“WASHINGTON — Ten months after the Obama administration began pressing lenders to do more to prevent foreclosures, many struggling homeowners are holding up their end of the bargain but still find themselves rejected, and some are even having their homes sold out from under them without notice.”
This lead from a December 17th McClatchy Newspapers article might appear to reaffirm every Conservative belief you have, but to this writer it is more proof that the days of free enterprise and initiative in America are on the wane, and the decline is only accelerating as we head (stalling and belching smoke) into the second decade of the 21st century.
I hate to say it, but the Democrats have a perfect strategy for staying in power, and unless something transformational happens, in the end they will win the battle for this country – even if their victory means ultimate defeat for the great idea that was the U.S.A.
Why would an item about the inefficiency of the Federal Government as it relates to the foreclosure crisis be anything but a talking point for the minority party in Congress? Isn’t it great news that the bureaucrats are proving once again that anything managed by Uncle Sam (The Post Office) is nothing but cut-rate and slovenly compared to what a private company can put together? (Fed Ex, UPS.)
Well, no. I will give you an example pulled straight from the annals of “real life” and I will do so with none of the exaggeration I usually employ to get a point across. (As impossible as that might sound!)
I work with a lady who used to be our AZ Human Resources director, but is now a regular ol’ bill collector…in fact when we had our big layoff over a year ago, we originally let her go completely. But she came back as a commissioned employee three months after we sent her packing (brutal, but cuts like this saved the company) because she was unable to find any sort of job in the world of corporate personnel. She had been subsisting on unemployment, which was far less than what she had made in her old job, and so she figured if she couldn’t get what she wanted, she would at least get a job with upside (low base salary, high earning potential).
The problem was she was already struggling financially, because like much of our citizenry, she seemed to spend more than she earned, and it didn’t help that she had two little kids, and that her husband didn’t have the greatest job. (Although he was trying to better himself by working full time and going to school.)
So after several months of markedly decreased income, it got to the point where she either had to let her house go or try to find a way to strike a deal with her bank to modify her loan. The catch was, in order the get the best possible arrangement, she had to opt for President Obama’s Help for Homeowners plan, because there is no conceivable way the bank itself can match a program that is loaded with cash and incentives that go directly to that same financial institution, and also to the customer.
When someone is in our former H.R. Directors’ shoes, it doesn’t really matter if the likelihood of her actually getting the modification is good or not – it’s the only accommodation she has a chance of aspiring to, and desperate people have a tendency to latch on to whatever hope is available.
Which brings me to the main point here:
When people have a way out available to them, they will take it every time. You can be the biggest Libertarian who ever lived, but if it means a roof over the head of your family, forget the credo – let’s please not be doctrinaire about that.
Now do individuals “deserve” a way out when they made mistakes that largely put them in their upside-down situation?
Lots of us might say no – that one of the biggest problems with our “forgiving” society is that there are no incentives for individuals (or too big-to-fail companies) to be thrifty and make prudent decisions, because they will always bailed out in one way or another.
My take is that it is quite OK for private concerns and investors to let people off the hook by re-negotiating the terms of a contract– it is a natural part of doing business – it’s why banks settle debt for cents on the dollar, and shoe stores sell merchandise for less than cost when they can’t move it – because it is better to get something than nothing.
The Democrats cynically understand that if they are to wield power, the best way to do so is to interfere with this process, and if they can get more and more people to come looking for the swag they have to offer, with terms that destroy all potential competition (who prints the money and makes the laws, after all?) then they will have put themselves in a position where more people than not will be at their beck and call.
Forget what this means long-term for our economy and for personal initiative.
Just remember the picture and the caption underneath it: