The Hypocrisy of the Traders’ Revolt


By Joe Campbell
February 19th, 2009


 

[Click image for larger version.]

Matt Drudge seems to be cheering the call for a ‘Tea Party’ and other civil disobedience in opposition to Obama’s proposed mortgage plan.

ABCNews describes the plan as “help [for] up to 9 million homeowners facing foreclosure or struggling to make their mortgage payments.”

The plan seeks to help two groups of people as described by ABCNews:

  • First, some 4 million to 5 million families who have seen their home values drop, but are not at risk of foreclosure, would now be able to refinance into new mortgages.
  • The other group, 3 million to 4 million homeowners with adjustable-rate mortgages, would be able to temporarily have their loans modified to a lower interest rate – for at least five years.

In order to accomplish this, Obama is proposing that $100 billion be given to Fannie Mae and Freddie Mac to allow these groups to refinance the loans for those whose home values have dropped below what they owe.

For the second group, Obama is propsing that $75 billion be used to help those with predatory loans temporarily modified to a lower rate. That’s a total of $175 billion. The plan doesn’t yet have a complete budget, but these are the basics and the largest elements.

The response being promoted by Drudge and CNBC:

The government is promoting bad behavior… do we really want to subsidize the losers’ mortgagesThis is America! How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening? How about we all stop paying our mortgage! It’s a moral hazard…

My emphases above. Am I the only one who finds it incredible that CNBC and financial traders are talking about civil disobedience and moral hazard and “losers” as soon as Obama proposes a $175 billion plan to directly help about 9 million Americans? Yet these same people assured us that bailing out the banks to the tune of $700 billion was necessary for financial stability – and that plan directly helped how many?

What the fuck is wrong with these people?

Edit: Apparently, the trader explained that “The trading floor is a pretty good cross section of America” as part of his justification. And of course, it’s better to help this “pretty good cross section” of rich America than to help an actual cross section of the population.

Edit again: A commenter over at reddit says that the particular CNBC host in the clip has actually been calling on mobs to go after any CEOs who take the TARP bailout money too. That removes the charge of hypocrisy from him, although not from those others who supported the bailout out to Wall Street but complain about any funds being used to fix the mortgage situation. And it still leaves the CNBC anchor, Dylan Ratigan, open to charges of pure stupidity.

Also @ 2parse

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8 Responses to “The Hypocrisy of the Traders’ Revolt”

  1. Frank Says:

    I think its cheaper to help homeowners than allow them to forclose. If someone is 100k underwater, by the time its over with sales and reconditioning expenses it could easily be 150 k upside down, So if they modify terms at a cost of 50 or 100k, and the borrowers stays, keeps paying taxes, no vacant house, market stabilized, why not?

    Also, many are mad at the idea of helping little people, but cheer trillions for banks and corporations, Many think millions in bonuses for failed bankers and CEOs is fine, even at taxpayer expense, but workers should take cuts, those greedy evil workers who want a decent wage and benefits

  2. Jeffrey Henderson Says:

    Sorry Frank, you can’t stabilize markets by printing money.

  3. Joe Campbell Says:

    Is that supposed to be an argument Jeffrey? You can do better than that.

  4. Jeffrey Henderson Says:

    @Joe

    Do you really need to go deeper than that? It’s a pretty simple concept.

    Printing money and creating massive debts is what caused the bubble and the blow out. This is how the central bankers are ending up owning everything.

    “If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered,”
    Thomas Jefferson

  5. Vote For Obama In 2012 Says:

    Jeffrey – You are fighting the philosophical battles of the 1930s. If you think the New Deal failed then you are wrong. We need a NEW New Deal. If it takes some “printing money” to do it, then so be it. You fail to realize that an economic system is always somewhat arbitrary.

  6. Jeffrey Henderson Says:

    A philosophical battle? More like a battle for the Republic.

    The bottom line is none of the stuff the govt did in the 30’s nor the stuff they’re doing today is Constitutional. You know, the document that enumerates the limited privileges of the Federal Govt?? You see, if it’s not in there then it is not allowed, pretty simple to follow.

    So, when the Feds do something not in the Constitution it’s an ILLEGAL usurpation of State’s and People’s rights.

    Maybe that’s why so many states are passing 10th amendment resolutions declaring sovereignty.

  7. Joe Campbell Says:

    @Jeffrey,
    You simplify the matter too much. You seem to be arguing that there is no Constitutional justification for the economic interventions of the “Feds” – yet many Constitutional scholars and most Americans disagree. They believe that within the scope of a number of powers given to Congress (specifically the Commerce Clause.)

    You disagree – and simply state that the Feds are acting in a way not prescribed in the Constitution. Many disagree with you in your interpretation – and it’s worth acknowledging that and disputing their interpretation.

  8. Sally Vanschoick Says:

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