The impact of tacking the generally common-sense Sarah Palin onto the bottom of the GOP ticket has clearly not been enough to rescue John McCain from himself. <\/p>\n
First, the Alaska governor has been muzzled when it comes to debunking the idiot contention that we need to cripple our industrial economy to prevent \u201cman-made global warming\u201d — which she knows is ridiculous but has clearly been forbidden to openly challenge. Then, she was encouraged to join Mr. McCain\u2019s \u201cI can be as big a statist as them\u201d chorus, celebrating the fact that she, too has been willing to \u201cpunish greedy big oil\u201d with extra, add-on taxes up in the Land of the Midnight Sun. <\/p>\n
Oil companies that already pay more in federal taxes than they do in dividends, using what\u2019s retained to … you know … hunt for more oil and stuff. But Washington will soon put an end to that! <\/p>\n
If there was any remaining doubt that fans of free markets and limited government have no horse in this race save imperfect Libertarian Bob Barr, Sen. McCain settled the matter in Tuesday night\u2019s not-very-\u201ctown-meeting\u201d debate, announcing without noticeable prodding that he would order his Secretary of the Treasury \u201cto buy up all those bad mortgages and re-negotiate them\u201d … turning Uncle Sam into presumably the biggest and most generous \u201clandlord\u201d in history. <\/p>\n
The scheme is to allow those who contend they can\u2019t afford their current mortgage payments to arrange new, lower payments at the current, depreciated, \u201cmarket\u201d value of the home.
\nBut how is a \u201cmarket\u201d value determined? <\/p>\n
Allison haunts the tag sales and flea markets, searching out vintage garments in as-new condition. Some still bear their $125 price tags from when they were bought at a fancy department store 40 years ago, back when that was real money. She aims to pay ten bucks per garment, hoping she can hang them in her resale booth in the antique mall (where she pays rent and other overhead, you understand), priced at $50. If they don\u2019t sell at $50, she marks them down to $37.50. <\/p>\n
Which was the \u201cmarket price\u201d of the garment? The answer is that every price except the $50 was the \u201cmarket price.\u201d The original buyer happily paid $125 but then got sick or gained weight or changed her mind and never wore the thing. Allison settled on a mutually agreeable \u201cmarket price\u201d of $10 with the previous owner\u2019s daughter at the garage sale. The last purchaser agreed $37.50 was the \u201cmarket price,\u201d happily paying Alison her markup so the final buyer could avoid haunting the thrift shops for a month seeking just the right accessory to complete her outfit for Friday\u2019s gala. Only the $50 no one would pay turned out NOT to be a \u201cmarket price.\u201d <\/p>\n
You can only determine a \u201cmarket price\u201d by putting something on the market to see what a willing buyer will pay at that time and place. If all the houses whose occupants are currently having financial problems were dumped on the market tomorrow, those previously $250,000 houses, now asking $187,000, might quickly drop in \u201cmarket value\u201d to $160,000 or even $110,000, as the supply exceeded demand, creating a \u201cbuyer\u2019s market.\u201d <\/p>\n
But Mr. McCain and the rest of the Old Washington Hands — note neither Sen. Obama nor moderator Tom Brokaw nor anyone else raised any substantial objection to this plan, indicating it may be not merely \u201cthe McCain plan\u201d so much as \u201cthe current Washington consensus plan\u201d — don\u2019t want to see home prices drop to a REAL \u201cmarket level,\u201d which could lead to the general price and credit contraction of the true economic correction they\u2019re trying so desperately to avoid. <\/p>\n
Instead they\u2019ll set the new \u201cprice\u201d of the house at whatever level the occupant can afford, lie, and call it the \u201cmarket price.\u201d <\/p>\n
Is it? Let\u2019s say Ernesto and Latisha, paying a $245,000 mortgage for a home on which they put $5,000 down, agree to \u201cre-negotiate\u201d their loan with Uncle Sam at $150,000. <\/p>\n
First come the local mayor and City Council, complaining their tax revenues will fall if all these houses have to be reassessed at a drop of 40 percent. No problem: Uncle Sam agrees to hand them the difference, out of your federal tax payment and mine — the same funding source that allowed Uncle Sam to buy the $245,000 mortgage and blithely throw away $95,000 of its nominal value, in the first place. <\/p>\n
Now Shawn and Allison, who have been living frugally in a apartment across the street, saving up a $35,000 down payment in hopes they could someday see median home prices drop to $175,000, find out what\u2019s going on and offer Uncle Sam $175,000 for Ernesto and Latisha\u2019s home. <\/p>\n
Nothing doing, Uncle Sam says. We\u2019ve already determined $150,000 is the \u201cmarket price\u201d of a house that\u2019s not \u201con the market\u201d at all; our goal is to keep Ernesto and Latisha in the house they can\u2019t afford, because it\u2019s \u201cgood social policy\u201d to \u201cencourage home ownership\u201d among racial minorities. <\/p>\n
Frustrated, previously hard-working and frugal Shawn and Allison put their $35,000 down on a $200,000 Italian sports car. After a few months, however, they find they can\u2019t afford the payments, so they call their congresscritter: <\/p>\n
\u201cThat predatory car salesman didn\u2019t tell us this little gas-guzzler was going to lose 30 percent of its value the minute we drove it off the lot because it\u2019s now a \u2018used car.\u2019 We want Uncle Sam to buy the note and renegotiate our car loan to something we can afford.\u201d <\/p>\n
Will Uncle Sam do it? Why not? What earthly principle can be stated to defend donating $95,000 on other people\u2019s tax money to Ernesto and Latisha so they can keep the house that no one forced them to buy in the first place, while refusing to bail out — pardon me, \u201crescue\u201d — Shawn and Allison from their car payment dilemma? <\/p>\n
For that matter, shouldn\u2019t Uncle Sam put Allison out of business in her vintage clothing racket, too? Those \u201cpredatory shopgirls\u201d didn\u2019t warn mom when she paid $125 for a dress, decades ago, that it might be worth only ten bucks when we came to sell the thing at a yard sale in 2008. Shouldn\u2019t Uncle Sam agree to buy back all our used clothes at 60 percent of their original purchase price? Why not? They can print all the money they need, or borrow it from the Chinese. Sure, they\u2019d end up with the world\u2019s biggest warehouse full of moth-eaten rags, but wouldn\u2019t it \u201cget the economy moving again\u201d? <\/p>\n
I also find it really upsetting when I get home from work and try to mow the lawn, but it gets dark before I finish. Can\u2019t my Congressman order the setting sun to stay up just till I finish? Why not? Presidential candidates today promise to \u201cfix the economy,\u201d \u201cswitch us from fossil to renewables, creating millions of jobs in the process,\u201d \u201cmake health care free\u201d — all kinds of things that are neither constitutionally authorized nor physically possible. Just ask the sun how many billions it\u2019ll cost. We own the printing presses, don\u2019t we? <\/p>\n","protected":false},"excerpt":{"rendered":"
The impact of tacking the generally common-sense Sarah Palin onto the bottom of the GOP ticket has clearly not been enough to rescue John McCain from himself. First, the Alaska governor has been muzzled when it comes to debunking the idiot contention that we need to cripple our industrial economy to prevent \u201cman-made global warming\u201d […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[18,5],"tags":[],"class_list":["post-117","post","type-post","status-publish","format-standard","hentry","category-economics","category-elections"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pWqFl-1T","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=117"}],"version-history":[{"count":0,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/117\/revisions"}],"wp:attachment":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}