California Screamin'

Robert Reich, former Secretary of Labor and currently a professor at the University of California at Berkeley (read: elitist) is “delighted” with the high price of gas because he believes it will force people to start using public transportation. Of course, when asked why he still commutes by car he admits, “I’ve never been able to organize myself around their schedules.” Interpretation: Public transportation is good for the ‘little people’ – I’m far too important to associate with the huddled masses. Besides, it’ll help free up the traffic on the highways and make my commute a whole lot easier – after all, I’ve got young minds to warp, you know.”

The city of Vallejo, CA has filed for bankruptcy (its proximity to San Francisco should come as no surprise). For me, this is simply the inevitable result of the irresponsible behavior of many indulgent Americans who quite frequently choose to default on their obligations because there’s no longer any shame associated with bankruptcy – today it’s just an available, often convenient, recompense that rewards recklessness.

While this occurs all across the country, I’m picking on California because the housing boom we’ve experienced over the past few years was more pronounced there; just as is the precipitous downtrend they’re suffering through now. And whether real or artificially inflated, higher home prices translate into higher appraisal values which equates to higher tax revenues for local governments. However, when Vallejo’s budget started to get squeezed as a result of decreased tax revenues due to the slump in housing prices, they didn’t bother to try finding ways to make things work by doing with less, they simply declared bankruptcy – ‘help me Nanny-State’.

Why be accountable? It’s the American dream to become a homeowner. So who cares if you secure financing by overstating your income, buy more home than you know you can afford, and put little or no money down?! And who could guess that those lower initial interest adjustable-rate mortgages would actually adjust annually? It’s not fair, you expect me to adhere to the terms of my contract?!

And the lenders who crafted all their byzantine subprime loan schemes seem puzzled that subprime borrowers with a poor credit scores and a delinquent payment histories would fail to pay their mortgage? What are we suppose to do when we can’t refinance buyers into a legitimate loans and they now owe more than their homes are worth? Since when does a boom ever go bust? Help us Father Congress, please absolve us from our responsibilities.

What’s been largely overlooked in this mortgage and housing crisis is that the financial risks associated with any loans are always offset – usually through higher interest rates, increased fees, and other credit enhancements. As Bear Stearns’ chief executive stated before a congressional hearing in Washington, just as President Bush was orchestrating a federal bailout for their neglectful performance (and risking our country’s financial future in the process), “the impetus [for the run] was a lack of confidence, not a lack of liquidity.” These banks, much like the city of Vallejo, enjoyed the spoils while the market was riding high but are now running to the government to help them avoid paying their ‘bills’.

I don’t know about you, but I don’t enjoy having to shoulder the burden for people, or organizations, that make poor choices. Sadly, this fallout has impacted everyone – including those of us who choose to follow the rules (yeah, I know . . . we’re suckers).

As if it couldn’t get any worse, many banks are now breaking the law by not paying backlogged homeowner association fees for the foreclosed homes they’ve taken ownership of once the buyers default. Foreclosed properties add to the existing inventory of homes on the market and drag down home prices. When these homes aren’t properly maintained, entire neighborhoods are made to suffer. Banks need to be held accountable for their slipshod loans, as well as for maintaining the homes they’ve brought to foreclosure.

Last week, John McCain said he was “intrigued by a man on Mars” – I think we all know the man he has in mind.

Learned a new word last week that I’ll most likely never get to use again: paraskevidekatriaphobia . . . the fear of Friday the 13th.

Overheard from the office: Female coworker to copy machine: “You have enough paper, you bitch.” I can especially relate to this since I swear at inorganic objects habitually. Any one else suffer this peculiarity?