It is being reported today that 1 out of every 5 Americans are upside down in their homes right now. That means they owe more on the house than it is worth, so they can't even sell it to get out. If they run into payment problems, they will lose their life savings even if they file for bankruptcy, because Congress won't pass a law that allows Bankruptcy judges to adjust the principal to save the home.
These aren't just people who took sub-prime mortgages they couldn't afford. The horrid economy affects everyone. Many good and hard-working small business owners who bought their homes when they were making good money have been crushed and now can't pay their mortgages either.
Why are the mortgage lenders so special? Bankruptcy judges are permitted to adjust the terms of every other type of loan, but the lobby-rich bank and mortgage companies have their very own exception built into federal law.
So the existing state of the law is that if "you the people" get into financial trouble, you can go to hell. Going to lose your life savings? Suck it up, individual capitalists. Start over. Adversity builds character and is good for the soul, or something like that.
Unless you are a bank, mortgage company or car company. That tough guy, rugged individualist, pull yourself up by your own bootstraps American way of life doesn't apply to you. You are "too big to fail" even if the sleeping jackasses over at the Department of Justice Anti-Trust Unit are supposed to sue companies before they obtain so much market share they become "too big to fail."
Does anyone really believe any of the companies we've bailed out are "too big to fail?" They simply have friends in D.C. who are too big for us to stop them from bailing out their campaign donors.
None of those companies are so connected to the national interest that their demise would be the fall of America. That the Anti-Trust Unit never sued any of them over market share is either proof that they weren't too big to fail, or that the Anti-Trust Unit is the laziest bunch of lawyer-bureaucrats on the planet and they should all be fired.
What a disgusting reality: A taxpayer gut-punched by the economy is in foreclosure. Tough on him. The bank foreclosing on him gets gut-punched by the economy The government takes what little money the taxpayer has left, gives it to his bank under the TARP program, so the bank can continue the foreclosure against him using his own money.
What an insult to America's founding principle that people are important. They've been replaced on the importance scale by banks, as was the case in 1930's Italy and Germany. Smells like fodder for a new Revolution, not just a tea party.
In the first quarter of 2009 American home values have dropped $700 billion.
$700 Billion was the amount of the Bush TARP plan that recapitalized banks to continue foreclosures without recapitalizing the foreclosed homeowners.
$787 Billion is the amount of Obama's Stimulus plan, which does nothing to recapitalize the foreclosed taxpayer, instead taking his money and buying new cars for government bureaucrats and funding a Mafia Museum for Speaker Harry Reid in Nevada.
The net effect of Bush and Obama taking all that taxpayer money and giving it to government and big companies was that American home values have dropped $700 Billion in three months.
Nice job, Corporatist bastards. I hope they both fail.