Arianna Huffington, on her website The Huffington Post today demanded, “It’s Time to Treat America’s Homeowners as Well as We’ve Been Treating Wall Street’s Bankers”. But is it?
As the Association of Community Organizations for Reform Now (ACORN) readies to launch a nationwide protest and will begin training thousands of people in civil disobedience as part of its “Home Defenders” campaign this weekend, the push for “Free Houses” looks to become a major issue in the coming weeks. The ACORN “Home Defenders” program has planned simultaneous events in New York, Los Angeles, Oakland, Houston, Orlando, Baltimore and Tucson where protester are refusing to move out of their homes despite foreclosures.
The line at the Bailout Soup Kitchen gets longer and longer, as both the revitalized TARP program and the expanded Auto Industry Bailout loom on the horizon, and numerous other industries come hat-in-hand to Washington D.C.
Most economists agree that the collapse of the US Financial System can be rooted to the wide proliferation of defaulting sub-prime home mortgages, which had been packaged together in inherently risky financial products and traded between the biggest firms worldwide. Since this meltdown started in earnest in September of 2008, the increase of foreclosures and loans in threat of default have risen to unprecedented levels.
ACORN, a group that President Obama worked closely with in his community organizing days in Chicago, has been a leading proponent of the “Fairness In Lending” and “Tenants Rights” movements, and in fact has had profound nationwide and localized influence in the increase of sub-prime home mortgages that banks approved, including using political and legal extortion to force lending institutions to lower their credit standards.
Ethically, we must ask ourselves, what sort of measures can the Obama Administration and Democratic Congress actually take that won’t be unfairly slanted to persons in the process or threatened with being in the process of foreclosure now, when so many foreclosures have already taken place? The “bad bank” for toxic assets that seemed to be the plan that Treasury Secretary Timothy Geithner was leaning towards has now been apparently scrapped, so how will the purported $50billion for home-owner relief in the recently passed and soon to be signed Stimulus Bill be administered?
Even if the flood of foreclosures and ensuing chaos can be sealed off, what about all the people who have already lost their homes? What about the people who lived within their means and satisfied their debts? What about all the people who have lost the entirety of their savings and retirement nest-eggs due to the overwhelming collapse of the US Financial Market caused by all the subprime borrowers who negligently duped lenders, and now tax payers, to subsidize their lifestyles?
The central core issue here, even beyond just the subprime borrowers, were the millions of Americans who used their homes as ATM’s, taking out second and third mortgages, buying consumer goods on credit, spending lavishly and saving nothing, and when the economy took a downturn, cannot satisfy their contractual financial obligations. Why do they get a bailout?
The behavior of the average American, no matter their level of the economic strata, contributed to the expansion and burst of the US Housing Bubble. The few responsible Americans, the handfuls that were responsible and lived within their means, are going to end up equally shouldering the burden all of the people who relished the time of “irrational exhuberance” and destroyed not only the US Economy, but the Worldwide Economic System.
All those questions, if improperly handled by the Obama Administration and Democratic-Majority Congress, could be an igniting point in what is already a simmering firestorm in this Country and Economy. The Systemic Risk to this country and out way of life has never been greater as we approach this problem. The defining point of achieving a full-scale command socialist economy or reverting to the free-market capitalism the USA has always advocated and been the bright-and-shining-light of has never been in a more tenuous position as it stands today.
*This was originally published February 17, 2009 on the Yahoo Contributor Network