Robin Hood Bush?

Yes, we all know that this is the administration that robbed from the poor and gave to the rich and there are countless examples of that. The most obvious one are the lucrative contracts given to friends of the Bush Administration in Iraq paid for by the US taxpayer. And this was generally true.... until the current financial bailouts. My view on what the Bush Administration is doing lately is that shock, shock, shock, they are stealing from the rich and giving to the poor.

I know most of you will think I am wrong. And I may be, as only time will tell. But allow me to make my point. My thinking here is that when confronting the property bubble, Wall Street analysts have underestimated the ability of the average US citizen to pay his/her mortgages. This has depressed the mortgage asset class beyond reason.

I believe that over the next 20 years, many of these "worthless" mortgages will turn out to be very valuable and partly or fully repaid. As a result, I think that by buying these mortgages on the cheap from Wall Street the US government will engage in a gigantic Robin Hood like effort and steal from the bankers and give to the average tax payer. Moreover, Paulson and the guys now at Treasury are bankers and they think like bankers. They are hired guns who make money for whoever they work for. And now they work for the US Treasury and they are making the deals of their lives, but, paradoxically, on behalf of the American people.

Comments

[QuietNetworker]

Thank you for the article Mr. Varsavsky,

Your take on this problem is visionary.

There are more examples of manias in the market causing even the fundamentally worthless to be treated as gold (Tulips in 1600's,the South Seas Trading Company, in the 1700's, the "nifty fifty" stocks of the second half of the 20th century, Beanie Babies more recently, and tech stocks and the housing markets at the end of the 20th century and to date in the 21st century).

And in the cases where the underlying item has real value (as do mortgage backed securities), the panic following the end of the honeymoonia, is also overly intensified.

Thus, your reasoning and your trust in the "American Dreamer" to achieve home ownership is likely solid. Additionally, with additional prosperity and management of the new post-industrial economic challenges (ie alternative energies, green technology, etc), the future ability of home owners to pay will be noteworthy.

Now the real question is, say the loans become productive...

...how do we ensure that the "guardians" of the Treasury use it soundly?

I would like to see every dollar in gain not turn into a tax relief dollar but rather say a repurchase of treasury notes, bonds, and bills...

...especially from China and Middle Eastern nations.

Warmly,

Paulie Sabol
Quiet Networker.

[eden4barack08]

HuffPost's Pick

Maybe off topic, but on the mortgage and "poor" people subject; why oh, why doesn't anybody understand or say that while some where advantaged by the lax mortgage lending rules benefitting the low income, no credit families, the reason they suddenly became unable to keep up their payment is due to the terrible eight years of Bushonomics that caused them to lose their jobs in the first place?

Let's hypothetically say that Clinton was still President after they got these mortgages, and the economy was still booming, jobs still being created, these people would have been able to keep making their mortgage payments and keep their homes. To say they were irresponsible is to say they could have predicted that under Bush their jobs would be lost, and their economic situations would change dramatically.
Come' on, let's be honest here, the Fannie/Freddie issue was signed in good faith during Clinton to help the middle class afford buying a home, but the middle class was strained by the Bush and Republican trickle down ideology, that decimated jobs here at home, making it harder and harder for those mortgage holders to make their payments.
They want to go back and back to place the blame, but in any business, the buck stops at the Boss's desk, and that would be Bush for the past eight years, and it's happening under HIS watch.

[Phil Waste]

Why are Americans taking this lying down? Why are they not boiling out into the streets mad as he ll? Have we become so weak and soft that we can"t stand up to those who will rip us off? Me? I"m old but I"m about ready to be an "Army of one" and go to Washington and take these bas ta rds on.

[Galt907]

A nice thought, however, I fear, not accurate. Mortgages will continue to be foreclosed against workers who are underpaid or forced to choose between healthcare and mortgage payments. If real income continues to decline, the foreclosure rate will stay high or even increase. These same taxpayers, who then lose their homes, will be forced to continue to pay for their lost homes in the form of higher taxes.
Ergo, the rich get richer and the poor stay poor.

[jdbid1]

Unfortunately, I don't share your same optimism. I look at this as being another opportunity for the financial institutions to unload all their bad paper at the expense of the tax payers. They will be given a clean slate to start their bad practices all over again. Those that have reaped the benefits of this whole debacle will not be held accountable and are likely working on ways to cash in on this bail out.

[fairwitness]

"Paradoxically", indeed. To finally, after all these years and countless billions in grand theft, graft and corruption, do something on behalf of the people must be driving them bonkers--in their shame, they may no longer be able to show their faces at their exclusive Wall Street clubs.

But who thinks they won't find many secret ways to line their own pockets from the proceeds of the largest underwriting scheme in history?