Tuesday, January 31, 2012

Change You Can Believe In: Freddie Mac Betting Against Struggling Homeowners. We Need A Public Mortgage Bank.

The founding fathers of fascism, the Republicans, would tell you that Freddie and Fannie should be closed because the government should not be in the mortgage business.   Who says?  This announcement will feed their fervor for selling off more public assets to their Wall Street masters.  But, in fact, they have ultimate responsibility for oversight of Freddie Mac so this is in fact an outcome of a bought and paid for political class.  During the Florida Republican debates it was consistently clear all candidates wanted to sell off Freddie and Fannie, public assets,  at bankruptcy rates to their Wall Street masters.   That way all of the mortgage profits go to Wall Street.  In other words, screw the American people.  Specifically, screw the often impoverished people who have no voice.

The reality is Fannie and Freddie are only a mess because they served the needs of their corporate masters rather than the needs of democracy.   This, through the influence-peddling of politics.  It was the comingling of private interests on Wall Street into quasi-public institutions and politics that created this mess at both Freddie and Fannie.   And now Republicans want to auction off Freddie and Fannie to the private, for-profit banksters who destroyed  said firms through fascist comingling in the first place.  Not only that, but sell at a steep discount to please their corporate masters. 

Let me pull out a remark I made numerous times over the years on here.  Thomas Jefferson wanted the government to GIVE every American their own property.  ie, Give them their own home.  You remember him?  He was that communist, socialist, anti-free-market kook who wrote much of our Declaration of Independence.   He was that bad guy who gave you all of your freedoms from the fascist British Empire.   Those freedoms that modern day politicians are taking away from you.  There is a reason that Jefferson didn’t want political parties in this country.  We see that reason quite clearly today.

I wrote a simple method to deal with the underwater mortgages in this country some years ago.  Simply rewrite the mortgages to market value and monetize the bank losses through a government facility.  And, if housing prices dropped appreciably at some future time, do it again.   It doesn’t cause inflation.  It doesn’t affect government spending.  Because it would be monetized, it does not add to any national debt.  It doesn’t do anything other than provide relief from the bankster’s debt serfdom and allow people to stay in their homes.  

If we truly believe that a man’s(person’s) house is his castle, and we want as many people as possible to participate in democracy and appreciate property rights, then, as Jefferson wished, we could seek to provide every person their own shelter, give them the opportunity to be responsible for their lives and in doing so give them a greater appreciation for what the Constitution actually means to them.   A way to implement Jefferson’s ideals, while still making people personally responsible in an economic system, would be to have a national zero-interest mortgage bank that is owned by the people of this country;  just as our government or our national parks or our national science labs are supposed to be owned by the people.   A bank whose charter would be written into an economic constitution and out of reach of political idiots.  A permanent staff would run the bank but the board could be randomly selected from its mortgage holders.  Randomly, as in, not selected by bank officials but by lottery.   Board holders would go through a brief educational stint before their period of service.  (This isn’t rocket science.  If you can pass the seventh grade, you can serve on a mortgage bank’s board and do a better job than the incompetent criminals on Wall Street.)  In other words, this would be a bank that had no affiliation with politicians or government.   The agenda and all handouts of all board meetings would be available through the Internet in advance of the meeting.  All board meetings would be videotaped live for any American to watch or even have a short period of question and answer on the board’s topics.  If we wanted to, we could grant a mortgage bank charter for each state so that the authority for mortgages are handled locally.  State bank management would be required to tour each county in the state annually to answer questions in a public forum and to gather feedback necessary to serve the needs of society.  State banks could then pay processing fees to local community banks to underwrite the loans or even pay local banks to administer the loans locally through their term.   External audits could be required… blah, blah, blah.  Expenses for operating the bank would be capped as they are at most well-run nonprofit organizations.  In other words, no politicians meddling with the bank.  Period.   Operational funding would not need to come from private, for-profit banksters.    It could be coined into service as our Constitution allows.  This bank wouldn’t have competing, private for-profit interests of effing over American citizens like Wall Street’s endless predatory schemes or the schemes of Freddie Mac under the influence of political corruption.  Instead, the bank would extend zero interest loans to all mortgage holders.   Zero.  Forever.  That’s right dog breath.  Just like Wall Street criminals get zero interest loans from the Federal Reserve to create their endless Ponzi schemes.   Instead, We the People get those zero interest loans and cut out the usury mobsters on Wall Street.  And, because these mortgages are held on account by public banks, any losses would simply be monetized.   But there would seldom be losses because the mortgage bank is always holding the underlying asset, it would never have to sell an asset at a loss to raise capital, it wouldn’t be a profit-driven institution and it wouldn’t have to borrow money to exist.   In other words, no more $25 trillion dollar bailouts of Wall Street criminals.  If any person lost their job, they would be granted similar rights with their mortgage that they are granted with unemployment insurance.  By the way, let’s do away with the housing property tax as well.    In other words, why should anyone lose their home because of economic misfortune?  And why should anyone ever profit off of the misfortune of others when it comes to a basic human dignity such as shelter, food, health care, etc.   

Look, this is a fifteen minute napkin sketch.  There may be better solutions.  But, the point here is that too many people are locked into a prison in their mind of what is possible in our society.   Politicians are never going to provide any substantive ideas because they aren’t generally capable of creative thought.   They are bureaucrats.  If they were capable of their own creative thought rather than living off of the creative thought and hard work of others, they wouldn’t be politicians.  Put ideas up for society to debate and allow the refinement and excellence of ideas that comes with public discourse and peer review.

This idea would help put a floor under housing prices, make housing more affordable, put more bling in your pocket and take it out of the hands of private for-profit banking, make a more stable society meeting more of the basic human needs of personal safety, require more personal responsibility for more Americans, provide a greater expansion of the American dream and result in greater democracy and self-rule.  Democracy and self-rule the way Jefferson envisioned it. 

Story link here.

posted by TimingLogic at 10:17 AM

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