Labor unions protest in New York against bailout

[dgriffin]

Labor unions protest in New York against bailout



www.reuters.com/article/domesticNews/idUSTRE48O8KJ20080926?pageNumber=2&virtualBrandChannel=0

NEW YORK (Reuters) - Hard hats, transit workers, machinists, teachers and other labor unionists railed against the U.S. government's proposed bailout of Wall Street on Thursday in a protest steps from the New York Stock Exchange.

"The bailout is a sellout unless it includes the victims of the tyranny," civil rights activist the Rev. Jesse Jackson told reporters after the rally. "The homeowners need long-term, low interest rate loans and the restructuring of loans, not the repossession of homes."
"This is a Roosevelt moment," Jackson said, referring to former President Franklin D. Roosevelt's program to lift the United States out of the Great Depression. "It's time for reconstruction of manufacturing law, trade law and banking transparency."
"We know that the economic situation has to be solved. But we want a responsible rescue, not an opportunistic bailout," said United Federation of Teachers President Randi Weingarten.
"And that means, just like every single boss says to me, that there should be accountability for the teachers, then there should be accountability for Wall Street," he said.

###

If accountability for Wall Street will be like the accountability for teachers, we’re in worse trouble than I thought. And notice that Jesse is proposing more of the problem as the solution.

[Clipper]

Amen Dave. The last two lines of that post says it all! I am waiting for Sharpton's take on the subject. It is not an issue of color, but it is a concern of all of middle class america. Why would anyone be allowed, and even encouraged, to take on a mortgage that the bankers had to know would end in default? What has happened to the American people, when they choose to live on credit cards and loans, while burying themselves deeper and deeper in debt? Hell, I was in my 30's before I owned a home, and then it was a modest ranch that I could afford to make the payments on.

When I was younger, and still drinking too much, I got caught up in the Household Finance thing. I borrowed money to keep the lights on, or some such foolish reason, and then when I was short and could not make the payment, they would gladly refinance the loan and give me MORE cash to spend on booze. When I quit drinking, I quickly paid off that mess, and have never been inclined to solve any short term crisis with borrowed money.

Acquisition of material goods, requires saving and sacrifice, until cash can be paid. We don't have to buy the biggest plasma TV on the market, simply because our credit rating says we can borrow $2000, when a $700 TV is plenty large enough for the living room in our home. Soccer moms don't have to drive a Lexus SUV when they can take the kids to school just as efficiently in a mini-van for 1/3 of the money.

We have a 43 inch TV. When we purchased it (for cash) the salesperson was hammering us to buy something larger and more expensive and offering in store financing with the "take it home today" theme. Young couples are sucked into that trap all too often. I guess we all have to go there and suffer the consequences nad fight our way back out of the hole to learn the hard lesson on a personal level huh? Just don't go there for a $250K mortgage, and then expect ME to pay to bail your ass out.

[dgriffin]

Here are a couple of other reasons for bad mortages:

From Daily Kos.
Read full article at:
www.dailykos.com/storyonly/2008/9/25/194612/036/614/610605

"So why are these bad mortgages? Because (a) the people who borrowed money under these mortgages are likely to default on their payments and (b) the value of the property itself has been devalued so that foreclosure won't recoup the lender's investment.

And why are these people likely to default on their payments? It's not as if anyone wakes up one day and says, "You know what would be fun? Getting foreclosed and ruining my credit!"

Well, there are two primary reasons:

(1) They have lost the income that allowed them to make the payments on the mortgage. (They may have lost their job or the other costs of living may have risen to a point where they can no longer afford the payments.)

(2) The size of the payment has increased to the point where they can no longer afford the payment. (The result of an adjustable rate mortgage, a balloon payment mortgage, or similar "teaser rate" schemes.)

There's little that can be done about the former (short of strengthening our economy in general), but the latter is -- once again -- the direct result of deregulating the mortgage industry. The types of mortgages are predatory in nature, irresponsible for both lender and borrower, and (as we have seen) extremely dangerous for our economy.

It should be obvious to anyone looking at this crisis objectively that these types of loans need to be regulated out of existence. Like usury interest rates, there is no reason for them to exist."

[dgriffin]

Here's an interesting angle on bad mortgages.

Bad Mortgages Taking Down Good Loans, Too

from NPR:
www.npr.org/templates/story/story.php?storyId=94921465

"There are about 51 million first mortgages in the United States right now — but only about 1.4 million of them are either referred for foreclosure or in foreclosure, said Mortgage Bankers Association chief economist Jay Brinkmann. In other words, fewer than 3 percent of American homes with mortgages are in foreclosure.

The problem is this: Those bad loans are having an outsize impact on the financial world. They are mixed with good loans in securities that are crippling investment banks. No one wants the securities, even though not all of the loans are bad."

[Clipper]

I guess it is evolution, but there was a time when government had controls on the petroleum industry, telephone communications, loan regulations, and other items. We see what happens when these things are deregulated.

"Regulations" can be modified to meet daily needs, where deregulation has made it an open free for all for industries of all types to take advantage of the American people in the name of free enterprise.

I am sure that if the oil industry was still regulated by the federal government, they would still be making a huge profit, but not as ridiculous as they do now. The citizens of the country WERE protected from gouging by regulating the industry.

Look at cable rates and "bundle" deals that are on the market now. They bait you in, and then increase the costs while diminishing the level of service for the price. Pretty soon if you want to watch anything but cable news, you have to pay for a "premium" package.

There are places in our goverment where it is proper for the government to oversee operations of industries that are necessary to our daily lives. Not all in this country are educated or savvy enough to make the correct decisions in such things as mortgage shopping etc.

I believe in free enterprise, but I also believe it is the duty of our government to protect us from unscrupulous or poorly managed schemes perpetrated upon us by big business.

Government doesn't have to "control" the industries, simply "regulate" them in a fair manner for all concerned.

[dan]

I know this is simplistic but.....

The old adage "If something is too good to be true, it probably is" accounts for most of the bad loans. The people that bought into this interest-only, balloon mortgage market should have seen this coming. The predators can market all the bad deals they want, but if the population was using common sense they wouldn't have been taken in by the bad guys.

[dgriffin]

I'm trying to take myself back to age 23 when I bought my first house. It cost only $14,000 in Syracuse in 1967, but it seemed a lot of money to me. I remember that the bank wouldn't have counted my wife's salary (even if she had been working) into the formula they used to decide how big of a mortgage I could afford. I thought the monthly payment they kept me to was unnecessarily low, but after owning the house for a year, I changed my opinion. Well, I was young and inexperienced. Balloon mortgages must have seemed like an answer to prayer to many young couples trying to buy a house with the expectation that the real estate values went nowhere but up. I forget how short my horizons were when I was young.

[clarencebunsen]

A year ago my son was shopping for a house. The had a child, another on the way and really did need more room. The went to a bank, laid out their financials and came up with a loan amount for which they would qualify. I didn't really pry into the details.

The first offer they made was rejected. Before they made the next offer, he asked me for my opinion. I was amazed by the size of the loan they were considering. I asked him to sit down and make an actual budget based on the house payment he would have to make.

He is intelligent and good with numbers (even though he downloads Beta versions of browsers). A little number crunching convinced him to rent for a little longer. Too many people, however, took that number from the bank and thought they could afford that home they wanted.

[dgriffin]

Good that he had you for advice!
By the way, when you're young, LIFE is a Beta version.
When you're old, too, come to think of it.

[frankcor]

LOL, Dave. Rather, when you're old, you move into a field trial.