Wednesday, September 19, 2007

To all according to their needs, not their desires

The Fabian socialist credo has been, to paraphrase: To all persons according to their needs, from all persons according to their abilities.

In the perfect Socialist society, everybody gets what they need and contributes what they can. It doesn't matter what you can do, chances are there is a need for it -- from leading the society to picking up its leavings. And in the perfect model, each person only takes what he or she needs and all skills are equally valued.

As air-headed as it seems, it works when people want it to work and need it to work, like in the formation of Israel. Kibbutzim really worked because they were a means to an end -- a modern, safe, self-sufficient Jewish state, not an end in itself. People were willing to sacrifice self for the greater good. And it worked for a while.

It doesn't work any more because some people found their needs to be greater than others'.

If you substitute wants for needs, the whole thing just blows up. Prime example: the housing market over the past few months.

It seems that everyone wanted a house. It was the American see it on television so it must be true. From "Father Knows Best" and "My Three Sons" to today's shows, living in a house is the way to go.

When there is a want like that, there is always someone to take advantage of the people who express that want. So you have people, lots of them, buying houses when they were scraping by, who the numbers show could not possibly afford a house.

The people taking advantage of them are predatory lenders with their subprime mortgages. They offer come-on rates, mumble over or skip the part about a mortgage only being part of the cost of a house and forget about the end of the teaser rate when the payment goes up.

But the "I want a house" crowd is so taken with the concept -- and who's to blame them -- of having your own backyard, of not having to deal with a landlord, of being the king of your own castle.

Now the revolution has begun and the kings are running for their lives. I don't blame them. I blame the regulators who let all this go on. I blame President Bush and his laissez-faire business attitude. I also blame some bankers.

King Solomon, in the Song of Songs, says there is nothing new under the sun. Those of us old enough to remember the housing crisis of the late-80s, knew what was coming. I remember a banker for a bank that was taken down by the huge bankruptcy of a real estate developer.

I had called him to ask about a condo complex that was going up in the Lower Naugatuck Valley. The bank had extended a few millions in credit to the developer for the project. My question was why anyone would want to buy a condo to high on a hill that it would be difficult to reach home in the winter.

The banker was shocked. It's on a high hill?, he exclaimed. The guy had handed over millions of dollars without ever seeing the projected site. The think could have been in the middle of the Naugatuck River for all he knew.

Look, it will all come out. It did in the early 90s and it will now. But many a family dreaming the American dream is now faced with the nightmare of foreclosure, of possible bankruptcy and of starting all over again with lousy credit. And I don't care what the car dealers say, if you have lousy credit, it does make a difference in more ways than you can count.

For those looking at home ownership: Go to a real bank or legitimate mortgage banker or broker. The rule of "If it seems too good to be true, it probably is" really, really is a great guide.

If a real banker is telling you that you cannot afford that house, it is worth giving the idea another good think before jumping into the muddy pool of teaser rates and mumbling salespeople.

Page 2

So, the First City Bank, the nonprofit that is financing the city's resident registration cards, is looking for a new leader.

Chandler Howard is heading for the hills of Middletown to be the boss at Liberty Bank.

I gotta tell you -- I have had dealings with Liberty Bank and I don't envy him. I'm not going to say more, but if the woman I dealt with at the Moodus office is any example...

So now, the group needs a new boss. And the bank won't open until later in 2008, rather than near New Year's Day as previously advertised. What does this mean for the illegals who got the city's card and wanted to wait to open their accounts rather than dealing with Sovereign, which needs a passport with the card in order to open an account for the aliens, or Bank of America, which I think will also take the card but probably with another official form of identification. For illegals, official forms of identification may be hard to come by.

It'll be interesting.

Page 3

O.J. is out of the clink. A lot of people are saying they hope he gets a long prison term, whether he did this robbery or was set up. They say he should do the time in any case to make up for the other case, when he was acquitted when so many people thought him guilty.

It's not good law, it's certainly not justice, but it is tempting to think like that.

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We'll get back on the road soon for our travelogue into the Land of Dixie It's been quite busy around my life, which is why I'm not writing every day. But please check in. Thanks.

Until next time....

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