Quoted of the Day:
“Blessed are the young, for they shall inherit the national debt.”
“It is just as important that business keep out of government as that government keep out of business.”
“Wisdom oft times comes of knowing what to do next.”
If you’ve been around the blog awhile, you know TB’s brain travels to weird places when I’m on the road. Today, somewhere around Pelahatchie, I was listening to a radio program debate the pros and cons of the Obama mortgage rescue plan. Other than philosophical purists against any governmental intervention, most of the opposition seemed to center around people who didn’t want others to be “bailed out” for their reckless or unwise decisions while responsible people are left with nothing but increased future tax bills. Its really an unassailable position, though I take the parallel view that preventing foreclosures will help property values for everyone, thus timely bill payers like me will benefit indirectly. But mainly, my mind ignored the debate at hand and moved on to bailouts in general, spurred in that direction when the moderator mentioned Mississippi Governor Haley Barbour’s posturing about not wanting the money from the stimulus plan. I was thankful for my friends and family that he did not take that position when the Feds bailed out property owners on the coast after Katrina.
As I reflected on Barbour’s talking points, it dawned on me that Mississippi and our Katrina bailout really set the stage for all we are seeing now. After all, federal money came in to fill the insurance void saving insurers from a public backlash that could have changed the laws affecting their business practices in Mississippi and beyond and more obviously saving Mississippi’s coastal economy from collapse by injecting massive amounts of cash into the hands of most homeowners. It was similar in many ways to the current mortgage bailout proposal that will reward a small cohort of citizens and a specific industry, this time banking and finance. I remember back then my anger at radio hosts and callers who thought the problems of these people were of their own making by choosing to live on the coast and having inadequate insurance and that nobody else in the country was getting anything out of the deal. Each subsequent bailout has been a little different in the details, but has followed the same basic model and given rise to the same basic and widespread and legitimate complaints.
Bailouts aren’t the first important political storm that saw its genesis in Mississippi. The Republican Revolution of 1994 was presaged by Kirk Fordice’s election as Mississippi’s first post Reconstruction Republican governor in 1993. In 1999, the race for Governor between Mike Parker and Ronnie Musgrove was thrown to the Mississippi House of Representatives after the popular vote ended in a virtual tie. Then in 2000, we saw Bush v. Gore and hanging chads in Florida. And in 2007, Democratic Congressman Travis Childers won a race to fill the seat of Republican revolutionary Roger Wicker in a district that votes heavily Republican in national races, an early indicator of the Democratic wave that occured in 2008.
All of that is interesting, but this last one is a bit disconcerting. In 1927, Mississippi was struck by a great flood that remains the worst natural disaster to hit this country. Among the many lasting consequences of that flood, it contributed to and preceded the stock market crash of 1929 and the Great Depression. Katrina, the storm that topped Camille struck in 2005, preceded the stock market crash in 2008. Mississippi, partly as a result of Katrina experienced an increase in foreclosure activity beginning in 2006, beating the rest of the nation to the punch by one year. And both the Bush and Obama administrations have been telling us we are on the brink of another era of Depression.
So is all this just coincidence or is there underlying data to tie all these events together, proving my observational but undocumented and otherwise unsupported thesis? I don’t know, but as I get older I believe less and less in coincidences.
ed. note–If you’ve never read “Rising Tide: The Great Mississippi Flood of 1927 and How it Changed America” I recommend it highly. Among many consequences of the flood, the author provides evidence of how the storm and its aftermath helped lead to banking collapses, particularly in New Orleans, and was a major factor in the coming Depression.
I think you and Michael Phelps need to get yourselves and your giant bag of weed out of Pelahatchie ASAP.
Inciteful as always MD.
TB….”27″ is one of the most interesting and captivating books i’ve ever read…..reads like a novel, but it’s 100% history…..btw, the bail outs Barbour supported were for people who were flooded out despite living outside of the 500 year flood plain…..this Obama bail out is being resisted by Barbour for the same reasons that some of the banks resisted taking TARP money…there are huge controlling strings attached….you know that….come on
I also know Barbour will take the money, and so does he.
I realize the differences in each bailout, of course, but there are also similarities that I find interesting.
Let me just announce here that I have been asked to pay back my MDA grant which I am assuming is part of the bailout money ya’ll are referring to which Barbour took. The treatment I have received has been less than stellar and I’m wondering if it is not a scam. I’ve considered speaking to TB about this on the professional legal level. They want me to pay back money but they do not want to produce any documentation as to why…… just want me to send a check in excess of $30,000.00 with no questions asked by me.
We can discuss that privately if you like.
The things I’m thinking right now aren’t appropriate for public dissemination.
You are a cynical, cynical man
only some of the time. I actually have great faith in people. When someone like me gets let down, they take it really hard.
As for the post, I really am intrigued by the way some notable political and economic shifts have occurred in MS before spreading nationally.
And of course, I was intentionally provocative in comparing bailouts. I firmly believe the Katrina payments were justified, and I support Obama’s mortgage plan even though I would not argue the circumstances are the same. I have thought for months that the banks would be better off renegotiating the terms of bad loans than foreclosing. It seems to me the plan is really just an incentive for them to do that. But on the other hand, I am also bitter that some of my financial equals may get to stay in the McMansion they couldn’t really afford and keep all their fancy Best Buy gear that I’ve been holding off on.
What I think about some entity trying to take back a Katrina grant….I’ll hold my peace on that.
Foreclosure is the fairest fate for all who can’t afford homes….bankruptcy laws are already in place to relieve people of debts…..i know the scale of this thing is huge, but seems like few are having to feel any real pain over this whole thing….as a wise man said recently….no one is standing on the corner selling apples for a nickel that he knows of….we are a long way from the financial armeghedon they are crying about….why can’t we cut payroll taxes for a season….that would stimulate job creation or at least salvage some jobs that might be on the chopping block…..all of those foreclosed homes will be bought in time by people on the way up who want a good deal on a house….my cynical side says that most of this crisis is happening in blue states that have democrat voting blocks like cali, ny, etc…and they are scrambling like hell to placate those folks
I have had the hiccups for 5 hours. I am with quail09 91%.
I think in general our elected officials are a bunch of scumbags. As an example, look up the beer tax that is going on in Oregon. I know y’all dont give a shit but I am OUTRAGED. BMC(bud,miller,coors, mainly bud) are paying off these assholes to introduce legislation that will eventually drive microbrews out of business. Anheuser busch is an evil, evil, evil, evil, evil, evil company.
Owned by a Dutch company who should have NO input when it comes to U.S. policy of any kind…especially when it comes to competition within their own industry
I love how the federal government, which caused the current problems, is now trying to fix the problems by spending trillions of dollars.
If it is in a bank’s interest to renegotiate delinquent mortgages rather than foreclose, then let them do it. If not, let them foreclose. Either way, the government needs to get out of the way and let us find the bottom of this.
The more the government is involved in “fixing” the situation, the longer it will take to recover.
Oregon has had extremely low beer taxes before this, they have been much lower than other states. This ntax probably just brings them up to the level of the rest of us. Maybe a little higher.
I hate for anyone to lose their homes. Some may have been irresponsible. Mainly those are the well off people who bought extra homes that cannot affor them and now will be helped out. Poor people wer probably convinced or talked in to ARM’s that the they didnt fully understand so that banks could get their business and mortgage companies, realtors and so forth could profit. It probably would work itself out but I am not agaianst helping some folks out.
It just seems that they go overboard on this stuff. You can’t get to the good of the programs without putting up with all the “s#*t” involved. So this just shows none of them really care about helping people. Its a ploy to get their other “pet” projects through. This shows ther is no more honesty with this administration than there was with the last one.
Barbour’s stand , along with the other Gov.’s doesnt make sense either. Don’t accept it and the people of their states still have to foot the bill for the overall package just like every tax payer will.
Oregon is trying to go from the lowest beer tax in the country to the highest. That low beer tax is what has contributed to the many microbreweries Oregon has. The industry provides many jobs and a nice tourist attraction.
It’s all a scam!!! Why are all these banks, financial institutions, big insurance companies, and car manufacturers who have made trillions over the past …oh.. let’s just say last few decades are able to get “bailed out”, but average citizens just trying to raise a family are foreclosed on and put on the street? Where is the logic? Bail me out you sorry mutha f**ckers!!!
I agree with above. How is spending/borrowing (where is bail out money coming from?) 700-800 billion going to help the common man?
Obama is sowing the seeds of the defeat of the democrats in the next election.
His proposed policy is fundamentally unfair to 90% of homeowners. You are literally the only homeowner I know that supports the plan. I know lots and lots of democrats and moderate independents that voted for Obama in this and in other states (swing states).
The guy has stepped in it big time. He crammed down a very unpopular stimulus plan (1st part of his political capital spent), he now is going to cram down a very unpopular mortgage plan (it is probably too small to have an impact anyway), and he is about to try to cram down tax increases.
All that after doing almost no vetting of his cabinet. Oh yea and he crammed down a tax cheat to run the Treasury.
Obama is now officially mortal and if he does not get his act together he is going to be in for some very rough treatment.
I hope for the sake of the country he gets his act together.
Time will tell. It’s hard to make chicken soup out of chicken shit.
I read the most thoughtful analysis I have seen of the mortgage plan at this guy’s blog:
I don’t know his politics, but he sees the pros and cons and it helped me understand the plan. Some of his hangups are the same ones I raised and some of you also mentioned. He does not think the plan will work, and he’s probably right, but his discussion goes beyond the “it ain’t fair” talking point, which I appreciate. Here’s the thing the Santelli’s and “every homeowner I know” too are not discussing–the money for this comes from the TARP bailout. It’s already been spent and its either going to some Wall Street fat cat or to one of our neighbors who might save his house and preserve, or at least reduce the carnage, of the value of our own houses. The first half of that money while the Republicans were still in charge disappeared and the devil only knows where it went. I applaud the Obama team for being public and taking political risk to seek a solution. Nobody, theories be damned, knows how to fix the mess, but I’m glad he’s the one trying to do it. And Adam, until the Republicans quit reprising Groucho’s virtuoso performance I posted earlier this week, I don’t think they are going to be “Back in the Saddle” any time soon.