Subprime Mortgage Bailout

[Gumby]

I have a simple question for you Armor: Before you were born, what did you ever do to deserve any of the abilities or talents that you were born with? The answer is simple -- you did nothing to "earn" your abilities, just as those born with disabilities did nothing to "earn" their disabilities. You may have been the fortunate heir of good genes, but that is all it is -- good fortune, not merit.

Given that fundamental precept, it is not unfair to have a system that taxes some of the benefits flowing to the fortunate to ensure that the unfortunate have some minimally acceptable level of life. Rawls' "veil of ignorance" is a thought experiment that asks "if you could not know how you would be born (i.e. - you didn't know if you would be smart or dumb, athletic or physically disabled, majority or minority, etc.), what system would you choose?" Rational people would choose a system that does not end up with the unfortunate starving in the street.

To my mind, a fundamental flaw shared by libertarians is a complete inability to imagine that they might have been born as one of the less fortunate. Of course you will favor a system in which someone of your abilities will succeed once you know what those abilities are. But such ex post facto rationalization is hardly the way to choose a political and economic system.

I have cautioned before about setting up strawmen. I have never advocated equality of outcome, or communism if you will. In fact, I believe a system that forced equality of outcome would be absurd. I enjoy Kurt Vonnegut's short story Harrison Bergeron because it highlights just that absurdity. As others have correctly pointed out, intelligence, talent and ability alone do not make success; it is also necessary to work hard with the talents that we have been given. That is one of the faults of communism -- that it does not incentivize people to work hard. But you cannot deny that of two people who work exactly as hard as each other, the one with more talent will nearly always be more successful (not counting lucky breaks or other exogenous forces).

The primary point of my posts has been to encourage libertarians to look beyond the ends of their noses. There are real people, suffering real hardship in the world. Those people are, in a moral sense, no worse or no better than you. Certainly, through hard work, you have made optimal use of the talents you were given. But others can work equally hard and still not be as successful, because they do not have your abilities. To consign those others to metaphorically "starve in the street" because you want a system that places no tax on your own success is, in my view, wrong.

 

[Gumby]

Armor.... good points...

And I will give an example... I have a nephew who is very intellegent, scores in the 95 percentile on the test...

could not make it in college for whatever reason... was a drop out... lived off family memebers for awhile... joined the navy and looked like he was turning his life around. Met some weird girl in Australia. She was pregnant. Move her here, got married, got kicked out of the navy, lived off other relatives, they kicked all of them out as they never go a job, just wanted to lay around and play the guitar, moved back to Australia so they could live off the dole over there, had their own child, did odd jobs under the table to get some money... etc. etc. etc...

As you can see, his born abilities are more than most, but he has wasted them in his pursuit of his life. I will not help him out financially for anything and I do not think the gvmt should help him out either. However, from what I read from Gumby, he should be helped as he is in the 'poor' class...

There is almost nothing that annoys me more than people who have been given all the abilities to succeed, yet squander their talents. You see this often when people get involved with drugs. Unfortunately, notwithstanding my outrage, I think that we do have an obligation as a society to see to it that these people don't starve. Certainly, they don't deserve everything possessed by those who did keep clean and work hard, but they shouldn't be allowed to starve.

 

[brewer12345]

There is almost nothing that annoys me more than people who have been given all the abilities to succeed, yet squander their talents. You see this often when people get involved with drugs. Unfortunately, notwithstanding my outrage, I think that we do have an obligation as a society to see to it that these people don't starve. Certainly, they don't deserve everything possessed by those who did keep clean and work hard, but they shouldn't be allowed to starve.

Why do you hate America? Communist scum.

 

[ERD50]

The primary point of my posts has been to encourage libertarians to look beyond the ends of their noses.

To consign those others to metaphorically "starve in the street" because you want a system that places no tax on your own success is, in my view, wrong.

Gumby - (I'm working on being succinct) - are you deaf?

Despite what has been said repeatedly, you are painting everyone with an opposing view as being totally opposed to any form of support for those less fortunate. That is an extreme view of capitalism, and I have not seen anyone in this thread take that view.

But you keep saying you are not in favor of communism (the extreme view), yet, you have not really said what you *are* in favor of.

IMO, it really is just a matter of degrees along a scale, not really a philosophical difference at all:

<Communism...........<-------the MIDDLE------->........... Extreme Capitalism>

The real question, as I see it, is not 'do you read Rand or Rawls?', but how much help do you give to which people?

If you look at it that way, you might see that people really are not that different. They can sit at a table and talk w/o name calling or accusations, and they might be able to come to a reasonable compromise, or at least respect for the other person's views.

If they listen.

-ERD50

 

[armor99]

I have a simple question for you Armor: Before you were born, what did you ever do to deserve any of the abilities or talents that you were born with? The answer is simple -- you did nothing to "earn" your abilities, just as those born with disabilities did nothing to "earn" their disabilities. You may have been the fortunate heir of good genes, but that is all it is -- good fortune, not merit.

Given that fundamental precept, it is not unfair to have a system that taxes some of the benefits flowing to the fortunate to ensure that the unfortunate have some minimally acceptable level of life. Rawls' "veil of ignorance" is a thought experiment that asks "if you could not know how you would be born (i.e. - you didn't know if you would be smart or dumb, athletic or physically disabled, majority or minority, etc.), what system would you choose?" Rational people would choose a system that does not end up with the unfortunate starving in the street.

Gumby... first off I am not a libertarian. As a matter of fact I a registered independant. I dislike the very notion of being labeled anything. On certain issues I might see it the conservative way, on others more liberal. But there are lots of libertarian views that I do not agree with at all. If someone wants to know what I think of a certain issue, they will have to find out the old fashioned way by asking me.
You posed to me a very good question. One that I must admit I had not really considered much. Obviously before I was born I did not exist. And before I exist I cannot possibly say that I have "earned" anything. Am I the benefactor of "good" genes? Perhaps, although I think my folks are of fairly average intelligence etc. But what I can say with a great deal of pride and certainty is that everything that I have done since I was born is all on me, to my credit or detriment. I would never blame my failure in life to anything I was born with, or even born without.
I would completely disagree with your last statement though. About the sort of system that I would choose for myself, without knowing before hand which traits would be considered advantageous in my society. I would choose whichever system gave me the most choices and posibilities to advance my life, and improve my situation. Maybe I am wrong.... perhaps there are hundreds of thousands of people that I have never met, that would really be happiest remaining poor, providing that the govt met their basic needs. I would much rather be given the opportunity to go for the "brass ring" if I choose to, and know I can fail, then to be forced to play it safe and "know" I will never have much.
I have not always been successful. There was a point in my life where my life savings was $3000 and I was laid off. I estimate that I was 3 months or so away from loosing everything. It was a rotten, horrible time in my life. But I did not blame society, the govt, my rich neighbors etc for my situation. I went about the business of finding new work. As a matter of fact because of that experience I actually look at my money and assets to this day in terms of "how many layers are there between me and going homeless".
I flat out do not believe that there are rational people that are incapable of doing everything. I will never make it in the NBA at my height of 5'9". But my life is hardly over because of that. Had I not the intelligence to go into the engineering field that I did, I would like to think I would at least have been inteligent enough to do something else. From what I hear electricians, carpenters, and plumbers can make salaries that dwarf my own. No college required, just an apprenticeship. And for the record I think that is just fine, because they have skills that I lack. If someone is truly mentally or psysically disabled to the point that they cannot make a rational decision, or take action to take care of themselves, then you know what... you got me there... and I completely agree with you! Society should have some capability to take care of people that TRULY cannot take care of themselves. It will never be possible to create a system (with the exception of communism) where "no one" ever starves in the streets. It is a cold hard reality that it will always occur to someone, somewhere at some time. To try to save everyone would need the complete sacrifice of everyone else. Obviously this is not a fair trade. As I have stated before, the best you can really ever hope for is a system in which you have as many choices to better your life as possible. That way there is more likelyhood... although not a assurance that you will succeed.

 

[Gumby]

ERD50:

I don't believe I have painted "everyone" with an opposing view as being opposed to any support network. I think I have been rather clear in stating that my posts are directed to the hard core libertarians/objectivists who want no taxes and no government supports. If you are not one of them, the post is not directed to you. If you are, I hope I might change your mind.

I have now re-read all my prior posts in this thread and I can't see anywhere that I called anyone names or made personal accusations (admittedly, my first post in this line of argument was a bit smart-assed, for which I did apologize, as you may recall). Instead, I have attempted to set forth my understanding of the libertarian position, my objections to it and the bases for those objections. I have certainly never asked anyone if they were deaf or told them to to climb down from their "holier than thou" soapbox.

Actually, I have listened to you personally, and I suspect that my view and yours are not that dissimilar. It can be a thorny problem -- who is deserving and what do they deserve in the way of help from society at large? The truly disabled (physically or mentally) are an easy case. The problem comes when people who otherwise should be able to succeed just will not do so. I know many people like this (many are related to me). Some days, I just want to smack them in the head and yell "wake up!" But no matter how infuriating they are, it is better for all society that there be some minimal support for them. A basic respect for humanity itself demands as much.

Now your pal Armor99 tends much more toward the pure libertarian position, but I'm sure he can speak for himself on that count. (Edit: I see that he posted while I was writing and says he is not a libertarian-- so please disregard)

Best wishes,

Gumby

 

[Gumby]

Gumby... first off I am not a libertarian. As a matter of fact I a registered independant. I dislike the very notion of being labeled anything. On certain issues I might see it the conservative way, on others more liberal. But there are lots of libertarian views that I do not agree with at all. If someone wants to know what I think of a certain issue, they will have to find out the old fashioned way by asking me.
You posed to me a very good question. One that I must admit I had not really considered much. Obviously before I was born I did not exist. And before I exist I cannot possibly say that I have "earned" anything. Am I the benefactor of "good" genes? Perhaps, although I think my folks are of fairly average intelligence etc. But what I can say with a great deal of pride and certainty is that everything that I have done since I was born is all on me, to my credit or detriment. I would never blame my failure in life to anything I was born with, or even born without.
I would completely disagree with your last statement though. About the sort of system that I would choose for myself, without knowing before hand which traits would be considered advantageous in my society. I would choose whichever system gave me the most choices and posibilities to advance my life, and improve my situation. Maybe I am wrong.... perhaps there are hundreds of thousands of people that I have never met, that would really be happiest remaining poor, providing that the govt met their basic needs. I would much rather be given the opportunity to go for the "brass ring" if I choose to, and know I can fail, then to be forced to play it safe and "know" I will never have much.
I have not always been successful. There was a point in my life where my life savings was $3000 and I was laid off. I estimate that I was 3 months or so away from loosing everything. It was a rotten, horrible time in my life. But I did not blame society, the govt, my rich neighbors etc for my situation. I went about the business of finding new work. As a matter of fact because of that experience I actually look at my money and assets to this day in terms of "how many layers are there between me and going homeless".
I flat out do not believe that there are rational people that are incapable of doing everything. I will never make it in the NBA at my height of 5'9". But my life is hardly over because of that. Had I not the intelligence to go into the engineering field that I did, I would like to think I would at least have been inteligent enough to do something else. From what I hear electricians, carpenters, and plumbers can make salaries that dwarf my own. No college required, just an apprenticeship. And for the record I think that is just fine, because they have skills that I lack. If someone is truly mentally or psysically disabled to the point that they cannot make a rational decision, or take action to take care of themselves, then you know what... you got me there... and I completely agree with you! Society should have some capability to take care of people that TRULY cannot take care of themselves. It will never be possible to create a system (with the exception of communism) where "no one" ever starves in the streets. It is a cold hard reality that it will always occur to someone, somewhere at some time. To try to save everyone would need the complete sacrifice of everyone else. Obviously this is not a fair trade. As I have stated before, the best you can really ever hope for is a system in which you have as many choices to better your life as possible. That way there is more likelyhood... although not a assurance that you will succeed.

Armor99:

Thanks for your response. As ERD50 notes, we are all not that different when it comes down to our real life opinions and actions. To a certain extent, an abstract philosophical discussion tends to emphasize our differences and downplay our agreements. I do not take personally any philosophical disagreement we may have, and I hope you don't either. It has been an interesting discussion.

All the best,

Gumby

P.S. - I view money much the same way. I was once down to 28 cents to my name and a week until payday. I went to the beach and caught blue crabs by hand so that I could have a meal.

 

[Hamlet]

Even if the possibility of starvation causes some of them to stop taking drugs? A lot of people involved in drug/alcohol recovery talk about the concept of "hitting bottom". If you prevent people from actually hitting bottom, some of them who would have quit will now continue to take drugs.

Sadly, some of them will continue taking drugs until they starve.

I don't have a perfect answer. Certainly, I don't want people to starve, but I also don't want the government making the problems worse by enabling bad behavior.

There are a number of people in this world that would happily take a small monthly check from the government, rent a room in a boarding house and drink themselves to death over the next 30 years. At least some of those people are currently holding jobs and providing for themselves. It would do them harm to give them that monthly check.

Is this effect enough to make government assistance a net negative to the people on assistance? Probably not. I know plenty of people who got welfare after a divorce, and in a couple of years got back on their feet and started doing well. They needed help, got it, and when they didn't need help anymore they stopped taking it.

My point is not that there should be no government assistance, but that we need to be very careful that we don't do more harm than good.

There is almost nothing that annoys me more than people who have been given all the abilities to succeed, yet squander their talents. You see this often when people get involved with drugs. Unfortunately, notwithstanding my outrage, I think that we do have an obligation as a society to see to it that these people don't starve. Certainly, they don't deserve everything possessed by those who did keep clean and work hard, but they shouldn't be allowed to starve.

 

[Gumby]

My point is not that there should be no government assistance, but that we need to be very careful that we don't do more harm than good.

Point well taken. Deciding where that line lies is a mighty difficult thing.

 

[twaddle]

There is almost nothing that annoys me more than people who have been given all the abilities to succeed, yet squander their talents.

Umm, isn't that sort of the definition of "early retiree?"

 

[Texas Proud]

There is almost nothing that annoys me more than people who have been given all the abilities to succeed, yet squander their talents. You see this often when people get involved with drugs. Unfortunately, notwithstanding my outrage, I think that we do have an obligation as a society to see to it that these people don't starve. Certainly, they don't deserve everything possessed by those who did keep clean and work hard, but they shouldn't be allowed to starve.

And there is where I have a major difference with you... I would allow him to starve. If starvation will not get him off his butt to do some work, then why should I have to support him? HE has the ability to earn a living and NOT STARVE...

Now, if he did not have the ability because he was born with disabilities etc. that prevented him, I would agree with you that he should not starve.


The world is a cruel place... and it will remain so. Look at all the poor in Africa, India and China who starve to death all the time... yet, even though the people know that there is a high likelyhood of them starving, they continue to have as many babies as they can making it more likely that more will starve.

 

[brewer12345]

And there is where I have a major difference with you... I would allow him to starve.

Boy, the milk of human kindness just runs wide and deep around here, doesn't it?

 

[Texas Proud]

BTW... I read where people see communism as the way to make people more equal.. and in theory maybe it does... but there were people starving in the street in the old Soviet Days... or even freezing to death... it was not a system that took care of all society....

And Gumby, let's get back to the original topic... MORTGAGE ASSISTANCE... I still do not see why anything you have said would change my mind that someone who got a 'fair' mortgage should get any bailout... if the rate is reset, that is life, they chose it and lost... if they lost a job and can't pay... again, their of buying more house than they can afford and getting caught in the crossfire.. better that they LOSE the house and the banking system takes the loss then the gvmt taking the loss... the person can come back in a few years and buy another house when the prices finally hit bottom..

 

[Gumby]

The world is a cruel place... and it will remain so.

Only if we allow it.

 

[Texas Proud]

Boy, the milk of human kindness just runs wide and deep around here, doesn't it?

So... you are willing to pay a person from your tax money... and the ONLY thing that is required is that he does not WANT to work??

 

[Gumby]

BTW... I read where people see communism as the way to make people more equal.. and in theory maybe it does... but there were people starving in the street in the old Soviet Days... or even freezing to death... it was not a system that took care of all society....

And Gumby, let's get back to the original topic... MORTGAGE ASSISTANCE... I still do not see why anything you have said would change my mind that someone who got a 'fair' mortgage should get any bailout... if the rate is reset, that is life, they chose it and lost... if they lost a job and can't pay... again, their of buying more house than they can afford and getting caught in the crossfire.. better that they LOSE the house and the banking system takes the loss then the gvmt taking the loss... the person can come back in a few years and buy another house when the prices finally hit bottom..

I am guilty of wandering off topic. I have never really been debating the question of a cash money government bailout for anyone. I thought I made it clear originally that I was opposed to that because it would encourage speculation. But I do think that there can be certain regulatory changes that can encourage banks to reset the interest rates and/or stretch the loan terms to get to something that people can pay. It is in no one's best interest to have massive foreclosures. Among other things, your investments would suffer as the economy slowed in reaction to such foreclosures. Better to keep people paying on a mortgage they can afford. The bank gets to keep a performing loan. We don't have to massively increase social services to handle newly homeless people and your investments will continue to prosper. What's not to like about that?

 

[Texas Proud]

I am guilty of wandering off topic. I have never really been debating the question of a cash money government bailout for anyone. I thought I made it clear originally that I was opposed to that because it would encourage speculation. But I do think that there can be certain regulatory changes that can encourage banks to reset the interest rates and/or stretch the loan terms to get to something that people can pay. It is in no one's best interest to have massive foreclosures. Among other things, your investments would suffer as the economy slowed in reaction to such foreclosures. Better to keep people paying on a mortgage they can afford. The bank gets to keep a performing loan. We don't have to massively increase social services to handle newly homeless people and your investments will continue to prosper. What's not to like about that?

I agree... and banks will do that if they can (change terms etc) without any new regulations... it is not in their interst to foreclose either. The free market works if you let it even if some get caught up in the wheel (yes, I know, cruel me).

But I see the rate reset as the biggest problem that is looming in the future compared to the sub-prime problem... most of the sub-prime should never have been on a loan, where the others were better quality, but just chose a variable rate... and now have to pay the price.

And as I have said before... good discussion

 

[ERD50]

ERD50:

I don't believe I have painted "everyone" with an opposing view as being opposed to any support network. I think I have been rather clear in stating that my posts are directed to the hard core libertarians/objectivists who want no taxes and no government supports.
Best wishes,

Gumby

OK Gumby, sorry if I misunderstood. I heard you use that 'starving in the street' line and the 'libertarian' moniker together, I took it to be addressed towards anyone with libertarian leanings. I just didn't get the impression that anyone in the thread was advocating what you are calling 'hardcore' libertarianism - no support for no one under no circumstances.

As others have said, even with the best of intentions, providing for the truly needy without also tempting a few unmotivated folks to try to cash in on those benefits is a tough thing to implement on any kind of large scale. It will likely be a source of contention for many generations to come.

-ERD50

 

[chinaco]

I think we all use hyperbole and exaggerate at times to get our points across. Then someone with the opposite point of view takes offense or exception... and away we go!


No bailout.

Although I am in favor of jail time for anyone that broke the law. Or just making some shyster (legit business) that scr3w3d some less than savvy people disgorge. Use the long arm of the law to pierce the corporate veil and grab those @$$h013s by the neck and wring it.

 

[brewer12345]

So... you are willing to pay a person from your tax money... and the ONLY thing that is required is that he does not WANT to work??

I already do, and so do you.

 

[Gumby]

So... you are willing to pay a person from your tax money... and the ONLY thing that is required is that he does not WANT to work??

It is rarely as simple as someone waking up one day and saying "Ya know, I just don't feel like working; I'll let the government support me instead". The pathologies that lead to permanent underclass status are many and varied, and they start at an early age. The young wife is a teacher at an "alternative high school", which is where they send the kids who just can't cope with regular high school. The stories she could tell you about the home lives of some of her students would curl your hair. It is a miracle if they can graduate from high school and stay out of jail. It is tempting to think that all their problems will be solved with a swift kick in the @ss, but that is almost never the case.

 

[brewer12345]

It is rarely as simple as someone waking up one day and saying "Ya know, I just don't feel like working; I'll let the government support me instead". The pathologies that lead to permanent underclass status are many and varied, and they start at an early age. The young wife is a teacher at an "alternative high school", which is where they send the kids who just can't cope with regular high school. The stories she could tell you about the home lives of some of her students would curl your hair. It is a miracle if they can graduate from high school and stay out of jail. It is tempting to think that all their problems will be solved with a swift kick in the @ss, but that is almost never the case.

Yup. I heard enough stories about the sad cases my sister saw at Legal Aid, and I'm sure I only heard the least bit of what she has seen. Kids who were pretty much doomed from the start and would struggle to lead a productive life even with lots of help. The one whose mother never showed them how to tie his shoes but showed him how to roll a joint at age 8 is typical of the poor souls she tries to help. Can't see how it is so wonderful to throw these people to the dogs.

 

[ERD50]

It is rarely as simple as someone waking up one day and saying "Ya know, I just don't feel like working; I'll let the government support me instead".

Agree, it is not that simple. But I do think that to the extent that we move towards 'bail outs' and alleviating people from the consequences of their poor decisions, we do tend to encourage that behavior.

It is tempting to think that all their problems will be solved with a swift kick in the @ss, but that is almost never the case.

And it's tempting to think that all their problems will be solved with a hand-out, but that is almost never the case.

I hate to get down to specific cases, as one can always provide a counter anecdote, but in Brewer's example, I can't help but wonder if that joint-rollin' mom's life style was not 'enabled' by some government handouts?

And no Brewer, I'm not saying yank all social services from those people, and that will straighten them out. That train already left the station from what I can tell.

And no, I'm not saying that the condition of ALL poor people was brought about by 'enabling' government programs. But I think they can contribute to that condition.

Possibly, the past bail-outs are the cause of some of these social ills, rather than the solution?

-ERD50

 

[brewer12345]

And no, I'm not saying that the condition of ALL poor people was brought about by 'enabling' government programs. But I think they can contribute to that condition.

Possibly, the past bail-outs are the cause of some of these social ills, rather than the solution?

-ERD50

Undoubtedly. But this is all about trying to do the grestest good. So should we let 100 people starve because preventing them from starving will keep 20 people from becoming more productive adults? I think not. I wish we could prevent the hundred from starving and not impair the 20, but life doesn't give us those options most of the time.

 

[armor99]

We are well on our way to one of the largest and certainly most interesting discussions I have seen for quite a while on the forums. Congrats everyone...
I have been thinking a lot about what has been said here, and trying to keep an open mind to the oppposing view point. And I think the sticking point for me comes down to the following question... "At what cost?". Is it a noble thing to help your nieghbor when he is down? Or someone that is addicted to drugs, or someone that is truly just lazy and does not WANT to work although capable of doing so? The answer really keeps comming back to "At what cost?".
There are some that would say you help anyone and everyone reguardless of how much you suffer, or how much the person did it to themselves. These folks would say that suffering is a virtue, and that the act of helping others (whether deserving or not) is the most noble persuit a person can follow. This is because the people who have more (money, time, skills, patience, etc) are obligated to help those with less because their NEED is greater. These folks also believe that those with greater ability OWE it to those with less or none, because no one is any better than anyone else, and they just got lucky in life.
There is another group of people that say that others have no claim upon their time or possessions. That just because another mans NEED is greater than his, it does not entitle that man to anything that you own. A homeless man does not have the right to come into another man's home and take a lamp, just because he has 4 and they have none. This group is not opposed to kindness and acts of charity. But the idea of forced charity via govt wealth redistribution or crippling taxes is not tolerated well. This group of people believe that you must work to earn everything that you have, and only what you have earned is your rightful possession.
I think "at what cost" can be debated. Is it fair to raise taxes slightly to pay for certain social programs? Perhaps... Is it equally fair for the state to demand that all those on welfare must perform some form of work to keep the checks comming? That might be valid as well. While I do believe it would be great if no one was poor, or suffering, or lazy, I also understand the reality of the situation. Utopian societies cannot exist, and to try to create one is an exercise into madness and futility. As I have stated before the best we can ever hope for is to be most fair to most of the people, most of the time. We must always understand and accept that no matter how much we might want to, it would be impossible and self destructive to help EVERYONE. To "save" the last suffering man on earth by sacrificing every other man on earth is certainly not a fair trade. To allow people to "starve on the streets" when a little understanding and education could solve it is not what I would want either. I think somewhere in the middle is where you want to be....