Obama's Housing Rescue Plan and the Responsible Homeowner

There is an uproar in the air.

Rants like the ones by the (in)famous Rick Santelli, has people up in arms, about not wanting to pay for their neighbor's mortgage. Rick's rant reminds me of the Sudanese people who protested the International Criminal Court's arrest warrant for their President, who has been accused of committing war crimes and genocide against the people of Darfur. The depths of ignorance that encourages such great manipulation is stunning. That the very same people whose friends, neighbors and relatives have been the target of genocide, now protest the arrest warrant of the person who is responsible for the genocide, is at best very sad and at worst, another crime of exploitation against the ignorant. Like the Sudanese, some of our people are being misled, once again, by the likes of Rick Santelli. I know the example of manipulation and exploitation I gave above is hard-hitting, but the point is this: we shouldn't miss the forest for the trees. Let us not cut off our noses to spite our face.

Obama's plan to rescue homeowners who are stuck in high interest, fancy mortgages that they are unable to pay has gotten a lot of people's (especially Republicans!) knickers in a bunch. Many have said that they do not want to rescue irresponsible people who have taken out a larger mortgage than they can afford or bought a larger house than they can afford.

For one second, lets set aside the fact that the taxpayer is rescuing irresponsible banks and financial companies to the tune of many billions, even though many have knowingly sold bad mortgages to people by misleading, mis-stating or misinforming them. That is a debate for another blog post.

Even if the American taxpayer was not rescuing the banks and financial industries, I would still recommend we stand by Obama's plan to rescue the distressed homeowner.

Why do I say this? It is not because I stand to gain personally. No, I will not benefit from Obama's plan, so there is no vested interest here. The reason I support Obama's plan, even though it is not perfect, is this: If there is ever a chance that the housing market recovers and by virtue of its tight interconnection, the financial markets recover, the only hope is to stem the foreclosures.

The banks which are opposing or dampening the extent of Obama's homeowner rescue package are continuing to exhibit the very same behavior that caused this collapse: that of greed, selfishness and short term mercenary avarice. What they do not understand is this: foreclosure benefits no one. NO ONE!. Not even the neighbor who has been very meticulous is paying his mortgage, very responsible in buying the home he can afford and who now resents having to rescue someone he considers irresponsible.

When a home in a neighborhood goes into foreclosure, all the bank is interested in, is to retrieve the principal they put into it. The homeowner might have had about 10% or 20% invested in the home. But the bank will very easily price the home down to get it off its books. What does that do to a neighbor's home, the one who has been responsibly paying his mortgage? It automatically brings the value of his house down to match that of the foreclosure. In the end, as more foreclosures hit a neighborhood, the value of all the properties go down - it no longer matters if they are foreclosed or not.

So it is in the best interest of ALL of us, even those who have been religious about paying our mortgages, to stem foreclosures. The money spent will eventually benefit EVERYONE, not just the ones who are being rescued.

And Obama's plan, tries to achieve some of it (provided the banks don't lobby the House and Senate to add their riders to mangle the plan.)

Cliff hanger

Found this cartoon on the Miami Herald site and couldn't resist sharing. :)

We still have the GOP telling us what we are doing wrong. And some of us are still listening!

Plumbing the depths - GOP style!

Here is a nice story: The sun is shining brightly. The seas are calm. The fish are swimming close to the surface of the azure blue waters practically begging to be reeled in by the fishing lines. And GOP is sailing their boat looking up proudly at their captain at the helm. He is doing a great job. Everything is under control because the GOP is IN control!

Suddenly, the weather changes. Dark, ominous storm clouds gather. The sea gets rough and choppy. The fish have swum deep into the sea, hiding in fear. The GOP'ers glance up at the wheel. The captain is nowhere in sight. He's on vacation at his Texas ranch. So they look for the 2nd in command. Oh no, he's gone hunting and has shot his friend in the face.

So they grit their teeth and ask for "all hands on the deck" to prevent the ship from sinking. Somehow they muddle through, to hold the ship afloat until the captain retires. Now they are looking for a new captain. Someone with a spine. Someone who knows how to stay in the limelight. Someone who will grab on to opportunity and hold tight. Someone who will stand firm (if muddled) about their conservative stances.

They cast around for a leader. They search high and low. For as far as they can scan the horizon, they cannot find anyone to captain their floundering ship.

So they finally cast their lines in the deep choppy waters of the GOP base and reel in a dead fish. This was the fish that John McCain, the previous de facto leader had reeled in earlier to help his sinking ship stay afloat. For lack of a better alternative, they resurrect it and lo! Here is our leader. Guess who?

Our intrepid, opportunistic, tax-dodging, unlicensed, Joe, the plumber!