The Redistribution of Wealth by Subsidizing Urban Mortgage Debt. Raise Taxes!

Karl Marx’s maxims[1] are assembled in the general notion that there was always an eternal battle between those with property and wealth and the ‘poor’ and this defined his class struggle politics and has prompted the search for ways to spread around the wealth among the nations. There can be no dispute that there are rich and poor and always have been at odds; only the remedy is in question. The efforts of the Leninists, Marxists and other variants of the far left, as mirrored by the Terror of the French Revolution, were not successful as most of ‘revolutions’ were spontaneously ignited in peasant environments while being summarily crushed in the indicated industrialized countries. This initial outcome argued against the basic Marxian precept that the proletariat can conquer capitalism and run industries while returning the excess [profits] to the workers and other peoples. That concept has not been demonstrated as yet. While Russia seemed to respond to the surge, modulated by World War I, Germany and Italy and later Spain halted the wild rush forward to grab property and industrial production and give them ‘to the people.’ Dedicated revolutionaries like Rosa Luxemburg^[2],[3]  and her political allies attempted to grab as much as they could before they were murdered.^[4] Counter revolutionaries from the socialist wings of Italy, Germany and Spain [erroneously labeled as right wing] wrestled control from the Bolsheviks in the streets and restricted Marxism to the peasant world. There, the corpse of revolutionary Marxism lies today.

But, since the ‘problem’ of equal outcomes has not been materialized by any mechanism, we are faced with the ongoing search for solutions. Progressive taxation and confiscation of most private property[5] and inheritances remain about the only ways to level the wealth in most industrialized countries to date. Marxism morphed into ‘socialism’ at the behest of many like Bernard Shaw, but even the peaceful Fabians could not ‘talk’ the wealthy into voluntarily sharing their profits and loot with the masses.

The theories of anti-capitalism are snarled by history, disputes over the extent of private property that would be allowed, the role of collectivization of agriculture and later redactions.[6] The net result was the Russian Revolution and the rise of the ‘right’ to counterbalance the errors of the left. Today, this theatre is played upon the stage of modern communication with pleas for assistance for the poor and such.

The results of Marxian revolutions, however, are clearly recorded by history with unparalleled murder, corruption and failure. We can clearly inspect the results of the last 200-300 Marxist dictatorships in Africa and note that they have resorted to tribalism in nearly all cases in order to grab wealth while ignoring even the most remote precepts of socialism. This mentality, mirrored in New Orleans, Baltimore and Detroit, is the current expectation when unbridled left-liberalism is allowed to infect any society. The murder rate soars as the tolerance of drug addiction increases by the left. Let us all feel good—no matter the cost. The low-class phenomenon is currently exemplified by Jesse Jackson[7] and Kamau Kambon [“…exterminate white people off the face of the planet [8] Racism is the most important aspect of leftist politics.

The history of the far left is ugly and defenseless, but the notion that they had the ‘correct view’ of how wealth should be distributed has remained firm in their thoughts. The desired outcome in many cities and countries is not that the outcome of the confiscation of wealth should result in a viable economic society—rather the physical act of confiscating property and political power by any means is justified by the desirable outcome. The leftists still hold that view.  They feel good about wrecking economies. It is proper in the warped logic of the far left that if the capitalists crash along with the rest of society that is okay  as long as their money and wealth are destroyed. Revolution and confiscation of property didn’t work yet, but we can still keep trying until we get to the solution. We can see all this in the outcomes of the Great Society, War on Poverty, revolutions in Cuba, etc: failure.

From the Manifesto:

“The distinguishing feature of communism is not the abolition of property

generally, but the abolition of bourgeois property. But modern bourgeois

private property is the final and most complete expression of the system of

producing and appropriating products that is based on class antagonisms, on

the exploitation of the many by the few.”[9]

The difficulties with the unsophisticated and political property divisions among the peoples resemble the problem of Ockham’s razor[10] where we know that the masses cannot generate sufficient goods and services to form a decent society so there must be controls on how the profits are used. They don’t have the skills. This is not a simple issue and given the pyramid system [e.g. Bell Curve[11]] of the distribution of cognitive skills and talents in the world, the ‘average’ person, and certainly those on the bottom of the intelligence ladder, cannot accomplish the tasks. They will fail. If we rely on the notions of egalitarianism where leftist leaders have professed ‘concern’ for the masses then we need to ask the left to explain the Khmer Rouge, The Great Leap Forward, numerous African Marxist Dictatorships, Islamo-Fascism and others. There is no regard for the very poor in any of these cases.  The left will not apologize for the 100,000,000 dead in the last century due to Marxism. They seem to have no history. The poor starved in those times or were crushed by military machines, as they do today, under these systems as they do today in North Korea and the Sudan today. Tribalism remains the strongest societal force in Africa and the Middle East today and given the opportunity, most of the tribal types would massacre their fraternal enemies because they know that their counterparts would do the same if the power fell to them. The cognitively mediocre cannot perform even the basic tasks of society beyond the hunter-gatherer level. They can grunt and grab but not set up a vibrant business. History shows this clearly.

So, the quest for wealth grinds forward by the left as they cannot form a decent society by themselves. Every time they make an attempt, they fail or create some showcase state with major defects [Sweden, in the dirty gun business for 200 years while telling the world they were ‘neutral’ or the case of Switzerland, in the dirty money business, where they shelter the loot of dictators and despots.] and the phony Soviet Showcase of Cuba.

Of the many schemes to spread around the wealth, one of the most recent is the strange notion of private home ownership by the lower classes of our society. Somewhere, the criterion of home ownership, the fulcrum of the American Dream, have been diluted or ignored so that ‘everybody’ is entitled to have a house. This must be some new ‘right.’ This notion is so foolish as to be refuted by the simple observation that many people cannot even get past high school, mandatory since 1960. A full 15% of our society are felons, drug addicts, in jail, on welfare or suffer from a myriad of mental disorders, but, we learn, these people deserve to own their own homes. Now, ignoring credit ratings and earnings potential, refuted and made obsolete by political organizations like Greenling Institute[12] here, the usual criteria for property owners in terms of loans was trashed for political reasons.

The Bell Curve findings clearly refute the notion that everybody is ‘equal’ or even deserve ‘equal outcomes’ and this fraud was forced upon banks and lending institutions to the point where anybody could get a loan, particularly if they were minorities. Bad credit ratings, drug addiction, jail histories and worse were hidden from banks and such and the inevitable occurred: many people could not afford their own homes or could not even approximate the average citizen who could afford one. We saw drug addicts, felons, welfare recipients, illegal aliens and others given homes with very low interest mortgages and they defaulted. We are surprised?

But, where is the American Dream and who should pay for it? The answer is that those who defaulted on their loans for any reason must be rescued by the taxpayers. Thus we have the expected:

You deserve a home and the ‘rich’ will pay for one for you. It is your ‘right.’ Vote for us.

Today, the New York Times—aka the Walter Duranty Papers[13]--cobbles up a solution to the problem of redistribution of wealth veiled in sorrow, repressed hate and more in this article:

“Mortgage rates are rising because of the troubles at the loan finance giants Fannie Mae and Freddie Mac, threatening to deal another blow to the faltering housing market.” [14]Woes Afflicting Mortgage Giants Raise Loan Rates By Vikas Bajaj Published: July 23, 2008

Really? Who would have thought?

“Loan rates are rising because of concern in the financial markets about the future of Fannie Mae and Freddie Mac, which own or guarantee nearly half of the nation’s $12 trillion mortgage market. The federal government has proposed a rescue, and has urged Congress to approve it quickly.”

This FM and FM organizations were a stupid idea from the New Deal FDR Era and was used as a dumping ground for bad loans. Banks could dump questionable mortgages on the government because they were allowed to and this sorry situation was created by the government in the first place. This is the expected political solution and looks like Social Security: They are going broke.

No matter, the leftist concern is how to make the taxpayer pay for this mess and allow the low class to keep their homes at all cost. That makes political sense so damn the economics.

“For borrowers with a $400,000 loan, such a jump could send their monthly payments to $2,338 from $1,417, estimates Louis S. Barnes, a mortgage broker at Boulder West Financial in Boulder, Colo.”

This is astonishing. We learn, from the Times, that interest rate changes might affect mortgage payments! Economics has been advanced by this. We are so proud.

Look at this:

“While mortgage rates approached these levels earlier this year and in 2007 during times of stress in the financial markets, the latest move adds urgency to the government’s efforts to restore confidence in Fannie Mae and Freddie Mac. Lawmakers are expected to vote this week on a measure that would give the Treasury Department authority to lend more money to the companies and buy shares in them if they falter.”

So, the US Treasury might have to buy up shares in a mismanaged quasi-government corporation and stick the taxpayers with the bill. That subsidizes failure, as the left always advises.

The main idea here is that the victims of the left need more taxes and, since only the top half pay any taxes at all, we can just tax them and give the proceeds to the ‘poor’ for their votes and all will be well. Fannie Mae is just another leftist tax-whoring cluster that was headed by incompetents or just incompetents and money-hungry bureaucrats like Franklin D. Raines.[15]

Having the Treasury pick up devalued shares in these phony agencies points to a potential debt liability of some 5 trillion dollars. We know who pays taxes and who does not. It should be clear that if people default on their loans and are drug addicts, incompetents, or for any reason  that they can do it again!

Such is the ongoing grunting and grabbing of wealth by the left.

Our economy is very close to collapse and the left-liberals are waiting like vultures to tax what is left and institute more phony social programs like Fannie Mae and Social Security, Socialized Medicine and worse.

And, somehow these parasites stay in power. Vote accordingly.

rycK

Comments to: ryckki@gmail.com

The Babbling Brooks of the NYT Babbles about Debt and Blame but Offers No Solution.

As we read the NYT—aka the Walter Duranty Papers[1]-- we look for new ideas from various   leftist perches. Problems must be solved by government as we know. Always replete with noisy praise and grand salutations for some misguided person’s replastered precept of socialism that must be summarily incorporated into our society with great haste and song, we must follow the clarion calls, hear the trumpets ring and scrounge for suitable social solutions for problems.   Taxes are the way. Such solutions are supplied daily by the New York Times. There is always some pressing grave threat to society than can be handily solved with a good stiff tax increase. We are recurrently offered detailed analyses of:  how we were steered into this swamp by capitalism, how the tax increase opportunity that will hoist us from the communal latrines, and, how we learn, anew, about the basics and root causes of our societal problems. Liberalism always provides a solution.  Capitalism and private property are always the culprits. Such is the mission and mantra of the Times and, today, our BabblingBrooks[2] examines the mechanism of credit abuse and offers us an explanation.

Frequently, the lessons learned from a narrow analysis of the actions and antics of a few persons can be extrapolated beyond the usual horizons of reason and geography and supply us with sober coaching for necessary change. Thus, the Old Gray Lady[3] offers us the best path forward. The instant case in point here is demonstrated with some video about the sad case of Diane McLeod [4] about the [mis]use of money. She solved her problems with credit cards starting in 1996. The ensuing (and unexpected?)debt she created, the mental stress and mandatory shopping was used as  a palliative. She could not pay off her cards after a time, but she felt better.  So, she rolled her debts into her home equity. From market value of her home was rising from $135,000 to $ 228, ooo she had equity to burn.  Shopping was the solution to her problems and she solved them neatly. Her home was later foreclosed with all the pomp and circumstance of a sheriff’s sale. Nobody bought her place; she now has an eviction notice. She cried.

Now, who can we blame here as blame must be placed?

According to Brooks:

“On the front page of Sunday’s Times, Gretchen Morgenson described Diane McLeod’s spiral into indebtedness, and now a debate has erupted over who is to blame.”[5]-- The Culture of Debt by David Brooks July 22, 2008. [Emphasis is mine in all quotes.]

What else?  No liberals can be blamed here. We are offered these possible choices of the reasons from the hackneyed list:

[1] Predatory lenders, the evil scrooges of capitalism.

[2] McLeod’s lack of responsibility and handling of her financial matters.

[3] A third position [and novel] begins with the notion that people are driven by the desire to earn the respect of their fellows.

The first two items seem to fall into some categories that might be influenced by reason, education and self control. But, in the third novel proposition ‘respect’ is a great leap backward in social science. One might assume that earning your own living and building a nice life f or yourself and family with property and vacations might gain some respect. Not necessarily so.

As to the predatory lender argument we read:

“In short, these predatory companies swooped down on a vulnerable woman, took what they could and left her careening toward bankruptcy.”

There outta be a law!

On the second point we read:

“Free societies depend on individual choice and responsibility, those in this camp argue. People have to be held accountable for their indulgences or there is no justice. As McLeod herself admirably told Morgenson: “I regret not dealing with my emotions instead of just shopping.”

Now, that sounds like sound advice. The salient question here, not addressed by the maudlin ones, the red-wine-and-uppers druggie crowds and social preceptors is this: what happens to society if there is no responsibility for choices and actions? Not discussed here, the point is mute as the need to whine and blame transcends reason and gets votes. Regrets cannot reverse poor decisions.  There must be a recompense to lack of respect, and that must involve government regulations and/or taxes.

Now, new ground is broken!

“If you go to the online comment section affixed to Morgenson’s article, you see advocates of these two positions talking past one another, one side talking the morality of social protection and the other the morality of personal responsibility.”

Gee, they just won’t listen! How sad. They need to be reeducated. The extrapolation is now revealed by Brooks!!

“According to this view, what happened to McLeod, and the nation’s financial system, is part of a larger social story. America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded.”

Woe is us!

“And now the reckoning has come. The turn in the market punishes many of those seduced by financial temptations. (Sometimes capitalism undermines the Puritan virtues, but sometimes it reinforces them.)”

So, what do we do?? How about we fix prices as FDR did and solve this problem? Let us repeals the laws of supply and demand and that will fix it!

“But the important shifts will be private, as people and communities learn and adopt different social standards. After the Depression, a savings mentality set in. After the dot-com bubble, a bit of sobriety hit Silicon Valley. Now it’s the borrowers’ and lenders’ turn. As the saying goes: People don’t change when they see the light. They change when they feel the heat.”

Frogs do not if the temperature changes slowly we are advised. Nothing in Silicon Valley was ever related to sobriety. They earned their profits and shut out the suckers.

Were we suddenly dropped on the sidewalk here? What do we do? Do we subsidize the debts of the irresponsible for their votes or not?  What about Greenling[6]? Wasn’t that a different social standard? Can’t we just forgive the debts of those who deserve some property? This is even more important if they vote for Democrats for their unearned gifts.  Should we hike taxes on lenders or given them ‘sensitivity’ courses so they can identify and not loan money to mental misfits or dead beats? Shall we put limits on credit cards? Should the government inspect shopping profiles and home expenses and issue summons to courts or force the financially reckless to take courses in home economy? We can buy back some respect for her with a good tax hike. It is amazing what remarkable things happen with hefty tax hikes.

Do we need the IRS to expand into the Credit Inspection and Certification Service?

Missing here is the oblivious: A command economy like the USSR and improvements upon the theme as we saw from the Cambodians is the obvious answer. Nobody there died in debt. We can control credit and debt!  Did we ever hear of a Russian peasant in bankruptcy?[7] The best goods and services in the New Russia were limited to the 4% party membership. Nobody who celebrated the social splendor of the Khmer Rouge in Cambodia [8] ever went bankrupt or ate too much or bought frivolous goodies to appease their unhappiness. Apparently they had respect. They did get high praise from Noam Chomsky. They had little need for heart bypasses as well. No North Korean peasant ever died from the embarrassment of bankruptcy. There system is superior to ours in that respect.

This article just howls for this: The Brooks New Paradigm.

But, where is it? What do we do-- just ‘learn’ slowly and let things just happen as do goat droppings ripen in the sun?

The basis of liberalism is to showcase the losers and then create new way to force an ‘equal outcome’[9].  

From a previous essay:

“The very existence of citizens who have average wealth, above some arbitrary level, as defined by the left, of course, is necessary and sufficient proof of crimes against humanity such as economic violence, racism, starvation and worse.”-- Posted by rycK on Thursday, March 15, 2007.

There is nothing as unfair as noticing that the upper half of some average population has more wealth than those in the bottom half.  Mathematics is obviously capitalist and evil. This outrage begs for Fabianism [10] or Communism to ensure equal outcomes. Losers must be subsidized so that they can be ‘equal’ to those who live their lives according to their own standards and avoid bankruptcy, jail, sloth, sodomy, drug addiction and STDs. Taxation will cure this inequality! They need respect.  Let us raise taxes until there is respect for all.

The USSR broadcasted the ecstasy of highest saving rates in the world, about 15%, in the 60s to the 70s and into the 80s. They were proud of their citizen’s thrift. The fact that there was nothing to buy (unless you were in the Communist Party) had little to do with savings it seems. The later salient fact that the 1989-1990 inflation wiped out 99% of their savings when the Ruble collapsed [a quickie 1500% inflation must be some form of respect] is not an issue open for discussion in leftist matters. Blame Reagan for that. They carefully ‘educated’ their people for 74 years under the Soviet System and everything was wonderful. The West was a dung heap, the epitome of failure and pinnacle of poverty and the USSR abounded in social splendor. The KGB assured equality and tranquility in the land and there was peace.

What we need is a Credit Equality Respect and Normalization Act of Congress that would subsidize people who seem to drift away in their excessive or imprudent spending by socializing their debt. That is the New Paradigm! We can always hike taxes and fix little problems like bankruptcy especially if the victims are poor or Democrats or illegal aliens and vote accordingly.

We can now legislate respect and also support respect with the higher taxes.

rycK

Comments: ryckki@gmail.com