FacebookTwitterGoogle+RedditEmail

Sucker Punched By Speculation

by ALAN FARAGO

This terrible idea will not die: that the only way to revive the US economy is to reduce mortgages on homes and property purchased at speculative values. The fact that so many homeowners (like me) did not buy more house than they could afford, did not buy into the speculation economy, did not use homes as ATM’s, continue to pay monthly mortgages, honored their contracts and provided an example of fiscal responsibility to their families: these facts do not add up to a hill of beans according to sober commentators including former president Bill Clinton.

Clinton, especially. It was his administration (thank you, Robert Rubin) that endorsed changes to banking laws that turned the speculators loose (thank you, Phil Gramm). And it was Bush, afterwards, who paved the way for “the ownership society” (thank you Mel Martinez and Jeb Bush) and the wholesale surrender of the Federal Reserve to the gamblers and thieves. All remain more or less in situ: that is another matter.

So here is a deal that might be acceptable to fools like me, who find the idea of mortgage principal reduction at the bottom of a vomit bag. Pay me off.

Do mortgage principal reduction (MPR) in a way that rewards the ethical behavior implicit in renters who decided not to buy and homeowners who do not need reduction. This would work through cash rewards based on residential zip codes, GIS mapping, and proof of residence. (Now that I’m day-dreaming: turn Homeland Security guards at airports into office actuaries to handle the billions in claims.)

In each zip code, establish a grid comprising “speculative market value” and new “present fair value” for homes based on square footage, bedrooms, bathrooms, etc. Based on the difference between the two (SMV-PFV x months in residence or ownership), establish a baseline monthly payment. From that baseline, the federal government (ie. taxpayers) would reduce mortgage principal for the underwater homeowners and make a one time payment to all renters and all other homeowners who can prove residence and do not claim a mortgage principal reduction. In my imagination, for our honesty we would also receive a bonus tacked on. Say, a fifty percent add-on to the monthly payment for common sense and frugality.

The only thing I am serious about, here, is that the conversation about mortgage principal reduction must include benefits for those who played by the rules. My preference would be for this dialogue to take place in a public square with the bankers and speculators in stockades.

Millions of Americans are paying a severe price for having been suckered punched by a culture of speculation. Many wage-earners, too, are like victims of drive-by shootings. Many couldn’t speculate on housing but would have, if they could. Many wouldn’t, because they were cautious about predators. Isn’t it their turn for a free ride, too?

Alan Farago is conservation chair of Friends of the Everglades. He can be reached at: afarago@bellsouth.net

Alan Farago is president of Friends of the Everglades and can be reached at afarago@bellsouth.net

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
December 02, 2016
Friday - Sunday
John Pilger
The Coming War on China
Jeffrey St. Clair
Roaming Charges: The CIA’s Plots to Kill Castro
Paul Street
The Iron Heel at Home: Force Matters
Pam Martens - Russ Martens
Timberg’s Tale: Washington Post Reporter Spreads Blacklist of Independent Journalist Sites
Andrew Levine
Must We Now Rethink the Hillary Question? Absolutely, Not
Joshua Frank
CounterPunch as Russian Propagandists: the Washington Post’s Shallow Smear
David Rosen
The Return of HUAC?
Rob Urie
Race and Class in Trump’s America
Patrick Cockburn
Why Everything You’ve Read About Syria and Iraq Could be Wrong
Caroline Hurley
Anatomy of a Nationalist
Ayesha Khan
A Muslim Woman’s Reflections on Trump’s Misogyny
Michael Hudson – Steve Keen
Rebel Economists on the Historical Path to a Global Recovery
Russell Mokhiber
Sanders Single Payer and Death by Democrat
Roger Harris
The Triumph of Trump and the Specter of Fascism
Steve Horn
Donald Trump’s Swamp: Meet Ten Potential Energy and Climate Cabinet Picks and the Pickers
Louis Proyect
Deepening Contradictions: Identity Politics and Steelworkers
Ralph Nader
Trump and His Betraying Makeover
Stephen Kimber
The Media’s Abysmal Coverage of Castro’s Death
Dan Bacher
WSPA: The West’s Most Powerful Corporate Lobbying Group
Nile Bowie
Will Trump backpedal on the Trans-Pacific Partnership?
Ron Ridenour
Fidel’s Death Brings Forth Great and Sad Memories
Missy Comley Beattie
By Invitation Only
Fred Gardner
Sword of Damocles: Pot Partisans Fear Trump’s DOJ
Renee Parsons
Obama and Propornot
Dean Baker
Cash and Carrier: Trump and Pence Put on a Show
Jack Rasmus
Taming Trump: From Faux Left to Faux Right Populism
Ron Jacobs
Selling Racism—A Lesson From Pretoria
Julian Vigo
The Hijos of Buenos Aires:  When Identity is Political
Subcomandante Insurgente Galeano
By Way of Prologue: On How We Arrived at the Watchtower and What We Saw from There
Dave Lindorff
Is Trump’s Idea To Fix the ‘Rigged System’ by Appointing Crooks Who’ve Played It?
Aidan O'Brien
Fidel and Spain: A Tale of Right and Wrong
Carol Dansereau
Stop Groveling! How to Thwart Trump and Save the World
Kim Nicolini
Moonlight, The Movie
Evan Jones
Behind GE’s Takeover of Alstom Energy
James A Haught
White Evangelicals are Fading, Powerful, Baffling
Barbara Moroncini
Protests and Their Others
Joseph Natoli
The Winds at Their Backs
Cesar Chelala
Poverty is Not Only an Ignored Word
David Swanson
75 Years of Pearl Harbor Lies
Alex Jensen
The Great Deceleration
Nyla Ali Khan
When Faith is the Legacy of One’s Upbringing
Gilbert Mercier
Trump Win: Paradigm Shift or Status Quo?
Stephen Martin
From ‘Too Big to Fail’ to ‘Too Big to Lie’: the End Game of Corporatist Globalization.
Charles R. Larson
Review: Emma Jane Kirby’s “The Optician of Lampedusa”
David Yearsley
Haydn Seek With Hsu
FacebookTwitterGoogle+RedditEmail