Escaping Blame

Andy Kroll wrote a preface for an article on the homeowner debt crisis, and bemoaned the fact that his own parents had fallen “victim” to this plague which swept our nation.

Last December, as we hopscotched around town buying last-minute Christmas presents, my mother told me how, for years, they'd been underwater on the house they'd owned for nearly as long as I've been alive. Five thousand dollars underwater, then $10,000, then $20,000... The local housing market sagged along with the nation's, and there was nothing they could do about it. This angered me more than anything I can remember: first, you're a “homeowner”; then, it turns out that you're over your head in debt by no fault of your own…

Andy Kroll was born in 1978, so his parents must have bought the house on or before 1985 to qualify for his “nearly as long as I've been alive” bit.

We bought our house in 1995 with a 30-year fixed and 20% down. We have refinanced a couple of times for lower rates on a new 30-year fixed, and neither time did we add to the principal, that is “take out equity.” We currently owe about 32% of what the house would sell for today.

So how do Kroll’s parents, who bought their house ten years earlier than we did, find themselves underwater “through no fault of their own?” Housing prices are not the same in California as on the East Coast, but patterns are very similar, and I’m not willing to believe that East Coast housing prices have fallen dramatically below 1985 prices.

There is no doubt that Kroll’s parents bought into the hype of the housing bubble. They were persuaded that their home was worth vastly more than they currently owed on it and that they could live the good life by refinancing and “taking out equity” to maintain a lifestyle not otherwise possible.

They may very well have been persuaded by shysters, but that does not make it “no fault of their own.” Each of us is responsible for our own decisions. We cannot, as adults, allow someone else to make a decision for us and then say that it, being a bad decision, was not our fault. It was our fault for not being sufficiently adult to inform ourselves in order to properly make our own decision.

The con man preys on the greed of the victim. No greed, no victim.

Amnesty Again

In pimping for his immigration reform plan the other day Obama said that, “We forget that most of us used to be them.” The man has regained his ability to thoroughly piss me off.

No, we did not “used to be them,” because our forefathers came here legally. They applied for permission and waited until that permission was granted. They came here with the intention of becoming citizens and earning the rights thereof. They did not come illegally in the dark of night, use forged documents and false names to get jobs, and start screaming about their “rights” as non-citizens and law-breakers.

I don’t care if they’re “good workers.” I don’t care if they are “good people;” if they are faithful to their spouses; if they treat their children well; if they go to church every day and have statues of St. Mary in their living rooms. They are criminals. They broke the law by coming to this country without permission. They broke another law by forging documents. They broke another law by lying to their employers. They break these laws every day they are here, and they think nothing of it.

I don’t get this country, I really don’t. We incarcerate people at the highest rate of any nation in the world. We throw people in prison practically for stealing a loaf of bread. Some poor addict gets caught with a marijuana toke in his pocket and we will lock him up in prison for years. But a person enters the country illegally, uses forged documentation or a stolen identity to obtain a job and continues doing that for years, and our reaction is that we need to “let him come out of the shadows” because “all he wanted was a better life.”

We ought to throw him out of the country, because he broke the law in more than one way and did so for years. He wanted a better life? So did that poor dumb pot smoker, but we threw him in jail for seeking that better life through illegal means.

What are we telling people who waited their turn, who waited for permission or are still in some distant land waiting for permission to this day? We’re telling them they are suckers. We’re telling them that their dream land is not what they think it is, because we reward those who break the law. The illegals are here, living the good life with a “path to citizenship” and they are still out there waiting for permission that they may never get. We don't have room for them because we're too full of immigrants on that "path to citizenship" who illegally jumped ahead of them.

Fairness? Amnesty is about 12 million votes and both sides seem to think those votes will go to them, which is symptomatic of just how stupid and insane our politics has become. What’s equally pathetic is that those 12 million votes will, indeed, go to whichever party the 12 million immigrants think is most responsible for the amnesty.

Back From The Dead

Been down with the flu. Nothing other than fever and chills, and no trip to doctor or hospital required because it has not invaded my lungs. I still feel like shit, but at least I feel like fresh warm shit. Things may be slow for a few more days.

Women In Combat

So we’re going to deploy women in front line combat and some people are worried about whether or not women can cope with the physical and emotional stress of combat. Oh, really?

My guess is that women will handle physical and emotional stress of combat, if anything, better than men do. They handle childbirth, which would turn the average man into a gibbering idiot, and many of them do it multiple times, and on purpose. I’ve even seen them look forward to it.
How many men would look forward to getting their kneecaps broken?

Think about it; when a couple breaks up, whose clothing is on the lawn?

I think the reason we have kept women out of combat has to do with the “cruel and unusual punishment” thing in our constitution and we only now decided that doesn’t apply to our enemies in time of war, but isn’t there something in the Geneva Convention about deploying “terror weapons” in battle?

More Voodoo Economics

Paul Krugman is not alone in wanting to hide from reality by changing the manner in which debt is evaluated. He wants to quit comparing our debt to our GDP because the proportion is now reaching 100% and is beginning to frighten people so, as I mentioned yesterday, he wants to talk about debt as a proportion of potential of GDP, which brings the percentage down to… Well, it’s hard to tell, because the heading of his chart is unintelligible. The left side is labeled “(Bil of $/Bil of $)” and runs from 0.24 at the bottom to 0.38 at the top.

The percentage of potential GDP is, presumably, lower than the percentage of actual GDP. Further, since economists can create the potential GDP number out of thin air, using that number has the possibility to keep us borrowing money for decades.

The pitfall of this, of course, is that if actual GDP is that far below our potential GDP then we have not recovered from the recession, are therefor in a recession, and no one wants to admit we are in a recession. Krugman and company blithely ignore that.

Dean Baker ran into difficulty in discussing Japan in a piece unabashedly titled “The Burden of the Debt Depends on How You Measure It,” though, because Japan’s debt is already 200% of GDP and nobody can really pretend that they are functioning below capacity. So he outdoes Krugman by ignoring amount of debt altogether and simply discussing interest on their debt as a ratio to their GDP. They are, he says, in great shape because the interest on their debt is at a low rate and their interest payments are low as a percentage of GDP.

By that standard you, with your $50,000 annual salary, can buy a $20 million house, because you work for Microsoft and the interest payments on your house will be less than 1% of Microsoft’s annual revenue. They will be well over twice your entire annual salary, but Dean Baker doesn’t care about that.

Allies, or Allies?

Long story writ short, America says to France, "Let's you and him fight." Courage is our middle name. you know. Reminds me of my sister when we were kids. She would instigate a fight between me and my brother (not hard to do), and then rat us out the the parents. "Mom, Bill and Steve are fighting again." Snide little shit.

Voodoo Economics

Paul Krugman likes to show numbers in the manner which best favors his argument. Profits for big corporations are stated in raw numbers, for instance, because "Blowhard Corp made $23 billion in profit last week," makes big business look worse than saying that "Blowhard Corp made 2.3% profit on $1 trillion in sales."

Likewise, government borrowing is never related to total government revenue or spending, which would show a ratio of very nearly 50% and scare the crap out of everyone, but rather to the total economy or GDP, where it reflects a much smaller percentage. Krugman et al are unconcerned that the two numbers are only marginally related and that the comparison is much like comparing your personal borrowing to your employer's revenue rather than to your own personal income. Your mortgage is probably 150% of your annual income, which is pretty alarming, but it’s only 1.2% of your employer’s revenue so the lender can rest easy. That would make some sense, I guess, if your employer was paying your mortgage.

Unfortunately for Paul Krugman and company, government borrowing is becoming a rather alarmingly high percentage of current GDP. Krugman points out that this is partly due to the GDP being reduced by the depression, and that we should therefore look at government borrowing as a percentage of the potential GDP. By doing this, he illustrates that government borrowing under Obama has plunged dramatically, and he has a chart to prove it.

This is quintessential economic argument. If you can’t win your argument with real numbers, then just switch to using imaginary numbers.