Changeling
In the news recently is the Obama plan to subsidize home mortgages. I keep seeing resentment from people that keep pointing out that these bad mortgages were taken out by foolish people, in essence bad people, selfish people. Many of these "bad mortgages" were taken out prior to Hurricane Katrina. Our society hasn't seemed to recognize this fact, but it was Hurricane Katrina that really marked the point of no return for the economy. Before Katrina (BK) it made a lot of sense to a lot of people to finance a gas-guzzling SUV and a fuel-hungry mega-home out in some sub development in the sprawl of any one of America's major cities. After Katrina (AK) there were a lot of people who began to slowly realize the foolishness of this kind of living, and especially began to realize that paying a premium price for this lifestyle was downright ignorant.
What brought on this change in perspective?
Katrina.
OK, so how?
Katrina impacted the housing market in two very significant ways.
First, it caused an immediate and very significant spike in the price of gasoline. That was when gasoline suddenly flew from around $2.50 a gallon to $3.50 a gallon. The price didn't stay up there but for the first time this century the cost of gasoline became a factor in our calculations of suburban sprawl. Could we really continue our SUV madness? Could we continue to imagine that we could live where we have no choice but to drive our steel shields dozens of miles whenever we wanted to do anything.
The second Katrina effect was a large increase in homeowners insurance along the Gulf Coast. Florida was significantly impacted by this. Homeowners insurance became a deciding factor for anyone on a budget and a major factor in calculating the value of a home.
We have short memories, but BK it was good to buy a home under nearly any circumstances. Our president encouraged an "ownership society." Credit of any kind at all was feeding the economy.
Now these people who have been impacted by the aftereffects of Katrina were foolish to mortgage these homes.
Same event. Same point in time. Same people. Same home. Same loan. Good judgment BK. Foolishness now.
What changed?
Well you see, back BK, wealthy investors were making tons of money in this market. Now to save these mortgages, to rescue home values, to keep people from becoming homeless, the wealthy are being asked to support future taxes to provide relief now.
BK, money coming in to the bank accounts of the wealthy.
AK, future taxation of the wealthy to blunt the impact of this foolishness.
And since the wealthy never take responsibility for the impact of their speculation, the blame must be assigned to the people who (wisely BK) foolishly took out these loans.
What brought on this change in perspective?
Katrina.
OK, so how?
Katrina impacted the housing market in two very significant ways.
First, it caused an immediate and very significant spike in the price of gasoline. That was when gasoline suddenly flew from around $2.50 a gallon to $3.50 a gallon. The price didn't stay up there but for the first time this century the cost of gasoline became a factor in our calculations of suburban sprawl. Could we really continue our SUV madness? Could we continue to imagine that we could live where we have no choice but to drive our steel shields dozens of miles whenever we wanted to do anything.
The second Katrina effect was a large increase in homeowners insurance along the Gulf Coast. Florida was significantly impacted by this. Homeowners insurance became a deciding factor for anyone on a budget and a major factor in calculating the value of a home.
We have short memories, but BK it was good to buy a home under nearly any circumstances. Our president encouraged an "ownership society." Credit of any kind at all was feeding the economy.
Now these people who have been impacted by the aftereffects of Katrina were foolish to mortgage these homes.
Same event. Same point in time. Same people. Same home. Same loan. Good judgment BK. Foolishness now.
What changed?
Well you see, back BK, wealthy investors were making tons of money in this market. Now to save these mortgages, to rescue home values, to keep people from becoming homeless, the wealthy are being asked to support future taxes to provide relief now.
BK, money coming in to the bank accounts of the wealthy.
AK, future taxation of the wealthy to blunt the impact of this foolishness.
And since the wealthy never take responsibility for the impact of their speculation, the blame must be assigned to the people who (wisely BK) foolishly took out these loans.
posted by Bill | 8:35 AM
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