Housing musings -- and a rant
We're entering one of those periods where the mainstream media swarms over the housing bubble.
It happens now and then, at unpredictable intervals, "pegged" to some proximate event — a phenomenon I noted eleven months ago at my former online home.
The proximate event this time is the acknowledgment late yesterday by Countrywide Financial that even above-prime borrowers are getting into trouble. The New York Times saw fit to play this up prominently on its website, which is probably the reason the first thing viewers saw on NBC's Today show was a bunch of "For Sale" signs in front of houses. I didn't stick around long enough to see if this was in fact the big topic after the news summary, but I assume it was, and Today's choice of topic for the first half hour is as good a measurement as any of both where the media's collective head is, as well as that of the wider public. Drudge had a bunch of housing-related links this morning as well.
The scapegoating process is underway in earnest (a phenomenon Mish Shedlock noted earlier this month), and most of the blame, alas, is misdirected. Naturally, politicians are targeting the lending industry, witness the half-baked proposal in Massachusetts to have lenders pony up moving expenses for everyone who gets foreclosed — plus first and last month's rent at the borrower's new home.
Of course it's a batty idea. But even most of those who know it's a batty idea misdirect the blame. Which brings us to the oafish bloviations of Neil Cavuto.
Well, I should back up a bit: For starters, it's worth noting his Fox News program went out of its way yesterday to play down the housing bust. (Usually he ignores it altogether, but seeing as it helped knock down the Dow more than 200 points and his program comes on as the market closes, it was had to avoid. Poor baby.)
But then we get to his fatuous closing commentary, in which rightly denounces bailout schemes — but then proceeds to effectively absolve lenders of all blame by saying it's the borrowers' fault:
Capitalism is about choices: You choose to take on a mortgage, you choose to accept the responsibility that comes with that mortgage, not hope that if things hit the fan, taxpayers will essentially rescue you from that mortgage.
What's next: Bail out the guy who can't pay his credit bills, or car payments, or student loans?
I don't mean to sound heartless.
I'm just more worried about elected officials who sound clueless.
(Can't you just see him at the computer after writing those final two lines, saying "Damn, I'm brilliant!")
Here's a clue, Neil: No one is blameless in this fiasco, but the final blame lies where you refuse to place it because that would impugn the reputations of government officials affiliated with the Republican Party. It's the Federal Reserve, Neil! It's the Fed, and Alan Greenspan, who instead of letting a recession wring out the excesses of the tech bubble chose to flood the economy with increasingly worthless money, torrents of it, which ended up flooding the housing market. But no, it's much easier to blame a hapless homebuyer, isn't it?