From
2.27.2008
We
can relentlessly depend on the New York Times, the key propaganda arm[1]
of the far left to signal us, and their attendant stooges in the various
legislature across the land, to advise us when a novel form of taxation is
possible. In today’s preposterous dissertation, we read that there is some new
debt burden issue in ownership of private property that needs to be
adjudicated. The usual leftist intrinsic bias against private property [2]is
relaxed in rare cases when such antisocial behavior can be juxtaposed against
public ownership.[3] But in this case there are some new and
wonderful indirect taxes that can be levied upon the corporations at no
political cost! That is an indirect tax that the usual tax whores would not
have to express regrets about when election time rolls around. It doesn’t add
to the national debt. For that, the Times will go to the legislative mat. Soak
the capitalists!
The
wailing is noted in today’s new tax scheme screed: Getting Real About the Rescue [4]
The problem stated:
“Some big banks are supporting new proposals
to rescue homeowners who owe more on their mortgages than their houses are
worth, but let’s get one thing straight: the banks haven’t been struck by a
sudden urge to help the needy. Rather, by advocating bailouts, the lending industry is trying to head off a possible
change in the law that would let troubled borrowers modify their
mortgages in bankruptcy court — where lenders, not taxpayers, would be stuck
with the losses.”[5]
[Emphasis is mine in this and all following quotes.]
In
propaganda rants, this one gets a C+
as the basis for an urgent rescue is properly set up as is the social basis for
change, but the solution to is too cryptic and lacks the usual maudlin songs
and sobbing and arrives, too bluntly in my view, at the solution. An A rating on this would begin with
starving workers trying to experience the American Dream as they are living
their lives in their precious homes but starkly contrasted with the horrors of
seeing their meager possessions (and children) being summarily cast off into
the streets by officers of the law while greedy mortgage lenders are seen wheeling
away stacks of money. This one is a bit abrupt, but the leftist contents might
become important talking points in the upcoming election farces so let us plug
along and see how it unfolds. Capitalism is going to get whacked here; the
interest is in how the Times wants to veil it.
“Congress must
not kowtow to the lenders. It should insist that borrowers be given a
chance to modify their mortgages under bankruptcy court protection before it
even thinks of asking taxpayers to pick up the tab for the mortgage mess.”[6]
The
briar patch is now unraveled. Certain members of Congress are the stumbling
point. Here we learn that the lenders, presumably some part of our economy that
deals in capitalism with all its open markets replete with numerous buyers and
sellers should stand last in line in the Congressional legislation. They should
have no influence in the legislation. The little guy comes first. Note that the
blame and fault are now instantly placed upon the evil money lenders before the
solution is revealed in a bright and scented shower of fairness, sensitivity
and concern. The lenders must pay for the problem. Justice must be served.
“Under current law, borrowers cannot rework
the mortgages on primary homes in bankruptcy proceedings.”[7]
Ah,
the jaws of the Demon are exposed. The term rework
used here must have its political roots
planted in compassion, socialism and the eternal quest for votes for Democrats must
be embedded somewhere. This sentence, the gripper
passage that inflames the reader, implies that the law must be changed.
The warriors choose
sides in this battle:
“Senate Democratic leaders are pushing a bill to let
many at-risk homeowners do just that. The House Judiciary Committee has passed
a similar measure. Republicans, who are balking, should get on board, or risk
leaving their constituents without an effective way to save their homes.”[8]
This
reads like a Greek Tragedy as the stately home owners, through no fault of
their own, must seek the help of the gods for relief. The nasty old Republicans
stand in the way of Justice as she attempts to minister to her flock. Perhaps
their very eyes will adorn the peacock’s tail for this cruelty.
The details of the
Redistribution of Wealth and the Poisoned Apple:
“If the bankruptcy provision becomes law, as
it should, lenders will have a powerful incentive — which they currently do not
have — to modify troubled loans voluntarily. If they can’t or won’t come to new
terms with borrowers, then they would run the risk
that a bankruptcy court would do the modifying for them.”[9]
There
is some prize here proffered to the money lenders. They can take a loss on
their loans or they can have the government direct the loss on their loans.
This is given in the spirit of the French Revolution where you can have your
head roll into the basket after you have selected your favorite raison d'être from the list: Liberty
The political payoff:
“So far, despite a lot of promises, the
industry has been unable or unwilling to rework the junk loans of the bubble years
in ways that come near addressing the enormity of the problem. In contrast,
access to bankruptcy court would mean relief for some 600,000 homeowners — not
by wiping out their debts, but by modifying the loan terms so borrowers can
pay them off over time.”[10]
A
catchy slogan matching the notion that: “… all
the workers have to lose are their chains.” How poetic! Let us break out
into song and have the workers of the world unite.
The condemned raise a
point of order:
“Lenders object that by giving homeowners the right to modify their mortgages
under court supervision, the bankruptcy amendment would raise the cost of
mortgages for everyone, forever. That concern is surely overstated, but not
entirely without merit. To address it and other industry worries, lawmakers have proposed constraints, such as
limiting the bankruptcy relief to junk mortgages of the past few years.”[11]
We
must now wonder what a ‘junk mortgage’ might be and if this can be directly
compared to junk bonds or junk dealers or junkies. Do you buy a junk mortgage
with junk money? What could this mean? We are also blessed with a new
(Constitutional?) right—the right to modify corporate contracts if money is
lost. I would hope that we would have a similar ‘right’ to modify our tax
returns to correct some perceived injustices in federal government spending.
How about this: I will acknowledge my full tax liabilities if I can pay off my
accrued taxes at a dollar per year at zero interest.
A hint:
“The idea is that if lenders voluntarily
agree to loan modifications, they would become entitled to a share of the
house’s appreciation, if any, when the house is ultimately sold.”[12]
Who defines the
modifications? What share?
“Like other Bush
administration plans, this one suffers from its
emphasis on voluntary cooperation, which has been shown to be inadequate.
The bankruptcy amendment, however, would give lenders more incentive to go
along, by providing a real downside to not acting voluntarily — losing control to a bankruptcy judge.”
The
justice of the guillotine was not exactly voluntary in the same way that the options
to lose money on loans are not exactly voluntary in this case. This is a propagandistic
sentence that reveals no facts--only slogans and threats. If the wording is
vague in the ‘law’ then the bankruptcy judge
can act like Citizen Robespierre and just fill the baskets with heads using
vague reasons and barking the trendy explanations of the day. It is too bad that a fraction of our
tax liability is not voluntary.
This
amounts to a leftist mass groping of some business sector wealth. This is a classic
propaganda piece that always incorporates the predictable Retribution of Wealth
cliché. Once implemented, a person’s debts may now be adjudicated in some court
or by those who owe their jobs to the political machines. This is a form of
financial justice offered in democratic terms. The notions of risk and other
attributes of capitalism are crushed in this Marxian screed. There is no risk!
If you are some leftist parasite, a hopeless druggie, sexual predator who
cannot get a job or some felon you now buy a house, default in defiance of the
system, and somebody else will subsidize payments for you, enforced by federal
law. Here we are instructed that if any housing market turns down then those
who sold the products are liable for any loses encountered by the buyers. This
places a floor upon which money lost in market activities can be reclaimed
merely for the reasons that somebody lost money. I wonder if we could do this
at the race track and get a long-term refund for a misplaced bet on some three-legged
donkey that somehow missed the winner’s circle, the bright flowers and
applause.
No
essay from the New
York Times, the Walter Duranty Papers[13],
could offer more promises for less leftist political risk than this wreckage. This
is a freebee.
What
is missing here is the nasty effects of the predictable shortage in mortgage loans
if this monster becomes law. The lender can now voluntarily lose money, or he
can involuntarily lose money—a fair and level choice sanctioned by the
leftists. And, the little guy wins. Lenders might then unfairly scrutinize
future loans for deadbeats or marginal barrowers or find other ways to secure
their loan repayments. The political celebration here comes from a novel test
case where in the usual free enterprise arena the markets rise and fall, driven
by the expected supply and demand effects, but the socialists are now insisting
that any downside risk must be indemnified by somebody else. I am surprised
that the Democrats don’t want to establish some federal slush fund that
subsidizes loses in any home loans—no let us be generous and add in TVs, autos
and beer coolers—so we can have the nasty old capitalists redress for the Sins
of the Past. That would necessitate more taxes, so that is a bit tacky in an
election year.
I
anxiously await the NYT ‘solution’ to restoring lost union auto jobs in Michigan Michigan
I
want to be able to ‘rework’ my 401(k) so as to make it tax free. I don’t want
to kowtow to the tax mongers.
rycK
Comments: ryckki@gmail.com
[2] http://en.wikipedia.org/wiki/Karl_Marx.
which cites Marx, K. & Engels, F. (1848), The Communist Manifesto.
[3] Bernard Shaw by Michael Holroyd , Vols 1,2,3 , Random House, 1988
[4] Getting Real About the Rescue.
Editorial Published: February
27, 2008 . http://www.nytimes.com/2008/02/27/opinion/27wed1.html?_r=1&hp&oref=slogin
[5] Getting Real About the Rescue. Ibid.
[6] Getting Real About the Rescue. Ibid.
[7] Getting Real About the Rescue. Ibid.
[8] Getting Real About the Rescue. Ibid.
[9] Getting Real About the Rescue. Ibid.
[10] Getting Real About the Rescue. Ibid.
[11] Getting Real About the Rescue. Ibid.
[12] Getting Real About the Rescue. Ibid.
[13] In honor of the Communist
stooge who wrote lies about Stalin’s gulags and worse much to the eternal
applause of the NYT and other yellow rags
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