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Why Not HOLC?

By Big Tent Democrat, Section Economy
Posted on Thu Oct 13, 2011 at 11:47:38 AM EST
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Martin Feldstein writes:

To halt the fall in house prices, the government should reduce mortgage principal when it exceeds 110 percent of the home value. About 11 million of the nearly 15 million homes that are “underwater” are in this category. If everyone eligible participated, the one-time cost would be under $350 billion. Here’s how such a policy might work:

If the bank or other mortgage holder agrees, the value of the mortgage would be reduced to 110 percent of the home value, with the government absorbing half of the cost of the reduction and the bank absorbing the other half. For the millions of underwater mortgages that are held by Fannie Mae and Freddie Mac, the government would just be paying itself. And in exchange for this reduction in principal, the borrower would have to accept that the new mortgage had full recourse — in other words, the government could go after the borrower’s other assets if he defaulted on the home. This would all be voluntary.

This won't work. The reason is the banks can not recognize these losses. The lack of clothing for the emperor would become apparent. Without a stick, the banks won't do it. There were sticks available in early 2009, but Geithner protected his Wall Street buddies. In any event, why not HOLC?

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    Why Not HOLC? | 79 comments (79 topical)

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    Another reason it won't work (5.00 / 2) (#1)
    by Romberry on Thu Oct 13, 2011 at 01:57:29 PM EST
    It also won't work because bailing out homeowners in this fashion ("the government absorbing half of the cost of the reduction"*) means that everyone who rents or owns their home outright will be effectively subsidizing mortgagors. Who is going to subsidize the renters and outright owners? I think there might be a backlash. In fact, I'm sure of it.

    Also, this whole deal about halting the decline of home prices is folly. Real estate was in an asset bubble. Bubbles pop, and when they do, they deflate. You can't reinflate a burst bubble and you shouldn't try.

    Homes were overpriced, and in relation to incomes, homes remain overpriced. When prices are once again in line with incomes, prices will stabilize and the decline will stop. Best way to get to that result is to do something about jobs and labor's share of income. Trying to prop up home prices during a period of high unemployment and stagnant if not in fact falling wages is putting the cart before the horse.

    Also, why on earth would anyone consider high home prices to be a public good? High home prices just price people out of the market unless someone engineers a financial "solution" (low doc/no doc liar loans, mortgages with negative amortization, teaser rates, ARM and option ARM, etc.) that make the payments "affordable" regardless of price. Seems to me that we just got through with traveling down that path. Smart policy will not steer the same path again.

    Take care of the economy and get workers some decent wages. Do that and the rest will take care of itself.

    *When the government absorbs a cost, that means that the people absorb a cost.

    If you dig into this a little, (none / 0) (#4)
    by Anne on Thu Oct 13, 2011 at 02:28:41 PM EST
    it's apparent that Feldstein is proposing yet another program that purports to help homeowners, but will, in fact, mostly help the banks.  They get to reject homeowners who are still managing to make their payments, but who could use some financial breathing room, they get to go full recourse against any homeowner who does participate but who later fails to keep up, and the government picks up the tab for half the write-down.

    Dean Baker:

    There are two really really big problems with the Feldstein plan. First, it is completely voluntary for lenders. This means that they will not take up the deal with people who they think are likely candidates to repay their mortgage. There are many underwater homeowners who are struggling to pay their bills. Feldstein's plan offers them nothing. The bank knows that they will pay, so they will not put their mortgage in the program.

    However, there will be more questionable loans that will go into the program. Some of these people may be able to make their payments after the principle write-down. They will then get to live in their home until they move and in all probability never accumulate a dime in equity (but the bank got half of its loss picked up by the government).

    Others will take the deal and then find themselves still unable to pay their mortgage -- remember we still have 9.1 percent unemployment and most people in Washington don't seem to give a damn. Under the Feldstein plan the debt will now become a recourse loan, which means that the bank can hound foreclosed homeowners until the day they die for any portion of the mortgage that is not repaid by the sale of the house.

    So there you have it, a solution for a non-problem that gives banks tens of billions of dollars for bad mortgages and makes foreclosed homeowners debtors for life. What could be better than that?

    Indeed.

    I didn't think it was possible to come up with a worse plan than HAMP, but I think Feldstein has done it.


    Parent

    Baker, as usual., slices and dices... (none / 0) (#6)
    by Romberry on Thu Oct 13, 2011 at 03:20:59 PM EST
    ...like a skilled chef with a sharp knife:

    ...house prices are falling for the same reason that the price of Pets.com stock plummeted in 2000. The housing bubble has not fully deflated. If Feldstein bothered to check the data he would know that real house prices are still about 8-10 percent above their long-term trend. Consistent with over-valued prices we see that there is still a near record vacancy rate in housing (topped only by the levels hit in 2010). In other words, the main reason for house prices to decline is simply excess supply.

    Thanks for the link, Anne. Good stuff!

    Parent

    I'm learning first-hand about all that (5.00 / 1) (#17)
    by Anne on Thu Oct 13, 2011 at 04:50:49 PM EST
    excess supply - my daughter and her boyfriend have been living with us, saving for a house, and are now actively looking.

    They looked at one house that sold in 2007 for $385,000; the buyer mortgaged - first and second - about $360K.  She defaulted in December, Freddie Mac bought the house at auction from SunTrust, and listed it for $245K.  The price has dropped twice, down to $175K; they were going to make an offer on it, but it went under contract the day before they were to go see it - and as it turns out, they drove by and realized it was too close to the road and not on a large enough lot, so it was just as well.

    They looked at what turned out to be a HUD foreclosure last night - bought for $339K in 2007, $337K in mortgages, now listing for $220K.  Cracks in the foundation, problems with the kitchen floor, damage to the kitchen cabinets - and HUD fixes nothing, so that was that.

    Lots of houses for sale, and those being sold by individuals - as opposed to banks - have new windows, new roofs, new kitchens and bathrooms, and some are offering to pay closing costs - all to get the houses sold.

    Where these properties are now is close to where they should be - if prices were still as inflated as they were when the bubble burst, there is no way they would be able to afford anything they'd ever want to live in.

    Home ownership is still a good thing to strive for, and lower prices means more people should be able to afford to do it.

    Parent

    Good for them and (none / 0) (#20)
    by BTAL on Thu Oct 13, 2011 at 05:00:32 PM EST
    good luck to them!  Both in finding/buying a home and the mortgage qualification meat grinder they have coming their way.  Today's mortgage qualification process can be a killer.

    Parent
    You probably already know about these... (none / 0) (#21)
    by Romberry on Thu Oct 13, 2011 at 05:30:45 PM EST
    ...but just in case not, two handy links for finding listings all over the US for Fannie Mae and Freddie Mac foreclosure listings. (These are the official links, not third party. Search is by state, county and/or city/zip.)

    Fannie Mae: HomePath

    Freddie Mac: Home Steps

    Parent

    Someone finally bought the house (none / 0) (#30)
    by Militarytracy on Thu Oct 13, 2011 at 09:13:03 PM EST
    that I go past everyday taking Josh to school that was perfectly painted and landscaped.  It had incredible curb appeal.  And yet whoever purchased it repainted the shutters and trim black, and probably meant well in trimming the yard but they did some severe damage to the silver thuja spire trees in the front yard.  Oh well

    Sounds like this is a good time to buy for your kids.  I hope they get a sound home that they really love at a price that makes perfect sense in this new normal.

    Parent

    Thank you for researching this (none / 0) (#9)
    by sj on Thu Oct 13, 2011 at 03:27:52 PM EST
    I hadn't had time yet to do it myself.  But when I saw that the new mortgage would have "full recourse" it made me sit up in my chair.

    Such, such a bad idea.  Is it a trial balloon or just another example of how some people are oblivious to how policy affects real lives, I wonder.  

    I did notice however, that comments appear to be turned off?

    Parent

    Many of the bad loans (5.00 / 1) (#10)
    by MKS on Thu Oct 13, 2011 at 03:43:05 PM EST
    are already full recourse, primarily second trust deeds, and banks don't ordinarily pursue those.  Only those who have a lot of money that are just walking away from underwater properties.

    The full recourse angle was probably put in as a way of making the program more politcally palatable.

    And, in many states (but not California), the loans are already full recourse.  I think Texas is like that.

    Parent

    Most states are like that. (5.00 / 1) (#14)
    by Romberry on Thu Oct 13, 2011 at 04:01:45 PM EST
    Most states are full recourse. If I recall correctly, only eight states have no recourse on PMSI mortgages at all, and eight others have limitations on recourse when lenders conduct non-judicial or trustee foreclosures. That means at least 34 states are always full recourse, and eight others (depending on the type of foreclosure sale) can be full recourse.

    Parent
    Seriously? (none / 0) (#19)
    by sj on Thu Oct 13, 2011 at 04:58:50 PM EST
    I know that HELOC loans are full recourse, but I thought that the whole point of walking away from one's mortgage is limited recourse in that the lender is limited to assets in the original loan contract.  Which is to say, the home itself.  They can't go after you for your car or other assets.  

    Doing some quick reading, I see where I might be wrong, but I'm confused because I do know a couple of people over time who have walked away from their mortgages and AFAIK they weren't haunted by the lenders thereafter.

    In one case, I have no idea what the bank recouped on the home.  In another, he walked away because his mortgage was so upside-down he didn't think he would ever claw his way back.*  I know that his other assets were not seized or ever in jeopardy.

    -----

    * Of course, this was during the first Bush recession.  If he could have held on to Bush II, he likely would have ended up making an inflated profit.

    Parent

    Lenders in the past... (none / 0) (#22)
    by Romberry on Thu Oct 13, 2011 at 05:37:29 PM EST
    ...often did not sue for a deficiency judgement. But since the bottom fell out, the deficiency amount after foreclosure sale is often huge, and there are lots and lots of them. So now they (sometimes) go after them.

    Parent
    Thanks (none / 0) (#26)
    by sj on Thu Oct 13, 2011 at 07:04:40 PM EST
    I had no idea it was (essentially) optional.  You know what I mean.  

    Parent
    It is a basic real property idea (none / 0) (#36)
    by MKS on Thu Oct 13, 2011 at 11:19:49 PM EST
    If you are not up to speed on that, it is pretty hard to have an informed opinion on this mortgage plan.....

    Parent
    The State of California passed (none / 0) (#25)
    by MKS on Thu Oct 13, 2011 at 06:32:20 PM EST
    anti-deficiency laws in the wake of the Great Depression that allowed people to walk away from purchase money residential loans......

    HELOCs are not purchase money, so that rule does not apply to them.  

    However, in California, even for a HELOC, if the lender actually forecloses, then it cannot attempt to collect a deficiency judgment.

    Parent

    Second mortgages and refi where (none / 0) (#31)
    by Militarytracy on Thu Oct 13, 2011 at 09:20:35 PM EST
    people took advantage of the growing value of their home and they extracted it are usually full recourse.  Will they go after it though if they think you have nothing?  I don't know at this point.  If your mortgage remains the mortgage that initially purchased your home though, those mortgages are non-recourse.

    Parent
    Yeah, I learned that today when reading up (5.00 / 1) (#38)
    by sj on Fri Oct 14, 2011 at 02:10:13 AM EST
    My mortgage is my first mortgage and while the interest rate is high by today's standards, I've never really wanted to do a re-fi.  I like the idea of evenutally paying it off.  It worked out well for me overall, because I have real equity in my home.  Also I do have a HELOC which I took out before I found out about the non-recourseness of it.  I don't regret having it, though.  It's saved my butt on a few occasions.

    What a mess it all is.

    Parent

    We are dealing with our (none / 0) (#39)
    by Militarytracy on Fri Oct 14, 2011 at 05:35:57 AM EST
    original mortgage as well, and like you we plan on making this house payment at some time.  I don't know if we could refi easily now.  I'm not sure what our home would appraise for.  I'm fairly certain we aren't upside down, but not completely certain.

    Parent
    Sorry.....final house payment (none / 0) (#40)
    by Militarytracy on Fri Oct 14, 2011 at 05:36:21 AM EST


    Parent
    Just curious (none / 0) (#49)
    by jimakaPPJ on Fri Oct 14, 2011 at 10:52:01 AM EST
    Based on what you wrote and the currently available very low fixed rate loans, why not refinance? You can specify the loan's term to match the years left on your current loan and yet you will most likely get a lower monthly payment.

    Parent
    That's really a very good question, Jim (none / 0) (#54)
    by sj on Fri Oct 14, 2011 at 11:11:55 AM EST
    and I don't have a good answer for you.  Now I can say it is the non full-recourse-ness of it, but obviously that wasn't a factor for the last 15 years.  I just prefer not to.

    Parent
    Are you 100% sure that (none / 0) (#59)
    by jimakaPPJ on Fri Oct 14, 2011 at 11:43:46 AM EST
    it is doesn't have recourse??

    Most states I know about if you default on any debt you can be sued and if you lose your assets can be seized/sold to pay the debt.

    Some states, I think FL is/was one, have Homestead Laws that protect the home from being taken for debt settlement in case of bankruptcy.

    Parent

    Not 100% but I'm pretty darn sure (none / 0) (#64)
    by sj on Fri Oct 14, 2011 at 12:46:39 PM EST
    My loan is FHA and is part of small state bond offering for first time buyers -- back when 20% down was de rigueur.  I only had about 11% but it was during the first Bush recession and there were lots of foreclosures.

    Anyway the loan had more protections at the expense of more restrictions.  For example, I cannot have a home based business.  Believe it or not, that even includes a paper route.  A fact my son was rather smug about when he was paper route age.

    Frankly, at this late date I can't remember specifically what some of those protections were, but I recall at the time that the consensus was they were well worth the tradeoff of the stated restrictions.

    Keeping my original mortgage right now is more a matter of habit.  And also appreciation of the fact that I'm finally able to actually see the principle go down.

    Speaking for myself, full recourse or not isn't a significant matter.  I intend to pay off this loan.

    Parent

    Whoa (none / 0) (#66)
    by sj on Fri Oct 14, 2011 at 12:54:49 PM EST
    I've been feeling like I've had my house for about 15 years or so. But it's really about 22.  

    I can smell the final payment LOL

    Parent

    Been there and done that. (5.00 / 1) (#70)
    by jimakaPPJ on Fri Oct 14, 2011 at 06:21:24 PM EST
    And its fun fun fun!

    But you might still want to refinance the remaining principal for 8 years at the current fixed rates and still have it paid for at the same time but have lower monthly payments.

    Parent

    I'll think about it (none / 0) (#74)
    by sj on Fri Oct 14, 2011 at 08:27:38 PM EST
    I don't have an argument against it, really.

    Parent
    Wow Jim...catch up (none / 0) (#90)
    by Militarytracy on Sat Oct 15, 2011 at 06:57:01 AM EST
    If corporations were held to such standards they would all have gone belly up at this time.  The collateral of the home is what secures and backs the loan, walk away and leave them with the house and you are legally done with it if all you have going on is a standard mortgage.  Same way with a car unless you signed something stupid.

    Parent
    In most states, a purchase money (none / 0) (#61)
    by MKS on Fri Oct 14, 2011 at 11:47:43 AM EST
    first mortgage still has recourse....

    Parent
    Non-recourse states (none / 0) (#62)
    by Yman on Fri Oct 14, 2011 at 11:53:11 AM EST
    Used to include 12 states:  Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, and Washington.

    Always subject to change, not legal advice, blah, blah, blah ...

    Parent

    Martin Feldstein (none / 0) (#53)
    by cal1942 on Fri Oct 14, 2011 at 11:09:58 AM EST
    is the quintessential example of academic credentials for sale.

    He has sat on the board of various financial institutions.  He is a living symbol of conflict of interest.  He was one of Reagan's principle economics advisers.

    Shame on Harvard for allowing him to stay and shame on the New York Times for publishing his op-ed.

    Parent

    I'm not going to look it up, (none / 0) (#13)
    by bocajeff on Thu Oct 13, 2011 at 03:50:26 PM EST
    but I believe most if not all Canadian mortgages are full recourse...and they have universal healthcare.

    Parent
    Yes (none / 0) (#41)
    by Militarytracy on Fri Oct 14, 2011 at 05:45:30 AM EST
    And I suppose if we had a system where all mortgages were full recourse that would have changed up what happened during the housing bubble tons and tons.  Canadians are used to witnessing that when people lose their homes, they lose everything.  Americans had no such influence and memory and that shared reality did not govern any decisions during the housing/mortgage bubble.  I have a very boring VA loan, I made my down payment, the whole boring nine yards and I did it solely with my own determination.  My phone rang constantly with lenders trying to get me into "their" loan once my name hit some sort of hunting mortgage list.  The offers were pretty crazy and all the phone ringing made me crazy.  And before the ink was dry Countrywide wanted to loan us 110% of what our house was worth....Holy Crap.  Nobody talked about anything being full-recourse or non-recourse, such conversations could have maimed a confidence fairy.

    Parent
    If something is full-recourse (none / 0) (#42)
    by Militarytracy on Fri Oct 14, 2011 at 05:54:54 AM EST
    It also changes up where it fits into the securitization schemes and supposedly how much risk is attached to it.  Selling investors American debt was the hottest thing going and our new bankruptcy laws helped a lot too to create the insanity.  If we went bankrupt they took our 401k, they took everything.  It all sounded so swell, just keep feeding us all this cheap money....nobody involved in any of this wanted to acknowledge that the whole charade was so over leveraged that it wasn't possible for most people to ever pay back what was constantly being shoved under their noses.  The idea was that the ability to bleed all of these turnips forever even if they went bankrupt was the new mother lode.

    Parent
    Yeah, I think that at the time when markets (none / 0) (#5)
    by tigercourse on Thu Oct 13, 2011 at 02:54:57 PM EST
    were in freefall 3 years ago it made some sense to try and slow the decline a little, to prevent a depression, but I don't really see the value in trying to push housing prices up (and housing prices are rising in several areas, like the Northeast, already) now.

    Parent
    Consumer demand is what drives the (none / 0) (#11)
    by MKS on Thu Oct 13, 2011 at 03:45:44 PM EST
    economy--somed 70% of it.  Consumer spending is way down.  Consumers are weighed down by debt.  

    People are spending because they are burning off debt.....

    Parent

    People are not spending (none / 0) (#12)
    by MKS on Thu Oct 13, 2011 at 03:50:12 PM EST


    Parent
    Think of it as less than 10% ... (5.00 / 1) (#7)
    by Yman on Thu Oct 13, 2011 at 03:27:06 PM EST
    ... of the cost of the Iraq/Afghanistan wars.

    Now those were "just nuts".

    To think we should not defend ourselves (none / 0) (#15)
    by jimakaPPJ on Thu Oct 13, 2011 at 04:26:09 PM EST
    is.... are you ready???

    NUTS!

    Parent

    To think those are defensive wars (5.00 / 2) (#16)
    by sj on Thu Oct 13, 2011 at 04:37:22 PM EST
    is.... are you ready???

    NUTS!

    Parent

    Do you wanna play defense on their 5 (none / 0) (#28)
    by jimakaPPJ on Thu Oct 13, 2011 at 09:02:47 PM EST
    yard line or ours?

    Parent
    The 5 yard line, Jimbo, (5.00 / 1) (#46)
    by Mr Natural on Fri Oct 14, 2011 at 08:09:50 AM EST
    is our economy.  Osama won.

    Parent
    Not only the economy (5.00 / 1) (#47)
    by sj on Fri Oct 14, 2011 at 09:38:45 AM EST
    We've also traded privacy and freedom of movement to pursue the chimera of safety.

    Parent
    Geezuz (5.00 / 0) (#55)
    by cal1942 on Fri Oct 14, 2011 at 11:28:10 AM EST
    You sleep with a night light don't you.

    Iraq?  How would they come anywhere near our 5 yard line (assuming they even wanted to)?  With the navy they didn't have, with the air force that was falling apart and bottled up by no fly zones, with the army that lacked modern tanks, with a crumbling infrastructure and most military weapons falling apart because of more than a decade of sanctions.  A nation with no industrial base, that depended on imports for the major implements of war.  That's what you fear? As for Afghanistan, do you really think that landlocked pile of rocks is an existential threat to this nation?

    Parent

    Good grief (none / 0) (#73)
    by jimakaPPJ on Fri Oct 14, 2011 at 06:33:48 PM EST
    We're not talking conventional war here.

    And you know that.

    How about a "Dirty Bomb" in NYC? Makes the current demonstrations look tame.

    Parent

    So you're comparing (none / 0) (#79)
    by cal1942 on Fri Oct 14, 2011 at 09:54:15 PM EST
    Occupy Wall Street to a terrorist attack.

    Reprehensible.  But standard fare for right-wingers.

    Parent

    Good grief double (none / 0) (#87)
    by jimakaPPJ on Fri Oct 14, 2011 at 11:38:15 PM EST
    The conversation has nothing to do with OWS. Read up the thread to Yman's comment.

    Parent
    I think we should invade Russia (none / 0) (#33)
    by MKS on Thu Oct 13, 2011 at 10:04:40 PM EST
    and China now.  We should hit them first before they invade us......

    Parent
    Actually (2.00 / 0) (#71)
    by jimakaPPJ on Fri Oct 14, 2011 at 06:31:57 PM EST
    Mutually Assured Destruction - MAD- worked with Russia and will probably work with China, if we still have the ability to project a devastating second strike after the anti-war folks get done with us.

    But MAD doesn't work in asymmetrical wars because there is no nation state to strike back at. Plus when the terrorists think suicide is great they don't care what happens to the country around them.

    It is a religion gone mad thing.

    What you can do is what we did in Afghanistan and Iraq and go preemptive. The question then becomes, do we really think we need to rebuild the stuff we just knocked down?

    Bush, and our basic current strategy, is yes. Nation building is the name of the game. And that is were probably 80% of the cost has gone.

    I'm not that nice. I'd knock it down and then tell them to fix it.

    Parent

    And let;s invade France (none / 0) (#34)
    by MKS on Thu Oct 13, 2011 at 10:06:29 PM EST
    because they represent a threat to our way of life.....

    Parent
    Hmm (5.00 / 1) (#18)
    by Ga6thDem on Thu Oct 13, 2011 at 04:55:59 PM EST
    so you still believe the lie that Sadaam attacked us on 9/11?

    You need to look at how other countries have successfully dealt with terrorism and it's not by invading countries.

    Heck if we really thought that invading a country would protect us from terrorism we would be invading Saudi Arabia which produces most of the terrorists.

    Parent

    Yeah - to suggest we had to ... (5.00 / 1) (#23)
    by Yman on Thu Oct 13, 2011 at 05:46:51 PM EST
    ... "defend ourselves" by invading and occupying Iraq and Afghanistan is pretty nuts.

    I'll give you that ...

    Parent

    Do you know how many.... (5.00 / 1) (#24)
    by Romberry on Thu Oct 13, 2011 at 05:58:26 PM EST
    ...Afghanis and Iraqis were part of the group that hijacked and crashed those airliners into the WTC and the Pentagon on 9/11?

    Parent
    tut tut all of you (none / 0) (#29)
    by jimakaPPJ on Thu Oct 13, 2011 at 09:11:42 PM EST
    Of course Iraq didn't attack us.

    He was merely planning to get back in the WMD business... Probably wouldn't have sold any of those any terrorist...that's sarcasm, of course...

    And let me see.... I think we made an offer to the Taliban if they would turn over Osama we wouldn't attack.

    They tried to negotiate and things turned out rather badly.

    Whether you wish to admit it or not we are, and have been for years, engaged in an asymmetric war with loosely organized terrorist groups that float from country to country supported by various groups within the countries. See Iraq, Iran and Pakistan for starters.

    Could we have done it differently?  Yes, we could have just bombed them back to 200AD and then walked away. But we didn't want to kill too many people so we decided to bankrupt ourselves and still not have their cooperation or attention.

    The time will come, boys and girls. The time will come.  

    Parent

    About that offer... (none / 0) (#32)
    by Romberry on Thu Oct 13, 2011 at 09:41:33 PM EST
    You wrote:

    I think we made an offer to the Taliban if they would turn over Osama we wouldn't attack.

    Do you recall what the Taliban's response was? It was "Show us evidence that Bin Laden was involved and we will turn him over." And our response? We ain't gotta show you nothing. (Seriously. That was our government's response to a chance to avoid a war. Really.)

    Parent

    Yes that's what we said. (none / 0) (#50)
    by jimakaPPJ on Fri Oct 14, 2011 at 10:58:18 AM EST
    Now, do you actually believe that the Taliban would have accepted anything we showed them?

    They just wanted to turn it into a Paris Peace Accords thing where they would argue over the shape and size of the table while getting world wide attention.

    Parent

    Do I believe the Taliban would have... (none / 0) (#78)
    by Romberry on Fri Oct 14, 2011 at 09:46:59 PM EST
    ...accepted proof? Yeah, I do. The Taliban did not attack us, and they did not condone the attack. The Taliban in Afghanistan did not want to be a player on the world stage. They wanted to be left alone. But ya know what? It doesn't matter what I believe or don't believe. What matters is that the White House when presented with an opportunity to possibly avoid war chose war. It's not like showing the Taliban some actual evidence was going to hurt us or cost us much of anything. The problem really boiled down to this: There was no evidence.

    Parent
    "Planning" - heh (none / 0) (#44)
    by Yman on Fri Oct 14, 2011 at 08:05:24 AM EST
    Of course, that's not how it was sold at the time.  But you're right - it was soooooo benevolent of us to invade and occupy their country rather than just "bombed them back to 200AD".

    That's sarcasm.

    Although I'm sure your bigoted, gun-nut girlfriend who wants a holy war with "Musloids" would agree with you.

    Parent

    Of course Bush (2.00 / 1) (#51)
    by jimakaPPJ on Fri Oct 14, 2011 at 11:02:39 AM EST
    used the information he had available.

    He and the world's largest intelligence agencies believed that Hussein had WMD's and was planning to produce more WMD's.

    Well, they were half right. He was planning to get back in the business.

    So it was a good thing to stop him.

    Just as it will be a good thing for Obama to shut down Iran before they build a nuke and take out NYC.

    Of course I'm sure you don't mind a country that has vowed to destroy Israel and attack us has nukes.

    Parent

    HALF right (none / 0) (#56)
    by Yman on Fri Oct 14, 2011 at 11:28:41 AM EST
    Bush used some of the information he had available, conveniently ignoring the rest to build a case for going to war against Iraq, including false accusations of WMD, plutonium purchases and trying to connect them to Al Qaida.

    But luckily we didn't go all out and engage in a holy war like your girlfriend wants to do, or follow your alternative and "bomb them back to 200AD".  Better to deal with any possible threats by invading and occupying them, wasting thousands of lives and trillions of dollars - then listen to Tea Partiers whine about spending a fraction of the money on putting people to work.  Guess we should get ready to invade North Korea, Iran, China, Pakistan, etc., etc., etc. - see ya at Great Mistakes.

    Heh.

    Parent

    Tutt tutt (none / 0) (#57)
    by jimakaPPJ on Fri Oct 14, 2011 at 11:37:16 AM EST
    The evileeeeee Bush.... Always and forever.

    You guys just can't get over that he beat Algore in the election.

    He had more than enough information to tell a reasonable man that he should act.

    And God help us if we ever elect someone who demands 110% proof.

    Holy war??? Catch a clue. We have been in one for years and years and years. You are just afraid to admit it because if you do then you will have to make a decision.

    Fight or surrender.

    How do I know what you will do.

    Parent

    Not sure about "evil" (none / 0) (#60)
    by Yman on Fri Oct 14, 2011 at 11:45:14 AM EST
    Stupid, manipulative, simple ... absolutely.

    No one was demanding "110% proof" ... but a degree of certainty (as opposed to manipulation and ignoring contrary evidence) would be nice, particularly before wasting thousands of lives and trillions of dollars.

    But I can understand why someone who will never have to actually fight in a real war and doesn't need a job would love to talk tough about fighting a war rather than producing jobs.

    Parent

    So homeowners left with underwater mortage (5.00 / 1) (#43)
    by BobTinKY on Fri Oct 14, 2011 at 07:47:02 AM EST
    only the face of the bady guy changes.  It is no longer a bank forclosing on a homeonwer it will be Uncle Sam taking whatever he needs to satisfy the debt.

    Nice way to instill or firm up hatred of the government Mr. Feldstien while minimizing losses for the revered capitalists whose greed and incompetence created the mess.

    And that Marty's (none / 0) (#58)
    by cal1942 on Fri Oct 14, 2011 at 11:40:04 AM EST
    helped to enable over the years.

    Parent
    So, as a renter, I *can* buy a house! (5.00 / 1) (#45)
    by jpe on Fri Oct 14, 2011 at 08:08:22 AM EST
    It just won't be mine, and it'll be paid for with my taxes.

    I can't imagine why people wouldn't go for that.

    Yeah (2.00 / 1) (#52)
    by jimakaPPJ on Fri Oct 14, 2011 at 11:03:48 AM EST
    Kinda like owning a park and having demonstrators take it over.

    Parent
    No, Jim, it is nothing (5.00 / 1) (#63)
    by caseyOR on Fri Oct 14, 2011 at 12:20:50 PM EST
    like that. People might have some respect for your comments if they made sense or contained actual verifiable facts. This drive-by commenting habit of yours does nothing but make you look foolish.

    Come on, Jim. I have to believe you are better than this.


    Parent

    Although to be fair (none / 0) (#65)
    by sj on Fri Oct 14, 2011 at 12:50:16 PM EST
    Jim doesn't go around dropping troll ratings on those who call him out.

    Ot would that be dropping troll droppings?  Whatever.  He doesn't do that.

    Parent

    O supporters "DARING to be idealistic" (5.00 / 2) (#80)
    by Yman on Fri Oct 14, 2011 at 10:06:17 PM EST
    ... right after criticizing "naivete".

    Heh.

    Then stop whining (5.00 / 2) (#89)
    by Yman on Sat Oct 15, 2011 at 06:56:18 AM EST
    Somehow, an Obama supporter taking about the importance of "daring" is particularly funny.

    Danton also said, "In revolutions authority remains with the greatest scoundrels".

    Extra credit for "bilious viciousness", though

    Some of the "younger" folks (none / 0) (#94)
    by MKS on Sat Oct 15, 2011 at 10:16:37 AM EST
    did take a risk in being overtly so idealistic and you cut them off.

    The authority or conventional wisdom here is so self-reinforcing that it is referred to in shorthand and is quite of the track of the wolrd as most perceive it.

    You talk about policy when I was talking about the supporters.

    Parent

    What?????? (5.00 / 1) (#97)
    by Yman on Sat Oct 15, 2011 at 08:24:53 PM EST
    Some of the "younger" folks did take a risk in being overtly so idealistic and you cut them off.

    Who, and what are you talking about?  How did I "cut them off"?

    The authority or conventional wisdom here is so self-reinforcing that it is referred to in shorthand and is quite of the track of the wolrd as most perceive it.

    English, please.

    You talk about policy when I was talking about the supporters.

    I was talking about policy, but applying the word "daring" to either one is pretty funny.  Given the ever-growing list of broken promises, I'd say naive was a much more appropriate description for the latter.

    Parent

    Perhaps you would be better served (5.00 / 2) (#92)
    by Anne on Sat Oct 15, 2011 at 08:54:10 AM EST
    by not manipulating the comments of others so that you can have the argument you want - a tactic we are all quite familiar with via ABG.

    The longer you keep insisting that people said things they never said, or that they meant things they have themselves repeatedly explained to the contrary, and the more you insist on countering non-personal arguments with deeply personal insults, the deeper you dig yourself into a hole that is substantively empty.

    And your new habit of stalking people through these comment threads just to leave one of those insults is only ensuring that when you do make a cogent and articulate comment, few people will bother to read it.

    That's all it would cost? (none / 0) (#2)
    by MKS on Thu Oct 13, 2011 at 01:58:34 PM EST
    And Banks are doing short sales all over the place now.....

    To get this monkey off the economy's back, it would only cost $350 billion?

    Only one third of a trillion?? (none / 0) (#3)
    by jimakaPPJ on Thu Oct 13, 2011 at 02:27:19 PM EST
    Actually 17 billion more.

    This is just nuts.

    the face of corporate criminality (none / 0) (#8)
    by jeffinalabama on Thu Oct 13, 2011 at 03:27:15 PM EST
    and the continued privilege of the gigantic corporations that created, or at least helped along this mess... 1983, the Call, take a listen.
    The Walls Came Down.
    Yup. I can't even listen to these plans anymore (5.00 / 1) (#35)
    by ruffian on Thu Oct 13, 2011 at 10:12:42 PM EST
    The root of the problem is that the houses were overpriced due to the unethical (at best) policies of the mortgage industry. Everyone in the realestate/mortgage industry was incentivized to pretend houses were worth more than they were because high risk was all of a sudden prized by pushers of credit default swaps. It was not a traditional market where the banks were afraid of risk- they actively sought it, relabeled it, and sold it.  Home buyers had no idea this was going on-bthey relied on bankers to act like bankers and not casino patrons.

    They got bailed out, we got sold out.

    Parent

    transparemt? (none / 0) (#27)
    by diogenes on Thu Oct 13, 2011 at 07:09:53 PM EST
         If this idea made any economic sense at all then Warren Buffett and Berkshire Hathaway would be buying up all sorts of foreclosed mortgages.
         If the government wants to subsidize foreclosed, underwater mortgages then let it openly pass a bill giving the money and either raising taxes or borrowing more money to pay for the program.  

    A decent fix. (none / 0) (#67)
    by redwolf on Fri Oct 14, 2011 at 01:40:57 PM EST
    Here's an idea: Force banks to evaluate the actual market price for the house on their books, shut the bank down if their capital is too low.  Have the government seize the loan and cut the loan total owed amount to the value of the minus the amount payed by the home owner.

    This gives home owners a reason to stay in their houses, forces the bad debt out the system, and finishes the housing bust in a mater of 18 months  instead of 10 years as our current path is headed.  Hell it's even fair as the home owner's not receiving a fair house he/she's just get the mortgage adjusted to the current market value.  Even tea party people can get on board with that.

    Remember FDR had the guts to shut the banks down.  If Obama wants to get re-elected he needs to show some guts and actual fix something.  A plan like this might win the president a second term.  Screw the banks, save the home owner should be his motto.

    What guys? (none / 0) (#83)
    by sj on Fri Oct 14, 2011 at 11:20:43 PM EST
    What are you talking about?  What comment are you even responding to?  You just parked this non sequitur here, why exactly?  Later, my little stalker.

    Why Not HOLC? | 79 comments (79 topical)

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