So, now we have a ‘bailout plan’. Bankers and existing homeowners should do better, at least in the short term. There is something that bothers me though, and no one seems to be talking about it. Many homeowners still believe their homes are worth more than they truly are. This plan effectively props-up the false ‘housing bubble’ prices. Thus, we’re in for a protracted period of malaise, because it’s been proven these multiples aren’t sustainable.

People believed their Realtors when they were told that all housing bubbles are local and that homeowners could reasonably expect to make more than ten to twenty percent per year on their investment, even when inflation has only been two to three percent. The real estate market was hyped. Why are all those cable shows on flipping houses still around even? Wall Street was also ‘flipping houses’ in the form of fancy mortgage-backed securities. We need more first time home buyers, but engineering such with unwarranted debt is partially what created the bubble in the first place (it certainly enabled many established homeowners to move up the chain though). As a nation, we have a situatioin where average Joe’s wages haven’t kept up with inflation. Compensation for corporate executives has risen from 35 times the average workers to 275 times. Average Joe has to borrow money just to have the things his father used to be able to pay cash for.

How did we get here? The giant sucking sound that H. Ross Perot warned about is alive and well. The global economy has been great for people like Jim Rogers and others who have no real loyalty to the U.S. but only to money; wherever in the world they can park it. Can you imagine the sheer panic that would ensue if one day we begin to see the boards of companies like General Electric decide that some management company in India can use satellite feeds and the internet to effectively manage the company much cheaper than some overpaid C.E.O. in New York or Chicago? As a stockholder, that sounds like a great idea to me, but alas it wouldn’t be at all acceptable – losing those high priced jobs. Not at all! But, the average factory worker can go to hell, because well – he’s just average.

Now that we’ve socialized our financial banking system though, I wonder what is going to be done for the prospective first time home buyer who was anxiously waiting for prices to drop to a level that he or she could afford - a level that would more accurately reflect the rate of inflation over the past twenty years. I guess the banks can give them some great rates on an ARM or something. Sadly, financial companies and mortgage brokers are eager to start this game all over. They’ll be lending more money than they should to people who need more debt than they can afford, for such things as College, Medical bills and Christmas. Perhaps we should get our priorities straight and just cancel Christmas. Oh, but I forgot - our economy is a consumer economy. That’s all we have, as we’ve shown we don’t care about manufacturing jobs. They’re dirty you know.

The nations companies have forgotten to care about the health of its consumer – Average Joe. The executives are all organized to protect their self interest. The boardrooms and compensation committees are a joke. A bunch of back scratching enablers from the same social circles, who believe they too are worth 275 times the average workers salary. I’m not a union man, but it seems things have gotten out of balance. We might do better with some real wage inflation. I wonder what the average workers pay would be if C.E.O’s were reduced to - say ten times the average workers compensation? O, well........... We may not have manufacturing, but we can be proud to say we lead the world in Banking and Law. Real proud. Lot’s of Luck sustaining that model for generations to come.

If this is yours you should have a blog. If you do you should post a link. It makes no sense otherwise.

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The law perverted! And the police powers of the state perverted along with it! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law become the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish! - Frederick Bastiat

Thanks BoneDaddy

It is mine and I do not have a blog. I don't have as much time to write as I would like. I'm off work now (for a couple more weeks), recovering from a hernia operation. I'm not quite sure how I'd go about getting as many people to read my blog as might read my posts here at Slate. Do you Blog?

I tried a half dozen times and couldn't get the quick reply to work. It kept telling me I wasn't authorized, to refresh and log in again.

That's just it: for as long as I can remember people have operated under the notion that the value of one's home must constantly rise.

Housing values are highly exaggerated and much of what we're going through is the real estate market finally correcting itself. The rest of the problem has to do with predatory banks, greed, shady business dealings, and people being given loans for homes they simply can't afford.

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A panda walks into a cafe. He orders a sandwich, eats it, then draws a gun and fires two shots in the air.

"Why?" asks the confused waiter, as the panda makes toward the exit. The panda produces a badly punctuated wildlife manual and tosses it over his shoulder.

"I'm a panda," he says at the door. "Look it up."

The waiter turns to the relevant entry and, sure enough, finds an explanation.

"Panda. Large black-and-white bear-like mammal, native to China. Eats, shoots and leaves."

Neither do I. I am too busy fomenting revolution.

Yes

Clear your cookies.

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The law perverted! And the police powers of the state perverted along with it! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law become the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish! - Frederick Bastiat