Sometimes I get the feeling that the world has turned upside down. Especially lately.
I feel that either I don't get it or maybe bad is good and good is bad. When I first found something that was peculiar, I thought maybe I had misunderstood what I heard, and let it pass. The second time I found the world a bit out of sorts, I chalked it up to global warming, even though I was shoveling the snow at my house by a lake where it never snows in the month of March, or hardly ever. The third time it happened, I knew it wasn't me. Something was up!
The world is in turmoil from the financial downturn, but our nation is in disarray because it appears to have lost its Judeo Christian roots, resulting in the moral and ethical compass pointing due north while facing south. There are countless examples of what I am talking about but I will concentrate on three major categories: the mortgage arena, the business atmosphere and the basic way we conduct our governmental rules and procedures. If this doesn't move to unnerve you then it must be that my bearings are off.
Who knew that after a major financial setback, our government would be concerned with those who, for the most part, were part of the problem and literally throw only crumbs to those who were steadfastly trying to do the right thing. Unimaginable, but true!
Those who got into trouble because they over reached, cheated, or simply took the expedient way out when it came to the mortgage on their house, are being lead by the hand to the promise land of a new beginning. May I note here that not everyone who has lost their house through foreclosure, or is in serious trouble with their mortgage, falls into the above categories. Many were hit with another catastrophe, the loss of their job, an accident or illness, that made it impossible to hold on.
When the current administration came out with their mortgage bailout plan, it detailed the plans for those facing foreclosure and those drastically behind in their payments over a number of pages, while outlining the details of a plan to help those not behind in their payments, but were simply unable to refinance because of the real estate market actions, in three or four paragraphs. Those who are behind can have their mortgage reduced, their interest rate reduced and the term of their mortgage extended as long as they are holders of conforming loans. It doesn't matter how much over the current value of the house these borrowers owe because the government will pay off the mortgage to reach certain levels. Not so for those who stayed and paid. 105% of the value of the house is the limit that the government will help with refinancing the mortgage. The sentiment of the populace who did the right thing is "why did we do it? We would have been better off to not make the payments!" Is this the lesson we learned from the history of our beloved country that we wish to pass on? Who came up with these plans?
When it comes to the general business of the country, we are now directed to the notion that the employer, the risk taker, is the villain, and the employee deserves not only the credit for the enterprise, but also the cash. We are to learn to love the workers and cast a weary eye at the employers. Can you possibly build the nation's business by impeding the employer while applauding the employee? May I again state that not every employer is great, benevolent, forward seeing and the type of person we all have admired over the years, nor is every employee or even the vast majority of employees slackers and uninterested in the welfare of the enterprise. What bothers me most is the underlying disdain I am hearing about capitalism. I turned on one of the financial stations last week and heard my own congressman talking about the possible end of capitalism in America. I, for one, believe we could not be where we are today without the capitalistic business model.
This takes me to the government of our great country. When did it become fashionable in the Congress and Senate to simply pass laws and ratify budgets that were unread by the members of these great institutions and voted on because they were either instructed or coerced to pass said laws and/or budgets. After passing these instruments without knowledge or concern, these esteemed bodies banded together and attacked businesses and business leaders who were the recipients of these budgets. All of a sudden the politicos were concerned with nickel and dimes after the dollars escaped by the billions. Why the outrage at this time: political expediency? They were going to show their constituents they had their eye on the ball. The fact, as it turned out, that they had gone after the wrong players in the AIG fiasco was irrelevant. The real relevant point is why were they doing this at all?
How can you err by omission and commission at the same time? Who could have known?
We are considering, as a nation, to change the rules in the middle of the game as we have done before in the mortgage market and the financial markets. We have made it nearly impossible for self employed people to get mortgage loans. These are the very people who have always been able to qualify for loans, but not after the rules changed in December of last year. We changed the up tick rule for short selling, which did unbelievable damage to the markets at the worst possible time, for reasons that are still unknown. Now we are considering changing the secret ballot, a cornerstone of our democracy, in all elections to decide whether employees wish to have a union in businesses with 10 employees or more. Why? Did the secret ballot fail us over the years? Is our nation less than it could be because we steadfastly stuck with the secret ballot? I have my feeling about this change and I am sure you have yours. The big question is why would we do this and do we stop with just this type of election?
It is certainly time for everyone to wake up and find out what is happening in this country.
Are you aware of all that is happening in front of the cameras and behind them? Now is the time to figure out which direction this nation is heading and whether you believe it is the way you would like to go. If we don't try to ascertain what is going on now, then one day we might all be saying "who knew?"
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.