Where is the moral outrage? Both presidential candidates are seeped with lobby money, one with a quasi Marxist agenda, the other with quasi free market agenda and both sleepwalking through a financial dilemma that attacks every property taxpayer and American.
Unqualified buyers were encouraged into mortgages, the root cause for the financial meltdown. Our financial subprime woes started with Jimmy Carter who, though well meaning, dumb-headed enacted legislation to encourage loans to people who were bad credit risks. Buying a home and paying property taxes was supposed to be the cure all for financial happiness and getting ahead. His administration began distancing itself from sound lending and accounting standards.
Along came Bill Clinton who put extra teeth in the law by punishing mortgage and investment companies that did not extend credit to people who were bad credit risks. He put them into houses they couldn’t afford let alone the property taxes on. A further deregulating and credit risk was encouraged by mortgage companies; those that didn’t comply to lose lending practices were hampered from expanding their footprint in the community.
Who bought these bogus high risk loans? Fannie Mae and Freddy Mac. They, furthermore, became haven for sending political contributions to politician encouraging this bad credit home ownership cancer to keep growing. Mortgage company lobbies’ threw hundreds of millions of dollars to politicians’ greed in order to perpetuate this circus even as residents of high-foreclosure neighborhoods suffered additional pain from high property taxes.
AIG and other insurance companies insured these loans. Their primary purpose is to evaluate and insure against debt risk. Their leverage was set at 12 to 1 meaning that they had to have one dollar in assets to cover 12 dollars or risk. They threw millions of lobby money to leveraging its recirculation rate at a reserve rate of more than 30-1. With such a high-risk and profit expansion levels, any big bump in real estate valuation put those assets at risk.
How can fraudulent financial wizardry that has banks and brokerage firms leveraged at 30-1 be endorsed by Greenspan and Bernanke? How could they have allowed this shell game to continue? Quasi-Marxist promoters of Acorn (Association of Community Organizations for Reform Now) and similar entitlement steering organizations bamboozled lawmakers into giving away the farm. What’s wrong with renting if you can’t afford a house or taking a bus if you can’t afford keeping a car?
The House Finance Chief, SEC Chairman, Banking Committee Chairman and any Congressman or public official accepting lobby money were shills for this cancer. Prison and banishment from public office should be their reward for violating the public trust! Politicians accepting lobby money need prison and banished from public office. Lobby money is a bribe. If you bribe a cop for not giving you a speeding ticket you go to jail. If a public official accepts a bribe, shouldn’t they be put in jail as well?
A balloon full of hot air eventually has to crash. Instead of letting the markets sort this out, bailout is the new mantra. The global credit boom is OVER. Throwing out 700 billion dollar band aids laden with lobby inspired pork on a problem is meaningless. There is little the Fed or Congress can do to change it. Thanks to the weasels the Emperor has no clothes. The danger of ignoring economic realities is how we ended in this financial crisis. Where is the outrage?
Lower real estate prices has many towns raising tax rates to compensate for lower assessments. If you compare your home’s value to comparative values of recently sold homes there is a good chance you qualify for a property taxes appeal. At least, you should look into whether you have a case.