The Gross National Debt

Monday, May 25, 2015

Gettin' prezackly what you asked for and daffodils

Anyone remember "Farm Aid?" I don't know what happened to the money, nor do I intend to research. No farmer I know ever benefited from it.

Remember "We Are The World?"

Remember the housing market bust? Remember the incredible foreclosure explosion?

Remember the base jumper who went splat last week? Remember when people demanded they not be held accountable for their own actions?

"Waitaminnet Baker. That's a non sequitor even for you."

Indeed not. Dean Walker lived dangerously, knew it and paid the price. Whether or not the price was worth the life he lived is something we're not likely to find out in this reality. I admit it would be incredibly amazing to have interviewed him a few seconds before impact. I wonder if he still felt it was worth it.

The point is, everything you do carries risk. You can go blindly, with as much information and safety nets as you can or somewhere in between. The more safety you have, the less freedom you have. The bigger the risk, the bigger the reward.

As John Lee, my erstwhile boss told me about building on a eroding beach line, "You pays your money, you takes your chances." Everything in life involves risk.  Everything. Inhaling invites all manner of microbes, natural and man-made chemicals into your lungs. Get the wrong mixture and you get to interview Dean Walker, post-splat.

Unfortunately, most people want the big reward, but won't take the big risk.

The people in Spain, in the link above, elected a mayor of Barcelona who apparently campaigned on the evils for foreclosure, etc etc.

Two years ago, she testified before parliament at a hearing about Spain's foreclosures crisis. On the panel, Colau spoke right after a representative of Spain's banking industry. "This man is a criminal and he should be treated like one," she said at the time, her voice shaking with rage.
I'm quite certain she could find lots of support in the United States as well. Plenty of people think banks are evil creations and need to be reigned in.

I'm good with that. Let's reign 'em in. Let's demand reform.

Let's force banks to let us break our word, violation signed contracts, lie and cheat and not be held accountable.

"HEY! Baker, that's not what we mean!"

Do tell. What do you call it when you demand that you be allowed to break a signed contract and not pay any penalty? What do you call it when you give your word and back out? What do you call it when you make a promise and walk away?

"But people really don't understand what they are signing."

Agreed. But is this government's fault? My fault? Your fault? If people refuse to educate themselves, who is at fault? You can lead a human to this blog, but you can't make 'em think.

I've never met a person forced to sign a mortgage.

I've an idea. Let's reform the mortgage industry. Let's go back to the way it used to be before foreclosures became a routine. "In 1949, mortgage debt was equal to 20 percent of total household income; by 1979, it had risen to 46 percent of income; by 2001, 73 percent of income."  Go back before 1949 and it was even better, from this perspective. Everybody like that? Cool.

"The U.S. mortgage before the 1930s would be nearly unrecognizable today: it featured variable interest rates, high down payments and short maturities. Before the Great Depression, homeowners typically renegotiated their loans every year." Read more. High downpayment? How about 50 percent of the home value and a loan of 5 years or less. How about a housing market where less than 40 percent of the people owned their home and most people could never afford a home at any time.

If you want banking reform and elimination or drastic reduction of foreclosures, then you are also asking for a much tighter mortgage market. Fewer people buying houses means fewer foreclosures. That's what yer gonna get.

Banks are NOT going to take risks without commensurate guarantees of reward. You may say regulate banks more, but how many of you know how much banks are already regulated?

"Not enough."

Really? So you know how much liquid assets (cash) a bank has to have to make a loan? You understand how much it costs to run a bank?

Never mind.

Better idea. YOU make the loans to people who  want to buy a house. Yes, you. No whining that you can't afford it. Nope. If you demand the banks do more to make loans, lousy loans that won't be paid off and then demand the banks can't try to get their money back, then you make the loans.

It's daffodils. Daffodils being a concept the English language doesn't otherwise encompass. It's a way of thinking and doing that puts the restrictions and freedoms your demand on others also on yourself. For example, if you demand reform of the financial system, then the financial system gets to demand the same reforms in your finances. Quid pro quo comes close, but it's not exact. Daffodils carries with it the same amount of force you apply to others applied to you.

Most people, when they're shoved in the same box they put others in don't like it. Actions have consequences. Daffodils makes sure you get the full experience of those consequences.

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