When I sat down to check my email and scan the on-line newspapers this morning, I was greeted with this crushing headline:
White House deals blow to Baker "buy-out" planWASHINGTON — In a severe blow to state and local plans for rebuilding hurricane-devastated areas, the Bush administration Tuesday came out against a homeowner bailout proposal that many in Louisiana saw as the key to economic recovery and the rebirth of a redesigned New Orleans. Donald Powell, President Bush’s choice to oversee the Gulf Coast recovery from Hurricanes Katrina and Rita, said that grant money already appropriated by Congress — as much as $6.2 billion for Louisiana — would be “sufficient” to take care of homeowners who suffered the most in the storm.
What I originally wrote on the subject I've deep-sixed, after a conversation I had with my wife this morning.
Wife: "So did you see the Times-Picayune this morning?"
Me:
"Well, that might help us with house shopping. As far as I can see right now, every home in New Orleans that took water gets a starting offer of $1."
Wife: "I could buy 300,000 of those for what a dry house might cost."
The little light bulb didn't go off until about an hour later.
We are being swindled.
Think this through with me: to accept the failure of the Baker Bill would require that the Republican Party--friend to business everywhere--is prepared to see every company that wrote or underwrote mortgages in Louisiana take it in the pants. There would be massive losses, company failures, and significant disruption of the housing market in the United States.
So, class, who thinks that George Bush and the members of Ambramoff's Flying Golf Club in Congress are going to let this happen? No hands? Very good.
Because there is no way they will let that happen. They would have to step in and bailout the mortgage folks at some point, or face the possible collapse of the critical housing market. Exeunt the Bush economic recovery, stage right.
Two things are underway here. First, the Compassionate Conservative in Chief is prepared to allow hundreds of thousands of Louisianians to lose all of their equity and go into bankruptcy. Those folks will then spend the rest of their lives paying out the rest of the mortgage on their ruined homes under the less-than-generous terms of the new bankruptcy bill. He gets paid either way, so that's not a problem. For him.
Later the CCinC will step in to save the home building, mortgage, real estate and related industries by bailing out the mortgage holders. This is perfect consistent with the way the current batch of politicians in Washington like to do things, going back to the Savings & Loan bailout. Remember that one? The average Joe and Jane got there couple of thou' from the FDIC and lost the rest. The people who milked the system for all it was worth got to keep all of their illicit gain.
As if this weren't fun enough, consider my wife's thought this morning. Be prepared to be inundated with calls from helpful people willing to cash you out of your house for dimes on the dollar--of your lot value. When they figure this out (if they weren't in from the beginning), the vultures will no longer be circling. They'll be sitting in the tree over your sorry ass, practicing their four part harmonies and waiting to come in for dinner.
We are being swindled Texas-big, by people who know how its done. Forget fair buyouts. The speculators will flock in and buy up vast tracts of property for next to nothing. When you're done endorsing that paltry check to the mortgage company, the guys in the White Hats (the ones with hats only, no cattle) will jump in and take care of the rest of your mortgage. Well, not the rest of your mortgage. You'll go to your grave owing on that. But the mortgage holders will get theirs. Just you wait and see.
But don't panic. It's hard to get took when the guy standing in the doorway hands you a card that says George W. Texan, Grifter on it.
Before you accept that offer for dimes on the dollar, lot value only, remember: there's no way they're going to let the mortgage people go under. Like all good scams, this one only works if we're willing to play along.
Don't let them get away from it.
P.S.--If they want to play hardball, so can we. Be sure to talk this idea up everywhere you can go. This plan means the collapse of the housing market, including all of the bubble markets. No new housing starts, no existing home sales or refinances. Pop goes the bubble. I think maybe you should call your favorite talk radio host, or visit your favorite Internet chat room, and share this bit of wisdom. I think a nice little national panic would be an appropriate return for being treated this way, don't you?
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