Contributor Rees Lloyd: If you haven’t seen the thought-provoking commentary of CNBC financial reporter/analyst Rick Santelli on the unfairness and “moral hazard”
of Barack Hussein Obama’s plan to stimulate the economy then you should watch this video:
The President’s plan in part, provides millions of taxpayer dollars to people who lied to obtain mortgages they couldn’t afford, while providing nothing to the more than 90% of the population honestly obtaining and paying their mortgages.
Now Obama has responded to Santelli (here).
Santelli’s commentary has been styled the “Rant Heard Round The World” due to the enormous public response he sparked. He objects that the BHO Administration plan treats Americans in an extremely unfair and disparate manner, rewarding those who have lied to obtain mortgages; and/or obtained mortgages they knew they couldn’t afford but speculating their homes would appreciate; and/or refinanced in order to obtain luxuries (e.g., swimming pools, expensive cars, bill and credit car consolidation) by second mortgages which leveraged them even more on their homes; and/or failed to meet their mortgage obligations when the housing bubble burst; and, notwithstanding, now call on other Americans who have committed none of the above to “save their homes.” Thus, next door neighbors in the same housing development could have one family paying full price and meeting all mortgage obligations, while next door another person or family who acted profligately or even fraudulently pays less through what is essentially a welfare program and stimulus, if for anything, for dishonesty or irresponsibility.
Santelli has reached into the U.S. Constitution which speaks directly to the sanctity of contracts, and objected to a change of character in the nation to such an extent that the government can simply modify or nullify contracts by preference or whim of those in power to aid one contracting party at the expense of the other — or at the expense of all other Americans whose taxes will be given away to the contracting party who now regrets the contract, even one obtained by false, fraudulent representations.
Santelli has offered a simple solution: If taxpayer funds are to be used to stimulate the entire housing debacle, then let it be done equitably, open to all holding mortgages, and going to those who have a real need because of circumstances they can’t control (e.g., laid off, injured, disabled, elderly), and not those who lied on applications about their income or acted irresponsibly.
Santelli, who has a sense of humor as well as outrage, is planning a protest “Tea Party” in Chicago to focus on the issue. Whether one agrees or disagrees with him, Santelli’s commentary does strike a chord, and provokes thought.
Among other things, the Obama Plan does not bar receipt of taxpayer funds even by those who are shown to have obtained their mortgage loans by fraud, i.e., false income claims on applications. This is true even though it is a criminal as well as civil wrong to make a false statement to a bank in order to induce a loan. At present, Obama’s plan aids and abets such fraud. The dishonest, irresponsible, and greedy, are favored at the expense of the honest, responsible, and frugal.
Also, there is nothing in Obama’s redistribution plan to take from those who are paying their mortgages to give to those who are not paying and lied to get their mortgages, which would provide that taxpayers could recoup what Obama gives away if housing prices rise and the recipient of taxpayer funds sells the home for a profit. (This in contrast to TARP funds to financial and auto industries, in which the government retains a stake and may recover taxpayer funds as the economy improves.)
What does the Obama Plan provide for those who honestly obtained their mortgages and are honestly paying the mortgage obligation for which they contracted? Nothing. What is provided for those who continued to rent, or delayed buying a home until they were financially able to meet mortgage obligations? Nothing. What does it provide that those who lied about their income, knew or should have known they lacked the financial ability to pay the loans they sought, and failed to meet their contractual obligations? Relief, at their fellow citizens expense, assuming they are “citizens,” which they need not be to collect from Obama.
Thus, many are asking: Are those who have acted responsibly but fools? Should the more than 90% who are paying their mortgages, simply stop paying, and then become eligible for Obama redistributionist benevolence at taxpayer expense? Consider, for instance, that Obama is so generous with other people’s money that his plan provides that after receiving bail out relief, the recipient will thereafter receive $1,000 every year as a reward for making his or her post-relief mortgage payments. What about the neighbors who paid their mortgages all along? Nothing, nada.
While admitting these facts are true, there are many who still disagree with Santelli. They generally argue that although the “moral hazard” of the Obama Plan is true and distasteful, the economic crisis is so severe that the plan must be implemented and quickly lest the crisis grow worse.
One who has stated he disagrees with Santelli, is the flamboyant James Cramer, hugely successful on Wall Street and through his hedge fund before hosting his own “Mad Money” show, also on CNBC. However, Cramer offers a plan which he says would actually stimulate recovery and which addresses and would achieve the fairness for which Santelli has called: Provide all Americans with the opportunity to apply for “forty-year mortgages at four (4) per cent interest,” backed by the government.
Notwithstanding all of the above, the Obama Administration has come out with an attack on Santelli, attempting to belittle him without addressing the specific points raised by him.
As for me, it is not a confidence builder to consider that the present BHO Administration plan has been adopted by politicians in Congress among whom 80% admit to never even haven taken a class in economics, and is to be implemented by Barack Hussain Obama, whose resume on business and management experience is as a “community organizer,” who rose politically through the nation’s must corrupt politics in Chicago, and who obtained his $1.3- million home in Chicago in collaboration with the political fixer and public housing scam artist Tony Rezko, who now resides in prison on conviction of political influence peddling.
Rees Lloyd is a Civil Rights Attorney, Veteran’s Activist, Contributor to World Net Daily, and a Contributor to the Victoria Taft Blog.