tag:blogger.com,1999:blog-934395272727224504.post3963470639302237222..comments2023-06-14T04:58:41.133-04:00Comments on Intellectual Carpet Bombing: A Few Thoughtsebl2009http://www.blogger.com/profile/04934119980855539269noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-934395272727224504.post-43061821749618621552008-03-28T20:20:00.000-04:002008-03-28T20:20:00.000-04:00I hadn't actually looked at it that way, Hot Zone....I hadn't actually looked at it that way, Hot Zone. You do make an interesting point regarding the foreclosure sale. <BR/><BR/>The right to a big house does not exist and I never said it did. I may have oversimplified the options available to potential homebuyers, but I never meant to imply that buyers have a right to live beyond their means. Of course they do not. <BR/><BR/>The role of government is to mitigate the bursting bubble. It cannot make them disappear, but it can soften the blow, which it has failed to do this time around.Garbohttps://www.blogger.com/profile/01227982772790196361noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-83467707205671502782008-03-28T19:10:00.000-04:002008-03-28T19:10:00.000-04:00I've got to second everything Ebl and Lang said. ...I've got to second everything Ebl and Lang said. There is no inherent right to a big house. <BR/><BR/>Everyone is so sad about the homeowners who are losing their homes, but no one remembers the smiling family who just bought their dream house from the foreclosure sale. You have to look at both sides.<BR/><BR/>Truth be told, the market did not fail. The market was correcting the mistake, but it is painful. Lenders would have gone out of business and borrowers would have had to declare bankruptcy. People don't like the pain and turn to the government. The government never lets a bubble burst without interference which sometimes leads to other bubbles forming to prop up the economy.hot zonehttps://www.blogger.com/profile/08876103488828330656noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-34081327265853066272008-03-28T14:39:00.000-04:002008-03-28T14:39:00.000-04:00Of course they do not have such a right and an eno...Of course they do not have such a right and an enormous problem that we have as a nation is our inability to save and live within our means generally, not only when it comes to housing. Your solution is correct; Government should enable families to live within their means, not exploit the generosity of others or to live a life they cannot afford.<BR/><BR/>In the future, stringent lending regulations can help prevent lenders from granting loans to those who should not receive them. In theory, the market should have done this, but clearly it failed to do so. But future regulation will not solve today's problems. We still must address what has already happened and a hand's off approach, punishing people for the circumstances in which they find themselves, is no more a solution than bailing them out regardless of circumstances.Garbohttps://www.blogger.com/profile/01227982772790196361noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-73870188666826328932008-03-28T14:21:00.000-04:002008-03-28T14:21:00.000-04:00Garbo - I like the second reaction, but still disa...Garbo - <BR/><BR/>I like the second reaction, but still disagree with the first.<BR/><BR/>If housing is overpriced, buy or rent (preferably rent, since you're predicting the price will drop, and why make an investment you think will depreciate...) a cheaper/smaller/worse house, until prices lower. <BR/><BR/>Living in an inferior house that doesn't 'fit a family's needs' is really a response to EBL's point that "They have no 'right' to the nicer house; they should only procure what is within their means," and ultimately I side with EBL on this one. <BR/><BR/>Families don't have an inherent right to live beyond their means. The solution to poor families that can't afford necessities isn't to justify them borrowing sums of money that they can't reasonably expect to pay back, anymore than than it is to justify flat-out theft. The solution should be for the government to help them meet their needs, not to encourage them to rip off others through whatever options they have open to them.Langhttps://www.blogger.com/profile/16684574431077521663noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-41815875140506924782008-03-28T13:06:00.000-04:002008-03-28T13:06:00.000-04:00It was late and I was more focused on getting out ...It was late and I was more focused on getting out my second point. I did oversimplify, but I think there are other factors that the two of you do not consider:<BR/><BR/>First, the housing bubble increased home values and prices, forcing families to pay more for the home that fit their needs. Rental would be an option, but if rents skyrocket (as they did) and the mortgage turns out to be cheaper, it is hard to blame anyone who went for the mortgage in order to save money. Ironically, such attempts at thrift resulted in financial ruin.<BR/><BR/>Second, and I am kicking myself for not saying so earlier, punish the borrowers by lowering their credit rating. Make it harder for them to buy a new tv or a car or a boat, but let them keep their house. There needs to be an effort to assist these individuals with keeping their home. <A HREF="http://features.us.reuters.com/cover/news/D8C99CD0-AF35-11DC-9E67-616F0DA5.html" REL="nofollow"> Tent Cities</A> are not the answer. They didn't work for Hoover and they won't work now.Garbohttps://www.blogger.com/profile/01227982772790196361noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-7580672193272417762008-03-28T12:09:00.000-04:002008-03-28T12:09:00.000-04:00I'm entirely with EBL regarding your first point.I...I'm entirely with EBL regarding your first point.<BR/><BR/>In addition to finding a cheaper house, people could also choose to rent. Your post presents a false dicohotomy - either buy house X at price $X, or "no home," as you put it, but that isn't the case. Cheaper housing, and renting are both alternatives you fail to consider.Langhttps://www.blogger.com/profile/16684574431077521663noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-83464788385596868972008-03-28T08:03:00.000-04:002008-03-28T08:03:00.000-04:00Also, to your first bullet point, that's a mischar...Also, to your first bullet point, that's a mischaracterization of the individual mortgage holders and their choices. The choice many of these people were making was not between no home and a bad mortgage, it was between a bad mortgage on a house that was well beyond there means and one that was safer. My family, in commercial and real estate, repletes me with the average story - it isn't an underprivileged person choosing between a home and not, it's a person purchasing a $700,000 home and one that might be $300,000. <BR/><BR/>In addition, it's not accurate to portray the choice as manichean in nature. There's no reason that an individual could not downgrade their house and secure a mortgage they could actually pay. They have no 'right' to the nicer house; they should only procure what is within their means. In addition, yes, it's nice to own your own home instead of renting and I'm not necessarily against government sponsored low-interest rates for mortgage lending, but once again that's not the situation we're discussing - we're discussing situations where individuals went far beyond their means.ebl2009https://www.blogger.com/profile/04934119980855539269noreply@blogger.comtag:blogger.com,1999:blog-934395272727224504.post-40655883891753567842008-03-28T07:53:00.000-04:002008-03-28T07:53:00.000-04:00As an side, this article apropos of our discussion...As an side, this article apropos of our discussion, was in the Times this morning<BR/><BR/>http://www.nytimes.com/2008/03/28/business/28regulate.html?_r=1&hp&oref=sloginebl2009https://www.blogger.com/profile/04934119980855539269noreply@blogger.com