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November 20, 2008
Tens of millions of Americans who live within their means, make regular payments on mortgage loans which they can afford, and have money—perhaps their life savings—invested in corporate stocks are the principal victims of the current economic crisis, but is their story being well enough told?
Politicians and most of the national news media concentrate on savaging “Wall Street” and sympathizing with—and bailing out—Americans who are poor credit risks but who, with government encouragement, were willing to gamble on the chance that housing values would continue to increase so that they could repay mortgage loans which were clearly not justified by their creditworthiness.
But I have yet to read or hear of detailed interviews with a representative sample of those Americans who have seen their stock investment portfolios drastically reduced in value because, basically, of Big Nanny government efforts to put low-income people into houses they really couldn’t afford.
So a good many Americans who have lived within their means but now find their life savings and retirement plans threatened by the stock market collapse will be expected, as taxpayers, to share the 700-billion-dollar cost of efforts to repair the damage—damage resulting from pressure from the federal government on banks and other lenders which resulted in mortgage loans which wound up, finally, in the hands of Wall Street investment bankers who certainly should have known better.
Speaking of Wall Street investment bankers:
Some of them—perhaps most—surely must be a breed apart if they have to debate for one minute whether they should forego multi-million-dollar bonuses at a time when their firms are collapsing or merging or looking at reductions of 60% of more in the market value of their stock.
I found it nearly incredible that top executives at Goldman Sachs Group Inc. are trying to put a noble face on their decision to forgo 2008 bonuses. A Wall Street Journal story reported that this decision followed “months of internal debate,” this at a company whose stock price had fallen more than 60% this year.
Seven Goldman executives are giving up bonuses potentially totaling in the tens of millions of dollars because they decided this was “the right thing” to do, in the words of a company spokesman.
I think the great majority of Americans would feel it was not only just “the right thing” to do but the only thing to do and the fact that the decision was debated for months indicates the whole system of Wall Street executive bonuses ought to be very carefully reviewed.
* * *
Final thoughts—for today—on the subject of the federal government’s disastrous venture into promoting mortgage-financed home purchases by Americans whose creditworthiness could not justify the mortgage terms. (This was described by some as giving every American a chance to realize “the American dream” of homeownership.)
A recent news story gave sympathetic treatment to the plight of a woman, employed with a reasonable salary in what would be considered a good job, who had paid $600,000 for a home and was now having mortgage payment problems because she couldn’t find a tenant to rent part of the home.
The definition of an “American dream home” seems to rise to a pretty pricey level when a “dream home” can cost $600,000.
What, incidentally but importantly, are the specific proposals for giving relief to people like the woman who bought the $600,000 house? And, of course, to others who paid less, but in some cases bought a house, sold it for a profit and then bought another house, all with the help of the government-promoted mortgage loan.
In an editorial criticizing the government for not giving help faster, The New York Times suggested that hundreds of thousands of troubled homeowners were qualified for bankruptcy and hundreds of thousands of others would be helped if lenders and investors opted to restructure bad loans. Examples of “restructuring” cited by The Times would be “a fast-track process to lower troubled borrowers’ monthly payments to an affordable level, either through a longer repayment term, a lower interest rate or deferral of payment on part of the principal.”
But The Times preferred bottom line would be to follow the path proposed by president-elect Barack Obama: Ask Congress to amend existing bankruptcy laws so that homeowners could have their mortgages revised in court. Such “bankruptcy restructurings…would cost the taxpayers nothing,” The Times editorial said.
Have we really come (sunk?) to the point where as a result of unrealistically liberal government-encouraged lending policies, the president of the United States and the Congress would decide that the way to realize “the American dream” of homeownership is to go bankrupt?
* * *
During the height (or depths?) of the Obama/McCain campaign, there was a good deal of criticism of what Obama supporters said was negative, unjustified campaign rhetoric originating with Republican candidate John McCain, his running mate Sarah Palin or their supporters.
It was easier for Obama to stay above the rough and tumble campaigning when he had so many fanatically loyal supporters (and Republican haters) firing insults.
Consider some cheap shots from The New York Times stable of columnists.
One columnist described the Republican Party as being consistently guilty of a “wrong headed, favor-the-rich, country-be-damned approach” to public issues.
Another Times columnist, Princeton University scholar Paul Krugman (recently awarded a Nobel Prize in economics), described John McCain as “more frightening now than he was a few weeks ago.” Krugman also described the GOP as having become “the party of stupid.” After Obama’s victory, Krugman wrote:
“If the election of our first African-American president didn’t stir you, if it didn’t leave you teary-eyed and proud of your country, there’s something wrong with you.”
(A very great many Americans, including many who voted for John McCain, were impressed by the election of the first black American and wish him well in one of the toughest and most important jobs on earth. But I don’t really think “something’s wrong with you” if you weren’t moved to tears.)
Frank Rich, The New York Times hater-in-chief, started a recent column by referring to “poor old John McCain” and ended it with these words: “What he has offered his country this year is an older, crankier, more unsteady version of Bush. Tragically, he can no sooner escape our despised president than he can escape himself.”
* * *
A saying once used by a great friend of mine, the late James Green, an Omaha attorney, came to mind when I listened to a debate about whether Obama’s economic policies sound like socialism. I heard Jim Green once say in regard to a political issue: “If it walks like a duck and sounds like a duck, it’s probably a duck.”
We shall see.
* * *
Former Nebraska Governor and Senator Bob Kerrey is a good friend of mine who for a number of years now he has lived in New York City, where he is president of New School University.
He endorsed Democrat Jim Esch for election as Nebraska’s Second District Congressman and included a misrepresentation of Republican Representative Lee Terry’s position on veterans’ benefits.
An opinion piece written by Kerrey endorsing Barack Obama, a piece written for the New York Daily News, appeared in The World-Herald under the heading “Midlands Voices.”
I would think that the importance of Kerrey’s views on Nebraska politics would or should steadily decrease in proportion to the years that have passed since he became a New Yorker. Much as I like Bob, I find it hard to regard his as still a “Midlands voice.
* * *
I think it appropriate to start today’s closing column item with those beautiful lines from the great Irish poet, William Butler Yeats:
Think where man’s glory most begins and ends,
And say my glory was I had such friends.
Today I write about two such friends, the late Don Forney of Rushville, Nebraska and the late Bernice Labedz of Omaha.
The first two paragraphs in the World-Herald’s story of his recent death beautifully captured the spirit of the late Don Forney:
“Don Forney, who for decades brought people from across Nebraska together on his Sand Hills ranch near Rushville, collapsed and died Tuesday.
“He died as he lived—looking forward to getting people together on his ranch to socialize and work on making Nebraska a better place. Nebraska Game and Parks commissioners and other guests were planning to eat dinner at the ranch Tuesday afternoon, then hunt turkey there today before a commission meeting in Alliance on Thursday.”
Don died in his ranch home as he was preparing to entertain Nebraska Game and Parks Commissioners later in the day. It was typical that at 83, Don was still not only willing but eager to continue his longtime work of bringing Nebraskans together.
My son David and I were frequent beneficiaries of the friendship of Don Forney and his charming wife, Olive, who died in 2002. One of my most cherished memories of Don’s hospitality and friendship was the occasion when Dave and I suggested that Dave and three of his Tomcat fighter plane VF33 naval squadron mates would surely enjoy a chance to hunt pheasants on Don’s ranch. His prompt reply went something like this: “You bring those flyers out here.”
Don was a World War II Navy veteran. He was widely known for his thousands of hours of accident-free single-engine flights which often involved missions to help friends, including dropping food to snowed-in ranchers during the blizzard of ’49. (He also shot, flying alone in his single-engine plane, enough coyotes during each of several winters to supply the wives of friends, including my Marian, fur for a coyote-pelt jacket.)
During my years on the Nebraska Game and Parks Foundation board and as an Omaha World-Herald staff member, I have had the good fortune to know people all across this great state. I’ve never met a finer Nebraskan than Don Forney.
Nebraska lost another fine citizen in former State Senator Bernice Labedz.
Her death at 89 brought back memories of our friendship and her outstanding public service as a Nebraska state senator and member of the Douglas County board. As noted in a World-Herald editorial, one of Bernice’s lasting achievements was the passage of a parental notification requirement for minors seeking abortion. As a state legislator, she pursued that goal relentlessly, finally winning passage of the law in 1991. It remains in effect.
One account of her death noted that many South Omaha residents can attest to the warmth of Bernice Labedz’s personality and outstanding record of public service. I would simply amend that praise to say that Bernice’s warm personality and dedication to public service were known and appreciated far beyond the South Omaha which she so loved.
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