue gets bumped back. SOME OF THEM DIE WAITING! If it is you ..not a good thing! The incremental cost of the additional patient is a VARIABLE cost and low compared to the fixed cost of an additional unit of capacity. GUESS WHO LOOSES!! The incremental cost of someone who dies before getting the procedure is NOTHING. Tough on the individual and family but statistically everyone dies eventually. I do not wish to become a productivity statistic.

    In the United States we have federally funded Medicare and Medicaid. Lets s say you were a Hospital accountant. and 55% of your patients were on a program that only paid 45% of the invoices and the representative of the program established huge additional capital programs with expenses relating to CERTIFICATION that your revenue stream was going to have to pay for....in order to be eligible for the 45% ... It follows that you would be passing on the unfunded portion of the expenses to the other 45 percent of the population. The bills you send out are sensitive more than 1:1 to changes in the cost structure. This becomes even more tightly squeezed When 35 % percent of the balance is insurance companies and 5% is free to those who do not have insurance. Some Canadians come down and pay full pop and are grateful! For someone with a real world analysis of why health costs are so expensive this analysis is general but is no surprise. It would be most helpful then to the issue of health insurance cost if the Government would fund it's existing programs instead of passing it along as a hidden "tax" to those who can pay for insurance and health care. The position that we should by virtue of the cost of health care NOT paid for by the Government ( unfunded) abandon our system for a universal system is a disingenuous argument.

    We really do have pretty much universal health care but you can see and feel the costs . I personally understand that I am paying for the unfunded Medicare and Medicaid, I understand that I am paying for the people who show up at the hospital who can’t pay but when I am ill I bless our system because it has the CAPACITY to respond quickly with first class doctors, nurses and equipment. That is NOT the case where the Government controls the investment decisions and rations treatments.

    Each US state has different insurance actuarial rules and some states by law make the reserves and rules less attractive to insurance companies and the rates reflect the difficulties imposed. It is politically correct to hate the Insurance companies but if you drive them out you can only blame what you did if there is no competition. Go on line for health insurance and type in a different state's zip code and compare rates for essentially the same product. Let me see if I have two houses and four buyers we use the word BUBBLE if we have four houses and two buyers we have bust. If you add a difficult actuarial analysis I can promise the undesirable result. It has nothing to do with universal health care as a better choice!

    Think very, very carefully before you who have the resources to get good health care abandon what we have for a lesser result.

    Secondly Just read Senate LD 900 1999 the repeal of the Glass-Steagall act (and much more) and weep for our country. Look at who brought forward H 35 and 10. and voted for 900 That is why the Republicans have not peeped on this huge problem that we are now facing. That is why they didn’t have a leg to stand on. Shame on both parties. In the real world we are talking about a BAD decision by a group of people whose understanding of how the world works didn't tell them that what they were proposing was a very, very bad idea? Barney Frank didn't have a clue what was happening and he has no lock on the ideology that got us here. They should all have "dangerous" tattooed on their foreheads so in the future they could be identified. There is no party designation or lock on stupidity. Now we have foisted this catastrophe the WORLD and are going to have to pay dearly for this mess. AARGH!

    I want to break something... they should send me to Afghanistan instead of my employees.

  • Report this Comment On February 25, 2009, at 9:16 PM, halftide wrote:

    PS Re health care comparisons I have been in 63 countries and with people in one's charge getting sick and hurt have had the misfortune to by hard lesson compare and contrast.

  • Report this Comment On February 25, 2009, at 9:26 PM, beedriver wrote:

    Subject:

    Making the mortgage bailouts more agreeable for responsible people who did not get in trouble.

    Objective :

    Provide fairness to the responsible people who did not get in over their head in mortgages

    When you bail out mortgages, and reduce the principal , put in a provision in the principal reduction agreement, that when the owners sell the house 1/2 of the profit over what they paid in the reduced principal agreement will go to the government at the time of sale. This provision will help return to the taxpayer what we paid to help them out. If values go back up etc then the public should get some of their wind fall profit from the house sale that was enabled with our money.

    This is very similar to what is being done with the government bailout of banks If things go well we have a piece of the upside.

    Justification:

    If people have their principle reduced and the new loan guaranteed by the government, requiring that if the property was sold and a profit was realized that ½ of the profit was given back to the government, would make those of us that were responsible much happier knowing that part of the taxes we paid to bail that homeowner out were repaid. This provision should also apply if the property is foreclosed and then sold at a profit that some of the money would be repaid to the government. There probably would need to be some thought given to provisions such as perhaps indexing the initial value based on inflation and perhaps have a phase out of the plan starting in 10 years so the requirement to pay money back would go away in 20 years or there is some kind of sunset clause.

    Thanks,

    Bill

  • Report this Comment On February 25, 2009, at 9:44 PM, agaaga wrote:

    Best commentary I have read recently. Capitalism and socialism get out of the way for us middle of the road folks. I am a little tired of the big business folks harping about having to wait to see what the govt is going to do and then complaining about govt involvement. Balance your books and get to work. Or, when one talks about health care where tons of people take no responsibility for their health example smokers, lack of exercise etc they want affordable health care without managing their own health first, But, on the other hand the insurance companies have made it impossible for people to afford premiums and when a person breaks a leg they have minimal coverage or no coverage at all because pre-existing conditions. Who invented insurance anyway, no one can afford the health care that's out there. Number one reason to go bankrupt. The solutions will be found by the party who is able to stand back and say what is in the countries best interests.

  • Report this Comment On February 25, 2009, at 10:04 PM, OneLegged wrote:

    Socialism the 50 cent word of the day. It's an idea not a four letter word. Even the general public has learned the fine art of fear-mongering that was elevated to a new level by the Bushies (the Socialists are coming!!!!!!!!!!!!!!) and is now rearing it's head in the Obama days. The fact of the matter is that we have many social (Socialist) programs and have had for many many years in this country. If the program benefits you you are probably all for it. For example I would like to point out that taxing everyone (even those with no children!!!!!) to fund public schools is a Socialist practice. Taxing those who own no vehicles to fund public roads is a Socialist practice. The list can go on and on. Are you smellin' what I'm steppin' in? Wait...! I think I hear a SOCIALIST in my yard. I GOTTA GO!

  • Report this Comment On February 25, 2009, at 10:08 PM, TMFSelzhanik wrote:

    What country do you all live in? What is this credit crisis that people keep talking about?

    On Friday, I went to the mailbox and in one day's worth of mail, I had a total of $160,000 in new credit being offered to me with a 0% intro rate that I was pre-approved for. I'm not a rich man. My credit rating isn't all that spectacular. $160,000 in one day. That's a lot of money to me. More than my mortgage.

    I go into Fry's Electronics today to make a purchase. I was *hounded* in the aisles of the store by a salesman who wanted me to open a Fry's credit card account. Not to help me find what I was looking to buy, mind you, even though I had an empty basket in hand. I told him no, and that I didn't even have any merchandise to purchase yet. He responded, "Are you sure?" I stood there dumbfounded. And when I went to check out, the cashier would not take the card I handed him before I told him no thank you 3 times to his credit card offer.

    And Matt, think it through before you write about disagreeing with Bernanke. In the end, I'd probably disagree as well, but when your neighbor's financial situation absolutely does effect your own eventually. Here's another relevant story -- Before my trip into Fry's, I stopped into the Circuit City down the street. Just for fun really, as they are really clearing the place out. I ended up buying a UPS that on Amazon is $200, but at CC was $100. At Fry's, they had the exact same model marked down from $200 to $160. They haven't sold many at $160. And they probably won't again until CC finishes clearing out their store. Before CC went bankrupt, I would always choose Amazon or Fry's or Best Buy over CC. Today, Fry's lost potential revenue because their neighbor went bankrupt. Your neighbor's financial situation does have a ripple effect.

  • Report this Comment On February 25, 2009, at 10:34 PM, TMFSelzhanik wrote:

    By the way... with regards to,"Putting an end to the health-care drain on consumers' bank accounts..." Why should you, or anyone else in this country, elected or otherwise, have any say in how much I spend on health care? This is America the last time I checked, and I am free to spend however much I'd like to spend on whatever I'd like to spend it on. If you think it's too much, I'm fine and dandy with that. But you still have no right to stop me from spending that much. Yes, I buy more alergy medicine these days than I used to, and it's quite expensive. Yes, I pay for a gym membership today, while I used to simply ride a bike around campus. But I find that all worth it. Otherwise, I wouldn't spend the money.

    And with that out of the way, I'm amazed at how much cheaper medicines have been getting the past couple of years. My jaw recently dropped when I bought some important medicine for my daughter -- the bill was $5, before insurance kicked in to knock it down to under a buck! And apparently it was good stuff -- it did the job perfectly. She even liked the taste. So apparently the market's complaining about rising health care costs in general is having an cost-reducing effect, without any government subsidies necessary. At least that's what I see.

    So don't go trying to force me to pay less for my health care. There are already plenty of options available to me to pay less. The problem is that I expect that I would receive less. If America wants to reduce their own health care costs, I advise they quit eating so many cheeseburgers. If America wants to reduce mine, please butt out. I'll make those choices on my own, thank you.

  • Report this Comment On February 25, 2009, at 10:46 PM, PALH wrote:

    ``Unfortunately, when you don't slap down the iron glove of government intervention -- I won't call it socialism, though it is what it is -- in every instance it rears its ugly head, it continues to pop back up using its prior issue as a justification for the current one.''

    for future writings, TMFCAP, when you say you're not going to call something socialism and then you say but that's what it is -- you've just called it socialism.

    And, for the record, government interventionism is not in and of itself, socialism. That's a completely bankrupt assertion -- just like Citigroup.

  • Report this Comment On February 25, 2009, at 11:05 PM, Alg0rhythm wrote:

    I'd have to agree.. this is one of the more intelligent columns I have read in a while...I'm a converted fan of the Fool..

    the market needs to do some self correction.. a lot of houses simply aren't worth the money they cost.. McMansions. They're large, under insulated, costly to maintain and literally too much space for a small family pushed to their economic max..

    The land though, is the real value.. we are a nation of 300 million, and growing in a

    (still plentiful)

    but declining amount of land space.

    Every person isn't getting to own huge homes, and vast tracts of land. I'm not saying to kick people out, but don't encourage that behavior.

    Conservation of energy and ergonomics need to become a growth market.

    Against this backdrop, spending government money to keep prices high and people who can't afford big houses in them seems very counterproductive.

    While the stimulus package is one of the best pieces of legislation I have seen in a long time.. this housing bailout seems ill-conceived.

  • Report this Comment On February 25, 2009, at 11:16 PM, Alg0rhythm wrote:

    Half tide:

    I agree with you about health care... we pay way too much.. and hospitals are run by bean counters is a problem...my ex girlfriend, an interning doctor, had to fradulently sign an overtime sheet that said she "only" worked 80 hours. She doesn't work in emergency, but can you imagine, having someone making life or death decisions after 70 hours of work.

    I applaud the President for calling a summit to reform it... the national electronic medical records system will make it possible to make medicine a precise science on a whole other level. Truly deep statistical analysis of conditions and methods

  • Report this Comment On February 25, 2009, at 11:19 PM, Alg0rhythm wrote:

    will spark medical innovation, standardize medical accounting, and make healthcare reform possible. We need to take a look at the whole system, and we are.

  • Report this Comment On February 25, 2009, at 11:57 PM, DavidLeland wrote:

    Today's commentary is much less neocon than prior Foolish words have been, thanks! We are at a crossroads, and must decide whether to continue to allow the banking and finance contingent to dictate which way our economy goes. They act like they're the Masters of the Universe, and that nothing the producers of products, food and actually worthwhile services do is of any consequence. Please review the current state of the markets, and tell me please, would the stock markets in the USA be going down right now, if it weren't for financial guys trying to beat up on Obama's bailout plan? And why would that be, except for the fact that the bankers are not getting their pockets lined and their backs slapped yet again? That's what would have happened if the Reps had stolen the election, but they couldn't bring it off with such a weak team, so we have the Dems, and they're not coddling the criminals, so the bad guys are fighting back. I say, get rid of Citibank and B of A, and ban their management group from financial jobs for 6 years (like the Brits do) and get their banks back open with new owners, let's really solve this problem, and get the stock markets back to reflecting core values of material production and value creation.

  • Report this Comment On February 26, 2009, at 1:42 AM, GUSMAN1 wrote:

    To the topic:I could'nt agree more! Why is it that "the little people" can see the forest for the tree's but the Gov. can't? To say I'm exasperated with all the event's of the past decade would be an understatement! Thank God I can still VOTE! I still can can't I?

  • Report this Comment On February 26, 2009, at 2:31 AM, blockfrom3062 wrote:

    Can you imagine how someone who has worked all his life and lost his job and is now losing his home feels when he constantly reads that he is one of those people that had lived beyond their means and never was really able to afford his home? Do any of the self righteous writers understand that there are a couple of people, just a few, who did not live beyond their means, but through circumstances that they did not create, find themselves in this predicament.

    Would those who are dead set against any kind of stimulus package, toss these people into the fire too. It's easy to be self righteous when you work for a company that hasn't gone under. How about hearing from someone who believed in less government intervention, but who lost his job or possibly his/her career and now finds that they have changed their minds.

    Would all have you have supported Hoover and said Roosevelt was causing great harm?

    Where you stand depends on where you sit!

  • Report this Comment On February 26, 2009, at 4:09 AM, holosys wrote:

    Matt,

    You seem like a reasonable person. Let's look at matters realistically. Obviously each individual homeowner's circumstances are unique, that I think we all would agree. Have we stopped to consider that many homeowners were responsible, by most people's standards, when getting approved for their mortgages years ago? Can we also agree these mortgagees enjoyed that distinction as responsible borrowers for a decade or more?

    Then what changed to make us call these responsible borrowers "less than responsible"? They abruptly lost their jobs and incomes. To the average "Joe" citizen they appear "less responsible"! Branded as such, shall we deem these people as undeserving of Obama's financial salvation package?

    You yourself said in the article, and I quote, "And that's not to mention the fact that the money is going to less responsible borrowers that are now counting on a refinancing to be able to keep their home."

    Isn't it amazing how history has a short memory, Matt? I mean, many "less responsible borrowers that are now counting on a refinancing to be able to keep their homes" are newly crash-minted "deadbeats" (at least deadbeats in the eyes of those who rever those statistically fortunate enough to keep their seat in the job market musical-chairs game) whom, for many years, were responsible borrowers! Their motive was pure in borrowing what they positively knew they could afford, they were approved for that financing, and they spent years making payments. They did exactly what their financial advisors suggested in "leveraging" their home equity, NOT as an "ATM machine" but as an "investment vehicle" for retirement preparation.

    Alas, these responsible borrowers have suddenly, through no fault of their own, earned the dubious distinction as "less than responsible borrowers" simply because they were at the wrong place, at the wrong time. They deserve better, and thank God, someone with the ethnic name of Barack Hussein Obama came along to save their sorry behinds instead of throwing them to the dogs.

    I for one am so thankful the CEO of America is not taking on the impossible task of deciding who deserves a bailout and who does not. That kind of judgment could take years, and Obama recognizes average Americans are humans with economic shelf-lives of several months or less.

    One other thing. By the rarified standards of the economic upper-percentile of Americans, everyone needing help from Obama's stimulas are "less than responsible. Most average wage earning citizens have no business taking out a mortgage, this privileged class figures. Why? Because unless you're making over $100K a year, and purchased your home at the bottom of the price curve (1990's), if you lose your job, then you don't have a prayer in hell of affording mortgage payments for very long. With the escalating cost of living, the American Dream of home ownership is frought with great risk for the majority of citizens who earn under $100K per year. If they don't get back to work in under six months after a layoff, they sink like someone in concrete boots who is pushed overboard in the wide open sea.

    In short, all considered, nobody is deserving of a bailout. Thankfully, Obama values people and believes in giving them a second chance. Other than those who outright lied on their mortgage applications, people should be considered responsible until PROVEN less than responsible (kinda along the guilty until proven innocent value system).

  • Report this Comment On February 26, 2009, at 4:22 AM, Jedermann wrote:

    TRUTHISN'TSTUPID,

    Thanks for pointing out the reality while so many others on this site seem to focus on speculation and misinformation. Yes, some socialized programs such as health care in Canada have problems, but even there, at least everyone has a chance of health care. More importanlty, many "socialist" countries have great health care. I have experienced it. I agree with everything you wrote. We need to learn from the best of both systems and start conceiving of others beyond the narrow confines of this capitalist vs. socialist box we've been in for 200 years.

    I live in Austria. The doctors have time here to get to know their patients. They ask us questions. They don't rush to prescribe as they do in the U.S. - they put their years of education to use. They give us mobile numbers and home numbers when our children are sick. There is never a question of coverage here. Everything is covered. My wife is about to give birth. She gets an ultra sound every month (standard in the US is two per pregnancy) and it's covered. You should see the hospital - it's beautiful. When we leave there is no bill, deductable, etc. I have never been so please with my health care before. Are all these government programs in Austria hurting the economy. Not at all. Look up the lists. Top 5 highest standard of living. Safest city in the world. And so on.

    Also, I lived in Colombia, a capitalist nations with national healthcare. The health care I received there was superior to what I had in the US and I had as good a plan as a wealthy man's money can buy. Our doctors called us at home to check on us. People, do you hear that - the health care is better in COLOMBIA. That's a reality.

    I'm not a capitalist, nor a socialist. I simply believe in ideas that lead to the best outcome. Blind allegiance one philosophy is no less fool hard than blind trust in the other.

  • Report this Comment On February 26, 2009, at 9:00 AM, Guthree wrote:

    Great commentary.

    Why oh why don't we have more issue discussion like this and less of the childish foodfights?

  • Report this Comment On February 26, 2009, at 9:01 AM, jackspratnofat wrote:

    I would think, That if the Federial Goverment, did "just" what they were allowed in the Constitution, we would not be even talking about this. The Problem (IS) the Federial Goverment getting into ALL of the thing's (THEY) again were NOT to do in the First Place. Give ME back my goverment! You can take your Social Communism, your Democracy, you Liberalism, and give me BACK my (Republic)! And to HELL with all of the REST of you!

  • Report this Comment On February 26, 2009, at 9:29 AM, pberardi wrote:

    I agreed with everything you said that is until you made the contradictory comment that government should help create jobs. Essentially you said that capitalistic ideology should prevail when it comes to individual homeowners and the same for corporate welfare and bailouts. I agree. But we should accept some hybrid sociocapitalism when it comes to jobs?

    Maybe you can pick and choose where socialism should previal in our economy but I can't. The same sound reason you chose capitalism for homeowners should prevail when it comes to job creation.

    Lesson for you sir: The government does not create jobs! It taxes and borrows capital from the private sector and allocates that capital to programs such as alternative energy and government run healthcare.

    That leaves less private capital for innovation and wealth creation. Talk about distorting the market! Pricing, the laws of supply and demand, ROI modeling generates what capitalists call effeciency and productivity.

    I have no more conficence in the governments ability to create jobs than I do in its ability to generate wealth.

    Please don't confuse job creation with wealth creation. An economy that produces an abundance of make work jobs such as toll collecting might have low unemployment but it sure as heck wont create the standard of living that a MIcrosoft or Pfizer can create with their job creation.

    I refuse to create jobs for the sake of it which seems to be the policy of this administration.

  • Report this Comment On February 26, 2009, at 9:33 AM, howboutme wrote:

    Its funny when some of you jump down the throats of those who don't feel they should bail out others for their irresponsible spending and hour to hour living of life. If your so religiously tied to that idea that all people should help the ones that are not responsible for their own life then why don't you throw a couple hundred dollars extra into your taxes this year. Think of it as going to church and putting money in the basket, its for a good cause. BUT do you do it, NO, you talk about, complain about it, but you certainly wouldn't volunteer to do it until your forced to.....and then you will complain about it somemore, saying "everyone else has to do it to or I am not going to".

    Your kind are all alike, your very generous with every else's money, but you wouldn't do it yourself until death do you part. The revolution is coming, that you can be sure of. IT is not right to continuely screw over the responsible for the ir-responsible.

    But alas, Socialism is rooted into this society. It cannot be removed until the left wing bias of a media is taken out. For it is what people watch on TV that reflects the majority of what people feel....after all, if all you see is one side, after awhile that is all you grow to know. The media should be converted to a robotic society, then only the facts would be reported, not the delicate feelings of the reporter on the screen. Editing should be a task removed from society.

  • Report this Comment On February 26, 2009, at 9:45 AM, ReillyDiefenbach wrote:

    You couldn't have expressed it better, Jack!

    Now, for a slightly more coherent repub viewpoint I give you

    David Brooks on Bobby Jindal's rebuttal:

    "The idea that government is going to have no role in this...in a moment where only the Federal government is big enough to do stuff...to just ignore all that and say government's the problem...corruption, earmarks, wasteful spending - it's just a form of nihilism. It's just not where the country is, it's not where the future of the country is. There's an intra-Republican debate: some people say the Republican party lost its way because it got too moderate, some people say they got too weird or too conservative. He thinks they got too moderate, and he's making that case. I think it's insane. I think it's a disaster for the party. I just think it's unfortunate right now."

  • Report this Comment On February 26, 2009, at 9:47 AM, ReillyDiefenbach wrote:

    "Editing should be a task removed from society."

    Damn, what am I going to do with all these blue pencils?

  • Report this Comment On February 26, 2009, at 9:59 AM, shortfingyres wrote:

    There seems to be a point that are being ignored here. When the government injects money into the marketplace, it distorts the forces that govern value. Supporting a housing market that has been inflated by to much demand, created by government policy promoting market entrants who are not economically ready for home ownership simply prolongs an agony that WILL eventually correct itself. This creates a disequilibrium that leaves everyone in the dark as to the true direction a particular market is going. Thus the current chaos in the housing market. By artificially supporting unsustainable values, the marketplace is prevented from properly allowing itself to align with realistic demand. This applies to every area. One of the reasons health care is so expensive is that there is a ready source of money, the government. Health care providers have not been constrained by the need to fit within a budget because there is always a ready source of additional revenue.

    Education costs have grown at ten times the rate of the increase in fuel costs. This is because the government has artificially supported the rising cost of education, coupled with the government monopoly in primary and secondary education.

    Until we regain the correct vision of government's role, our economy will be subjected to unnatural forces that will always result in delaying the healing and intensifying the downturn.

    Unfortunately there is no combination of good answers from the right and the left. The best answer is to remove political considerations entirely.

  • Report this Comment On February 26, 2009, at 10:01 AM, ziq wrote:

    It doesn't sound to me as if you disagree very much with the Obama administration.

    "If my neighbor defaults, my house doesn't go up in flames, the construction will be just as sound as it ever was, and I'll continue to be able to live comfortably in it."

    Yes, but your stock portfolio stays in the flusher. The analogy wasn't perfect, but you're deliberately ignoring the point of it. A bad economy hurts us all.

  • Report this Comment On February 26, 2009, at 10:15 AM, ReillyDiefenbach wrote:

    "the health care is better in COLOMBIA. That's a reality."

    It's better in every single industrialized country in the world. There is no such thing as a "medical bankruptcy" in France.

    Isn't it just an absolute trainwreck when Randian doctrine confronts measurable accomplished fact?

  • Report this Comment On February 26, 2009, at 10:29 AM, rolls20 wrote:

    Before I read everyone elses Foolishness, I'm going to state my own initial opinion and then go back and re-read the other posts.

    It is my opinion that there are valid points on both sides of the ball here. Yes, the government should help out Joe Worker. Yes, Joe Worker's hand should be slapped every once in a while.

    Joe Worker should get some help if he/she is failing and/or defaulting on their mortgage. But, receiving help should be put under the condition of whether or not they've lost their job. Not sure what that help should be, whether it's refinancing the original loan or refinancing at the current market value of their home, or something else. After all, it isn't (completely) their fault that the banking industry is tanking and creating mass panic throughout industries, causing layoffs and firings.

    Joe Worker shouldn't get some help if they have still have their job, or taken a paycut to remain at their job. They know their spending limits, and if buying a home is out of their spending limits they shouldn't have bought so much home. If they took a paycut, they know how much their monthly expenses are, and shouldn't have taken the cut.

    Further, I have to lump the government into the bad group. Our politicians are setting a bad example for the citizens by trying to get things going by adding debt to private companies that started this whole mess in the first place by not following stricter lending guidelines and letting Joe Worker bite off more than they could chew.

    (flame away)

  • Report this Comment On February 26, 2009, at 10:40 AM, pacella wrote:

    I get so tired of people who put the blame on the home owner The only function of a lender is to make good loans using other people's money. They can ask to see your pay stub,your tax forms,your credit card debt,your bank statement,where you got the down payment and any other question they can think of, then they can ask you to sign a waiver so that they can verify all you have said. If a bad loan is made it is always the fault of the lender. These people were encouraged to make bad loans which they could then dump off to others, and then do it again. PLEASE down call them smart people, any fool can see the stupidity of such behavior

  • Report this Comment On February 26, 2009, at 10:57 AM, cheeryjuice wrote:

    It is a mystery to me how someone who has made no downpayment, has made monthly payments less than a reasopnable rent, and has put no money into improvements or betterments of a dwelling can be deemed to be a "homeowner." It seems most reasonable that we should look at all such persons who got into their current home within the last three years and then put them back into the position they were in before the start of their home "ownership." If this means that we should give them back their down payment, then let's do it. This will be cheaper in the long run and strikes me as more than fair. As a quid pro quo, they would have to give their lender a deed in lieu of foreclosure and vacate the premises.

  • Report this Comment On February 26, 2009, at 11:50 AM, Epiphany11 wrote:

    If the irreponsible borrowers get a bailout, then when they sell their homes in the future, they should have to pay the government back in a special fund that helps to resimburse for these bailouts. As a middle class, single homeowner who has struggled for years paying my own way - these bailouts are a total slap in the face. I not only have to bail out the DEADBEATS, I also have to bailout the RICH. I'm thinking of selling the home I've owned for 17 years, taking the profit and buying 3 cheap foreclosures and living off the rent money. It doesn't pay in America to work hard, be responsible and play by the rules.

  • Report this Comment On February 26, 2009, at 11:53 AM, agaaga wrote:

    Not a comment a sincere question:

    Looking at the very new plans to health care proposal that came out today, and this may seem like a very elementary question but if taxes are increased to provide for universal health care, will then that money be used to pay into a universal program? ie like one big Blue Cross/Blue Shield? Then, whatever our employee had been setting aside to pay for employee health insurance programs would be seen in our paycheck to offset the new tax?? Is it too early to ask, does anyone know the answer?

  • Report this Comment On February 26, 2009, at 12:38 PM, vidkunquisling wrote:

    The example of the government creating jobs by funding a solar cell manufacturer was particularly ill-chosen. If you are too young to recall Synfuels. I suggest you read up on it as well as the current ethanol fiasco. There are several things you can be certain of when the government picks winners and losers in energy for massive federal subsidies: the process will be governed by political pull, not the economic or technological merits; the funds will be applied in a wasteful manner incorporating all kinds of non-business agendas; and there will be lots of unintended consequences. There's a reason you don't see much alternative energy: it doesn't make much sense from a market perspective at this time. Providing some seed money for research at universities or helping with basic infrastructure like power lines is one thing; industrial policy, i.e., picking the winners and losers, which last raised its head under Mondale or Dukakis as best I recall, is another.

  • Report this Comment On February 26, 2009, at 1:07 PM, BarsandStars wrote:

    Dear Fellow Americans...So must we just be tolerant of welfare for the rich (Republicans)? Trillions of dollars to save their ignorant financial decisions and the greed of their banker friends. Why bail out G.W. Bush's friends when they are the responsible greedy, thieving s.o.b.'s who got us in this mess in the first place?

    If you are a "real" free marketer and believe in Adam Smith's invisible hand, well then let the chips fall where they may, no matter who ends up in the soup lines.

    If not well then consider that since we are part of a consumer economy, then it follows that the consumer must lead the way to recovery by spending our way out of this mess. Let the consumer's demand for products and services lead the charge to recovery by jump starting the manufacturing lines and service providers. How you ask? Well instead of throwing trillions of dollars at the banks and automobile companies to continue with their stealing us blind, why not take an equal amount of money, say three trillion dollars or so, and let that sum be increased by velocity and the changing of dollars from one hand to another via consumer spending on say cars, homes, clothes, tvs, cds, vacations, getting their mortgate current, college tuition and books, etc..

    I propose that this three trillion dollars or so be deposited in the bank accounts or given in cash proceeds at their local banks so that the receipients of this government bailout money, which should be limited only to all of those Americans, any age, religion, color, gender, etc. that had either no income in the last year, or reported income of say $50,000 dollars or less. Yup, you heard me right!

    What will happen you might ask? Well they sure are not going to invest it in the stock market, that's for sure. Chances are most of then, especially the poorest of them will spend every last penny. They will buy cars, bring their home payments up to date, buy food, clothes, shoes, etc. all of those consumer goods that are sitting on the shelves. When those inventories are depleted, well guess what? The factories will start to crank up, how? Well they will have to buy raw materials, etc. and YES! they will have to employ new workers, millions of new workers, yes, jobs, real jobs! No more 10% unemployment rates! Isn't that what we want, what we are trying to accomplish?

    Why haven't any of the Presiden'ts economic advisers told him that is how a CONSUMER MARKET - ECONOMY works? Jeez, and to think that I spend my time driving a taxi cab in Mexico...I should be the President of the Fed or of the Economic Advisors, or at least a high paid Consultant.

    Really, it's not that difficult if you just consider the idiotic suggestion for a second....

    Well that's it, I just had to get it out in the open and pray that all you Americans are not so stupid that you won't understand the plan. I pray not, and you can send my commission on the increased economic growth to my bank in Mejico....

  • Report this Comment On February 26, 2009, at 2:12 PM, ReillyDiefenbach wrote:

    Comment of the thread, B&S!

  • Report this Comment On February 26, 2009, at 2:30 PM, Alg0rhythm wrote:

    Yeah, bank bailouts is bad business... more like so big they have to fail.. too few people managing too much money, and directing a large percentage into their own pockets. So far 700 Billion allocated in direct funds to banks, to go along with trillions lent out by the Reserve, and 787 Billion in stimulus to the people plus that housing bill to the people, but really to the banks.

    Normally 700 billion by itself is more than the difference between an economic recession and an economic boom.

  • Report this Comment On February 26, 2009, at 2:35 PM, Alg0rhythm wrote:

    Didn't fully read your comment Bartrand Stars... that would immediately end the recession, and spur new growth.... but it would be too abrupt of a change.... think of what happens to lottery winners, or Dave Chappelles what happens if blacks got reparations. Samething, but for everybody. The changes have to be responsible... I want transparency.

  • Report this Comment On February 26, 2009, at 3:17 PM, halftide wrote:

    I think that the real benefit of the internet is that distance no longer separates creativity into regional pockets. If there is a problem identified then the source of the analysis and input is not bound by distance or some artificial limitation, just the creativity of the brain pool. The Japanese have a saying “No one of us can be smarter than all of us.” The Japanese process can be excruciatingly drawn out and is not appropriate in all circumstances but the interaction on the internet reminds me of this process.

    A linking of minds for problem solving hopefully resulting in enlightened consensus and appropriate actions with good results. The first stage is to identify that a situation exists which invites examination. The second step is to agree by consensus on what is being examined. Define what it is.” Walk” all the way around it and see it from every perspective. Know it. The next step is to decide what a solution would look like and finally start comparing potential decisions to the result of the optimum solution. The stock market performance on the whole appears to be a statistical analysis of the group opinion.

    A solution, short of war and genocide, is not really elegant if it doesn’t match the whole complexity of the problem and return an optimal overall, full perspective result. If I impose my solution on your problem it may solve my immediate issue but in the long run by not taking a few steps in your shoes I have just created a friction and residual problem that won’t go away.

    We are discussing a fundamental problem that we are trying to fix at the wrong level? The problems we are seeing are the correlation to poor decisions that were made previously. Bad results define bad decisions. We have to regress and have an intellectual dissection of the model we used to justify the bad decisions. The thinking at the time didn’t predict the poor results; it is therefore dangerous and needs to be corrected. It must have been politically correct but from a rigorous stand point we have learned that the action taken was an error.

    There is no point arguing about anything in a higher sense unless we can agree on the core fundamental goals and have those goals as a perspective to ground the discussions when the discussions become hypothetical and we are lost.

    We seem to have lost track of a clear understanding of what cities are supposed to DO. Cities are supposed to be the center of commerce and wealth generation not slums, poverty and generation spanning misery.

    We seem to have lost track of what the role of individual and group production is in the larger picture of how civilized society functions.

    We seem to have lost track of what an optimal government’s goals should be.

    We seem to have lost track of our moral compass and personal responsibility to the community whose structure and frame work allows us to be productive and seek the best quality of life.

    There are two sayings “Having lost sight of our goals we redoubled our efforts.” and “Exploring means never having to admit you are lost.” These describe the situation I see.

    How can we have an intellectual investigation into means unless we have a test for success so that when we “see it” we will know it.

    The founding fathers of this country boiled down what they expected to “Life liberty and the pursuit of happiness.”We need to rediscover a similar touch stone, the simplest words on what the most basic expectation of “government” is and having some consensus then build complexity on that premise. When things get so complex that we think that we are lost we can go back to the premise and use the core principal to guide us.

    I propose a very simple sentence: “The appropriate role of government is to have a wealthy government and a wealthy population.” The reason I propose this as a “truth” because governments consume and populations produce. Governments without a productive population do not have the equity base to fund themselves and therefore the social programs that give them legitimacy.

    Whatever becomes the base of "our" consensus must be devoid of party partisanship. Parties can and should fight for the best route to the common goal and get tested for objective results. Today I don’t know what political parties stand for or intend to achieve and how they judge the appropriateness or success of what they are proposing.

    I use the simple filter that I proposed, everywhere around me I see decisions being made that through my understanding of cause and effect will result in impoverishing the population and diminishing the economic strength of the government. My personal model says that these actions are not good decisions and are not going to give the optimum result by the fundamental test of success I proposed.

  • Report this Comment On February 26, 2009, at 4:36 PM, BothellWAFool wrote:

    Well, it should have disclosed that Matt Koppenheffer is invested in Bank of America. Well most people think that B of A and Citi should be allowed to fail. He takes an anti-middle class stature that all homeowners that bought in recent years are bad. After all, it's our fault if our homes go down in value and we are laid off? B of A can take our home and my brothers in SoCal as well if we have an extended job loss. We are ready to walk away. We have second mortgages but are responsible borrowers. Too bad a home bought in 2003 and 2005re underwater... As for me, I'm ready to move to Canada, for jobs and health insurance. You see, my wife is Canadian.

  • Report this Comment On February 26, 2009, at 5:29 PM, wuff3t wrote:

    BarsandStars,

    "Why haven't any of the Presiden'ts economic advisers told him that is how a CONSUMER MARKET - ECONOMY works?"

    Good question - but you answered it yourself in your first sentence: "So must we just be tolerant of welfare for the rich (Republicans)?"

    Essentially, yes. Government isn't designed to provide a fair system for all - it never was. It was designed to ensure that the wealthy remain so, and screw everybody who isn't already part of that club. The rich don't want to put money into the pockets of the consumer, just in case it gets redistributed in such a way that it doesn't come back to them. They'd rather just bypass the middle person (you and me) and put it straight back into their own pockets.

    People who get angry when they hear the word "socialism" are being distracted by semantics. "Socialism" really just means "government intervention". And as you point out we already have plenty of that, but only on behalf of the rich.

    If anyone disagrees with my point about government's real purpose I'd ask you this: why is there a word for redistribution of wealth towards the poor (socialism) but no word for bailing out the rich? Could it be that we're just not supposed to notice the rich being helped out? That we have systems designed to ensure this happens beneath the covers so no-one can object? But that whenever anyone demands that the less well-off be given assistance we can label it "socialism" and thus give it a name and demonise it?

    To clarify, I believe in the free market. I would love to see a truly free market at work. I disagree with bailing out homeowners who never could afford their homes. Just as I disagree with bailing out companies that aren't commercially viable.

    But we've never (or at least not for a very long time) had a free market. The world's developed markets have been manipulated in favour of the rich for a very long time. And we have been sold the lie that there is a genuinely free market and that to even contemplate trying to provide a system that seems to punish the rich for failure and help the poor when they've been screwed is somehow a betrayal of a truly free state. It isn't - any more than a system that bails out the rich is.

    Either help everyone out, or help no-one. But we need to move away from the rhetoric that "socialism is evil". It's simply another word for government intervention, and the rich get plenty of that already.

  • Report this Comment On February 26, 2009, at 5:33 PM, shortfingyres wrote:

    Just got to B &S's comment. Biggest problem, why limit it to under $50,000.00 income. That is still redistribution of wealth. Lets really let the market operate and give it evenly to everyone. Sure some of it will get saved (shudder.... what a responsible idea) allowing banks to lend and put more money into the stream of commerce thereby multiplying the beneficial effect. Gosh some of the money might actually end up in the hands of small business entrepreneurs who will create more jobs.

  • Report this Comment On February 26, 2009, at 7:58 PM, nin4086 wrote:

    Without getting into the senseless discussion on "socialism" vs "capitalism", I would like to point out that the so called "free market economy" has a fatal flaw known as "externality": while acting to further their selfish interests, the decision makers ignore factors that are not of direct consequence to them. For example, they pollute the environment because they do not have to bear any consequences. It is the job of the government to watch out for these "externalities" and pass laws and regulations to internalize them. The "invisible hand" cannot do this.

    [The resulting system can be called "capitalism" or "socialism" or "social capitalism" or anything...it is not the name that matters, it is the details that do and they cannot be summed up in one word.]

    I agree with TMFCop on job creation. There is no growth without "value creation". It doesn't matter whether it is the government or a corporation that funds it; what matters is that there is real value creation and that these jobs contribute to it. Any plan that does not ultimately create value is just "economic masturbation"; it might feel good, but nothing gets done!

  • Report this Comment On February 26, 2009, at 11:43 PM, n4wdx wrote:

    "Those Who Sacrifice Liberty For Security Deserve Neither." Benjamin Franklin

  • Report this Comment On February 27, 2009, at 10:18 AM, Alg0rhythm wrote:

    Half time I like the first part of what you said about

    defining what government is supposed to do.

    Confucius said the first thing he would correct in a troubled government is definitions.

    To me, a government is

    1.managed services for the people, builds roads, schools infrastructure, provides security, from external dynamics, and rapid response to changing conditions

    2 Holds forums to discuss the set of principles that governs the way we live and work, and make adjustments that make sense.

  • Report this Comment On February 27, 2009, at 11:07 AM, McCrikey wrote:

    I'm not worried about socialism either. I'm worried about national socialism, i.e. fascism.

    National socialism is defined by nominal private ownership and government control of major industries and that's exactly what we're doing with the banks.

    The next Hitler or Mussolini is who we have to worry about not the next Stalin or Mao.

  • Report this Comment On February 27, 2009, at 7:58 PM, PauvrePapillon wrote:

    Another great lie of the Democrats and Obamarxists is that they are pragmatists and not ideologues. If there were even a grain of truth to this, the Fibpotus would take a look at the market reaction to his candidacy, his policies and his presidency. At every turn the markets have said, no confidence, that’s not going to work, try something else.

    Check your dates. From 6 May 2008 (when the Fibpotus took the permanent lead in delegates for the Democratic presidential nomination) to 20 November 2008, the market lost 42 percent of its value. Slowly at first and then picking up steam as the reality of a Marxist in the White House become more and more likely, then inevitable and finally a fact.

    The markets have added to those losses as the Fibpotus has advanced his Marxist agenda with the passage of the Trillion-Dollar Wealth Redistribution and Political Payoff Act and the Aid For Irresponsible Real Estate Speculators Act. Now comes a budget proposal which economist Larry Kudlow describes (accurately) as “a declaration of war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture capital funds.”

    http://www.cnbc.com/id/29434104

    Is Dr. Kudlow right? A pragmatist would look at the market reaction and conclude, absolutely. The narcissistic and delusion Fibpotus, still working out self-worth issues resultant from both of his parents having abandoned him during childhood, is no pragmatist. To the contrary, he’s wedded to the Marxist ideology of the college professors, black nationalists and domestic terrorists who took him in and gave him a sense of family and identity. All evidence to the contrary notwithstanding, he will continue to believe he is sharper than all of the rest of world even as he destroys markets, companies and the retirement plans of millions.

    Based on results, specifically, the loss of $7 trillion dollars (and counting) of equity in the U.S. stock market which has occurred in direct response to first the prospect and then the reality of a Marxist occupant of the White House, the Fibpotus is already, far and away, the worst president in U.S. history.

    Congratulations Jimmy Carter, you're now off the hook!

    “I call upon all responsible, productive people to work hard and sacrifice so that we can redistribute their incomes to those who will never be able to find a decent job because they refuse to buy into bourgeois middle class values like staying in school or learning a trade or finding a husband before starting a family but are, nevertheless, the Ones We Have Been Waiting For because they will get on a bus and go vote for me whenever and wherever I need to send them.”

    His Most Beloved and Exalted Excellency Barack Hussein Obama, the Fibpotus

  • Report this Comment On February 28, 2009, at 5:32 AM, maverickq wrote:

    Sorry, but i must say the the cnbc inhaling crowd the fact is the market failed on this one and "get over it". {The market is never wrong...lol...the market has been wrong for YEARS. And - read Buffet or J. Grant - the market can stay wrong for a long time...as we are now discovering}. Obama has not "destroyed the retirement plans"of anyone...wake up and smell your Dec 2008 investment statements...that was done long before he assumed office. The issues being deal with now are the ones analysts (and many of those posting here) should have been screaming high heck about over the last 10 years. But no ...most were sheeps loving the unhealthy rise of everything with a mkt cap... every idiot with an investment fund / every stupid investment idea floated in the last few years 'gained value' leading to crazy ponzi's, crazier "book it and count your bonus and don't worry about the pending social / human / organisational cost when the stupidity of your actions comes home to roost (as you'll be looooong gone" cultures.

    "The middle class has been perfect, its the poor people's fault" drama that i see expressed in some of the posts is really just well...tired. There is enough of the whole mess to share around... including rich and very rich people who stuffed their faces and were so desperately wedded to the "more and more and more for me" way of thinking they refused to say no to crazy levels of leverage, to exercise integrity/leadership over relationship / greed, and to have just a little balance (have you seen some of those pay packages... which mere moral honestly ever could justify claiming to contribute that much to an organisation!!! .... except maybe if you're hiring).

    I worked at Citigroup up to a few years ago...jeez....Citibank was a thing of beauty (Citibankers loved their Citibank). It had a clear & well balanced culture, lots of smart but 'common sense' energy. But no, we had to "merge" with Sandy and his rat pack. Sandy, Rubin, et al are who you should be very angry at (John less so...but dude caught the ego-mania merger fever and so he can't escape blame totally). Those guys and their like have fed on and abused and mis-governed and brought to ruin the US financial system and by extension the economy... all while earning vulgar levels of compensation. Trust me, they deserve a lot more credit for their role than many of you are giving them.

    So here we are. What does a government do when faced with this mess (lord knows i don't envy them). Yes some of us were smart (some just lucky) and we kept our selves out of harm's way. I agree that many have been irresponsible and I would really like to not have to be affected by their stupidity; however some people have not been irresponsible they have just been caught in a really bad situation and they need help. The government has to step in (the pros and cons of their approach shall be debated for decades but i think but i personally won't be looking to bull market Santelli for in-depth reasoned analysis...but i congratulate him on his 5 minutes of fame). In the end though I am certain the invisible hand needs a constant visible foot to kick it in the hind parts when it starts touching things it shouldn't. (I need to re-read my Adam Smith but i think i recall even he was of the view that the invisible hand needed some "constraints" for want of a better word).

    And oh...health care. I didn't give 2 hoots about the topic up until recently..i didn't see what all the fuss was about (let them eat cake would have been my response up to early 2007). Recently i'm beginning to understand what it can do to the average person in a flash because of health costs i have seen linked to close / aging relatives. Those bills will knock you back a few paces...and I earn decent money so i can't imagine how some survive such eventualities. (Should i care how 'others' deal with affording a basis decent level of health...I think so....I dare to think thats what helps deifne me as human versus mere mammal).

    Why all the anger at help that looks "main street" directed versus the earlier assistance that was more "wall street" directed? I can't understand that...that is very interesting to me.

    A comment on FI regulation: I work in the fin indsutry and trust me, banks / investment advisors need to be regulated...and regulated by very clear, strong, confident regulators. No one goes "I'll make a zillion dollars if i'm bad and go to heaven if i'm good...yep, good it is".

    Govt assistance or no govt assistance, there are deals out there for those of us with cash / good credit. Happy bargain hunting!

  • Report this Comment On February 28, 2009, at 5:53 PM, Seano67 wrote:

    "I'm not worried about socialism either. I'm worried about national socialism, i.e. fascism.

    National socialism is defined by nominal private ownership and government control of major industries and that's exactly what we're doing with the banks.

    The next Hitler or Mussolini is who we have to worry about not the next Stalin or Mao."

    Bingo. That's the first thought that popped into my head when I read the headline, and once again it's instructive to look at history, because all of these things have happened before.

    In times of extreme economic stress, duress, distress and disruption such as times like these- when people are feeling frightened, uncertain and lost, that provides the perfect breeding ground for the rise of authoritarian regimes.

    You look back at the rise of totalitarianism in the 20th century, and all of that had its genesis in the global Great Depression beginning in the 1920's, and the massive disruption and fear that caused people around the globe. Fascism spread like wildfire across Europe, there were strong Fascistic parties in every European country, and they actually reached total ascendance and the pinnacle of power in Franco's Spain, Mussolini's Italy, Hitler's Germany, and Hirohito's Japan (though while not *technically* Fascist, was certainly a great model of an utter authoritarian and totalitarian regime).

    Each case was different, but the common denominator was that the Fascists promised answers to the economic crises of the time. They promised to put people to work, and they also promised harsh and swift action against the Reds, which was the terrible fear of the time among the ruling classes and wealthy elite as well as the pissed-off and disaffected right-wing commoners. .

    Italy: led by an ancient and senile King Victor Emmanuel, a nation wracked by doubts and absolutely torn by its struggle to enter the modern age and end its feudal system of land ownership and rigid class system which had persisted basically unchanged since the Middle Ages. The Communists were finding great success recruiting amongst the impoverished peasants working the fields, while the land owners and wealthy businessmen serving as their overlords universally looked to Fascism to preserve that established social order and suppress the whirlwind of change they knew was coming. And hence the rise of Il Duce, Benito Mussolini.

    Germany, led by the beloved war hero Field Marshal Paul von Hindenburg, who was a good man and an unquestionable patriot, but who by that point was old and enfeebled, in poor health and slipping into and out of lucidity. And then you've got a nation literally simmering with rage and resentment over the grotesquely unfair restrictions which the Treaty of Versailles had placed upon them, as well as the hatred and resentment of the ineffectual Weimar Republic, the democratic government which had also been forced and imposed upon them by the victorious Allied powers after World War I. So it was a sick, weakened, headless country with a decentralized government which seemed effectively powerless to rule over Germany, and in fact in many German states there was a near complete state of anarchy and mayhem, with Communist and socialist parties growing by leaps and bounds and of course fighting fiercely against those of a Fascistic or nationalistic bent. Given that kind of scenario, the rise of an Adolf Hitler seemed an inevitability, and you could not possibly create a better petri dish in which to promote the rise of Fascism.

    Hell, we even had a multitude of Fascist and pro-Nazi parties here in the States at that time, and we had it *nowhere* near as bad as the Europeans did so far as economic woes went. But that global economic weakness went hand in hand and was an essential ingredient in the rise of and wish for totalitarian solutions across the globe.

  • Report this Comment On February 28, 2009, at 9:23 PM, Cableman09 wrote:

    I think the major point that nobody seems to understand is this:

    The mortgage industry made their choices and decisions with full knowledge of the outcome at some point in time. They just didn't care because they would not be holding the bag.

    Can anyone say Fractional Reserve Banking??? This is the real problem .... for every loan they made of real deposits they created 10 times that in money from thin air.

    The bottom line is that capitalisim is a debt based system that needs constant new blood. Back in 2005 Bush changed bankruptcy laws for the financial industry so they could pull this whole thing off. Without bankruptcy and new blood the whole house of cards comes crashing down. Just wait the worst is still to come and some of you smug SOB's will be part of the 15-17 percent more to lose their jobs.

  • Report this Comment On March 01, 2009, at 10:00 AM, capturedby wrote:

    To all you RESPONSIBLE people. WOW- great ideas on the reasons for the current situation - missing ONE thing. WHO did you RESPONSIBLE people think you were selling, fixing, building,collecting overtime, bonuses, great commissions, making, plumbing, windfall, record salaries, etc.. FOR????? Other RESPONSIBLE people like yourselves???? Oh- I don't think so.... All the while. you were saving, (love this one-this is the one my Father use to say), "LIVE WITHIN YOUR MEANS" - Oh by the way, He died never having 1/16th of what he wanted, deserved for his hard work, should have had. Before you get caught up on (like conservative Radio Hosts) single words to rocket off on - Yes, I believe in hard work for STUFF (apparently this includes your HOME-Stuff I mean) and being RESPONSIBLE for your bills. I have a great deal of trouble with the RESPONSIBLE people that I view as jealous, disgrunted, lacking in backbone, angry that the neighbor took a vacation that was "nicer" than you did, newer car, ATV's - you know, that STUFF you RESPONSIBLE people had banner years selling, fixing, serving food to, etc.... GET THE PICTURE!

    Anyone here want to know "WHY" millions - Yes MILLIONS of Americans have subprime loans - because MILLIONS don't fit in the neat little box that the OLD Banks used to GRANT (who's money is it?) You know WHY Banks call it SUBPRIME - because it gives a nice name to loans that MILLIONS of Americans could never get even close to talking about a mortgage - doesn't that strike any of you RESPONSIBLE people as odd - No of course not, you played by the RULES - You know, the RULES that allow our freindly neighborhood Banks (or Global) to borrow OUR money at 2% (or less) and LEND it back to US at 8.75% - Oh, NOT ENOUGH, then let's have resets to 11.75% after the hoops, jumps, bull@#*@ fees, (love this) CLOSING COSTS, TAX TRANSFER Stamp, anymore you can think of - different name for THEFT. Once again, Please before you launch on something incredibly stupid like, "You should not have agreed to those terms" - NO CHOICE. We, the IRRESPONSIBLE people that for 8 years+ paid the outrageous payments, bought STUFF, (you know, the stuff you RESPONSIBLE people make,fix,sell,allow you the money to save, etc) and enjoyed the MANY prosperous years under your new "DEVIL" anyone Republican target. And now the NEW NEW "DEVIL" anyone that recognizes that the REAL average Joe (funny, that is my Fathers name) has been screwed, left out, prohibited from the home market, and finally totally screwed by the Banks on the most important purchase - your home.

    Do you really believe that faceless entities like CREDIT BUREAUS have ever, where ever designed to help you, keep it fair, ( that's right, LIFES NOT FAIR - WHAT?????)

    actually work for the people.

    Who are you people?? Capitalist's that have succeeded by selling, making, fixing, etc for WHO??

    Get off your RESPONSIBLE high horse and look around - these people are your neighbors, schoolmates, teachers, tradesman, family. Your not paying for anything that you haven't already been paying. The same people get all the benefits and the working class get the shaft, meaning the MILLIONS of Americans that finally FINALLY could get a home, but have to agree to outrageous terms.

    Why don't you insist that homeowners get loans that are fair - you know, Banks get the money for 2% (or less) and call people that DON'T NEED THE MONEY. They ever call you and say, Hey, Why don't you come down to the Bank and get a HOME LOAN for a % you can afford.

    Save the neighborhood, your neighbors - STOP THE MADNESS.

    These are not Market Corrections, Poor Performing Loans, Bad Investments - These are PEOPLE, CHILDREN - you Capitalist midgets.

    Take all your savings you got from the "good" years - you remember, the years right before someone, something said - your home is worth much less - than you OWE. Look at your neighbor in that big house with the Pool (the one YOUR RESPONSIBLE company sold, paid commission, provided work for install people, etc.). (like the one you RESPONSIBLE people DON'T have)

    and go on a GREAT Vacation - Try living.

    This is MONEY - NOT PEOPLE!!!

    I have never seen so many examples of self-rightous people, envious comes to mind, spew about how wonderful they are for "playing by the rules" - question the RULES you (again) Capitalist midgets.

    All subprimes should be FIXED at 5%, NO RESETS,

    Write-Down the amount to equal the value of the home (sorry, write downs are only for business and the ultra rich-not you Joe) Oh No- the Banks and Investors will only get a half a gazillion - not the whole gazillion - Are you RESPONSIBLE people on crack?????

    Don't tax the wealthy - that would ruin the incentive to become wealthy. - Are you RESPONSIBLE people on crack??? They can afford it, they should pay more - THEY HAVE MORE!!!!!

    Get real - SAVE PEOPLE, instead of ( oh this will hurt you RESPONSIBLE people) Money!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • Report this Comment On March 01, 2009, at 8:16 PM, rdlincoln wrote:

    If all the wealth in America, was taken by government from those with $250,000 or more, including those with incomes of $250,000 per year or more, it could not cover the orgy of government spending that has occurred in the past few months. If all the money in America were equally divided up among the population, within 1 year the lions share of it would be back in the hands of those who have and control it today. America has forgotten the lesson learned at Jamestown in 1608 when the word went out, "let those who will not work, not eat". It appears that America needs to return to "square one" and relearn all the lessons forgotten since WWII. I'm glad I only have, at best, a few remaining years to live in the foolishness that characterizes modern America.

  • Report this Comment On March 01, 2009, at 9:46 PM, rdlincoln wrote:

    The Preamble of the US Constitution:

    "We the people of the United States of America, in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this constitution of the United States of America.

    We were once a free people before many of us lost our way and began to see government as our provider. It is quite evident that many respondents to this forum now expect the government to be our daddy. We won't last much longer.

  • Report this Comment On March 01, 2009, at 10:58 PM, kstoltz wrote:

    The construction of my house may be solid, and I may be quite comfortable living in it, but I'd still prefer that it didn't drop an extra $20k to $50k just because my neighbor in the same model foreclosed.

    As for government intervention, let's not forget that these problems probably wouldn't have occurred if the government hadn't ended Glass-Steagall at the prodding of the financial industry, the so-called productive institutions who compounded a problem of people buying more houses than they could afford by securitizing them.

  • Report this Comment On March 03, 2009, at 10:03 AM, kstoltz wrote:

    TruthIsntStupid -

    I agree that it isn't a can't-lose investment, but I don't think that now is the time for a tough love approach, where everyone needs to relearn the new reality the hard way. I am lucky: I bought my house in 2003, my wife and I were very careful about not overbuying, primarily because our goal was to afford the mortgage on a single income. I saw first hand how lenders and real estate agents were cajoling us to "buy more house...you'll be glad you did".

    I just think the overall goal should be to get as many people whole again as possible, or at least get them on that road to an even footing to stabilize the economy. It's not because I think people didn't make mistakes, but it's because I'd rather not see the economy get slashed and burned just so it can start growing again. I can understand the sentiment behind it, but I just can't endorse it as the way to go.

  • Report this Comment On March 03, 2009, at 1:35 PM, halftide wrote:

    I have been so upset about the lack of just common sense that I have been having arguments with myself.

    I evolved an opinion to explain the foolishness that there were “two corrects” politically correct and what I call rigorously correct. Rigorous takes in the sciences (minus politics) economics (minus politics) morality (minus politics). I concluded that if one takes a politically incorrect position one is punished. The punishment is just as real as if one takes a rigorously incorrect position. In these times it has come to the place where one has to make a choice because the two corrects are SO far apart.

    Most of the people making the comments are operating in or near the world of rigorously correct and are baffled at how the people who are operating in the politically correct world think and the truth is that those in the politically correct world are similarly baffled.

    The rigorously correct know that we are destroying ourselves on many levels. The politically correct are not inclined to consider information which alarms the rigorously correct. And so we go to along the path of the majority. I think that we need to figure out how this happened that we are so separated from reality based decision making.

    I had forgotten a trip I took through the Red Sea in 1976. In a little town of Halib right on the border between Egypt and Sudan, I met a Russian Geological Survey Team. I had a chance to spend some time with the political officer he gently informed me that direct confrontation was unnecessary with “their” help the US was unwinding itself from the inside.

    There has to be some explanation for how our mass thinking has evolved into being clearly self destructive.

    I received this video in a recent e-mail. I am not a conspiracy theorist. It is with only a brush of embellishment and a blush of recognition what I heard and dismissed so many years ago.

    http://www.dailymotion.com/video/x32cxf_yuri-bezmenov

  • Report this Comment On March 03, 2009, at 4:31 PM, Laniel wrote:

    Great conversation. As a moderate, I'm particularly thankful that most of the discussion is about finding a path toward a stronger society overall rather than how awful the [past/new] administration [was/will be].

    I find it disingenuous to blame Obama for the market dropping during Bush's tenure. Give the man a chance, and hold him accountable for his choices. He didn't make this mess, but we expect him to fix it; if he can't, we will get the chance to replace him. Fool on.

  • Report this Comment On March 04, 2009, at 12:39 AM, capturedby wrote:

    Okay - Can someone here - tell me WHY the answer isn't:

    FIX ALL "SUBPRIME" at 5% - NO RESETS.

    Tell me how this idea would not:

    Stop the loss of homes in neighborhoods stabilizing the house market.

    Return (by having payments that are affordable) some (most) of the "expected" profit back to the investors/bank

    For once - allow the people (most) that have been left out of the home market to keep their home with real rates-not 8.75% and RESETS to 11.75%

    Remember, they (Banks) borrowed at 2% or less - Don't you think that a 3% return is okay - does it really have to be 6% - not enough 9% at the cost of families, neighborhoods, regions. You call yourselves RESPONSIBLE??????

    How do you all miss this??? It seems, that the sentiment here is to repeat the same scenario that has plaqued our system forever. The wealthy stay wealthy and prosper and the middle/lower class play by the rules and DON'T QUALIFY. Always with the orchestrated colorful total bull (anyone from middle-class and down knows is not true) that anyone that works "hard" enough can aspire to the top - Oh that's right, 1 - 2% (out of MILLIONS) actually get somewhere MAYBE - which translates to the rest aren't trying - PLEASE!!!!. Great continuation of the status quo - keep the masses believing they deserve to "live within their "meager" means" create a boom - High-Tech, Housing, Oil, (next) Water, Anything At All - finance it, collect on it, make it unaffordable, foreclose on it, and REPEAT

    MILLIONS have these loans because NOTHING else has ever been available. These are PEOPLE, working PEOPLE (or did), with CHILDREN that SHOULD have a chance at their own home.

    Some comment here about the government affecting the price of homes by helping - I suggest that your theory falsely affects prices of homes by KEEPING them out of reach for MILLIONS of Americans - certainly protects the value of your homes, doesn't it!! I'll take the first idea!

    And finally, Please, check your recent history - the economy was doing great for most of the time Republicans were in charge - Clinton was given a rising economy, Bush was handed a sliding economy and a Terror attack, what happened next - Dow at 14,000 points and Americans working building, fixing, selling, saving because of all that overtime, etc... you remember - don't you??

    CHECK - the house market issue began when the "apparently really needed" RESETS started taking place. One has to wonder WHY the "experts" at the Bank didn't say, " Oh No, Stop those or it all falls down and went home happy with their 3% instead of THIS!!!!!!!!!

    FIX ALL "SUBPRIMES" at 5% - NO FORECLOSURES -

    You worry about Socialism and sign right up for "living within your means" - How's your little grey house, grey car, grey life - Oh yeah, the difference - you choose the color - What winners you are -

    Keep feeding the dream - no not your dream - their dream - the people you will never reach or be - but they will be in charge of whether or not you are WORTHY of a loan.

    Wake up, smell the coffee and go do the right thing (FOR ONCE) stand up for your neighbor, tradesman, little guy and (FOR ONCE) say - No Mr. Wealthy, Rule Making, Money controlling guy - this time you don't get to take ALL the marbles home - take HALF - this time.

  • Report this Comment On March 04, 2009, at 7:25 AM, investmentcafes wrote:

    Congrats MATT

    One of the best blogs here with some attempt at substance on the bloggers part..too bad the " People" in charge..Pelosi,Dodd,Barney Frank..ETC who were in Charge for the past few years..oh yeah all you Left wingers whom Bash bush forget it's Congress and The aforementioned whom did.."NOTHING" for two years,didn't stop the Housing mess but Exacerbated it with no doc loans..no money down..and allowed Illegals to enter this country and Stay.!!!!

    Want to create 10.5 Million jobs.? Eliminate/Deport 10 million Illegals and hire 500,000 more DEA,Border patrol..ETc to enforce the current laws to Expel them but nah you bleeding hearts want them..whew get a back bone.!that would Lower Healthcare costs,lower Rents,Lowr food costs,and use lower social costs for Real Americans, not have the government Force Healthcare/Nationalization upon us so Illegals get "FREE" Health care...thats NOT the Correct Solution..MR Obama.!

    Get the SEC to actually do it's job! lets see Madoff..AIG,Bear stearns,LEH..and Bailout Nation.

    Create CDO/CDS market..it's been 9 months and still no market for those things..whew typical..

    wonder why " Sturm Ruger " Stock has outrperformed for months.?

    Get Treasury to Actually buy bad assets and Nationalize the bad banks,they already are DUH...but take the CDO/CDS junk off the books and allow normalized banks Ratios 10-1 again.!

    Your home is a place to live not an Investment.! your Idealogies of allowing Illegals to enter and remain while not compelling the Democratically controlled congress to address this HUGE issue you ALL will find is Bigger than anyone will admit..and WHY.?

    And for those of you whom say " oh Obama inherited this mess"...yeah sure from a Democratically controlled congress that did NOTHING".! but allow it to Happen..whew...

    Stress test Pelsoi,Dodd,Frank Democrats vs Capitalists,Obama...Free Trade,Free Speech,the right to Carry a Gun and use it,Lower Taxes.

    "Cap and Trade"...sure we want better Air..but not Adding Nuclear to your proposed " Non-Stimlus" stimulus package shows just How Hypocritical this congress is.!

    Thanks for Starting this Blog Matt..I am a Veteran am still serving this Country and my/OUR Rights. though the views of the few don't out weigh the Misguided votes and bill/PORK apprpriations of the many...whew..theres still hope for this country ,Freedom and a better World.!

    Happy Trails.

  • Report this Comment On March 04, 2009, at 10:19 PM, brow47 wrote:

    My first time of seeing this site and know very little about it as yet, but could not resist a comment.

    Yes, there are numerous solid banks in the country, however most are smaller conservative banks that did not buy into the stupid mortgage schemes proposed by our illustrious politicians.

    And some of your comments about drug companies, I will refrain from due to my personal ignorance on that.

    However, my fears of socialism go far beyond the posted subjects of conversation. I hope to enlighten your reading audience with some documented facts, providing space allows.

    THE RISE AND FALL OF EVERY GREAT DEMOCRACY ----HISTORICALLY DOCUMENTED!

    From BONDAGE to SPIRITUAL FAITH to GREAT COURAGE to ABUNDANCE to SELFISHNESS to COMPLACENCY to APATHY to DEPENDENCY and back to BONDAGE!

    DEMOCRACY ALWAYS COLLAPSES OVER LOOSE FISCAL POLICY AND IS ALWAYS FOLLOWED BY DICTATORSHIP!

    Larry Wood

  • Report this Comment On March 09, 2009, at 3:07 PM, Cableman09 wrote:

    But the rules changed......long ago. The foundation of this nation was not to be a Capitalist Democracy, but rather a Republic. The ideal was for Government to listen to the People not the Corporation. Change the loyalties of politicians back to the people and the mess will go away. So far they are protecting the interest of the Banks and Investors not the majority of the people.

  • Report this Comment On March 18, 2009, at 8:31 PM, doc1960 wrote:

    Socialism? When the government funds more and more of the major industry players, and thus has more and more tacit control of "private" industry, the more accurate term is fascism.

    Unlike most of Europe, the US did not initially trade slavery to the king for slavery to the state. It is sad that this, the first moral politico-economic system, is dying. It *was* moral because it was the first and last that did not place the nebulous "interests of society" above the individual's right to life. (Without private property rights, no other rights, including the right to one's own life, can be supported. If one can not freely dispose of the product of one's own thought and effort, the rational support of one's own life is forfeit to the whim of the "group" the "tribe", the "state", the "government.")

    We've sipped this poison for years, and we are about to guzzle the bottle.

    doc

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