Who’s the Idiot?

David Brooks’s column today is titled “Money for Idiots.” Naturally I assumed it must be about a bailout for pundits. But no; the “idiots” are people who are behind on their mortgage payments. And here’s yet another unexpected twist — after berating the idiots for being idiots, Brooks grudgingly admits that we have to help them, anyway, for the sake of the economy.

The nation’s economy is not just the sum of its individuals. It is an interwoven context that we all share. To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.

Well, yes, that really is the bottom line. Talk of whether any individual “deserves” help is beside the point. Letting so many people fail amounts to a national economic murder-suicide pact.

I haven’t had time to digest the details in the save-the-homeowners plan. Edward L. Glaeser, an economics professor at Harvard, provides a brief critique that mostly approves of it.

The Right, of course, is opposed to the Obama plan. They don’t have a plan of their own other than to do nothing, but they don’t like Obama’s plan one bit. Their reasons for disagreement range from the stupid to the stupid and clueless to the stupid and clueless plus hallucinatory.

See also: Ryan Chittum, “CNBC Editor: The People Are Revolting!

26 thoughts on “Who’s the Idiot?

  1. Does anyone know where Brooksie lives? I imagine him in the tony NYC suburbs, and even in Greenwich, CT, real estate prices have plummeted. You don’t suppose Brooksie’s new-found concern for his fellow citizens is driven in part by the realization that some of his wealthy neighbors are underwater on their mortgages? Do you suppose he has any former Lehman workers in his neighborhood?

    Perhaps I’m being unfair, but I have a feeling that in his case, a populist is just an elitist who’s seen his own mansion lose market value.

  2. The current economic “situation” and the cause is like nothing we have seen in history.
    I had a real bad feeling about things to come several years ago.
    Back in ’89, I lived in SoCal. We had a real estate boom in which people were bidding against each other, thus driving the costs through ther roof. The thing to consider about that market, is real estate was valuable because there was only so much available; unless you wanted to move out to the high desert and have a two hr. commute to your job in the city. Many people did just that, and suffered the burn out associaled with a 4 hr commute on top of 8 hrs or more of work.
    In the early 90’s, the home market in L.A. pretty much crashed, many homes loosing 20% of their value. That was a correction, and prices fell back to semi-affordable. One of my good friends bought at the top and really suffered for several years. He was very afraid he would miss the chance to get a home because he, like many ,thought the prices would keep rising.

    In 2007, Osceola Co, Fl. Real estate prices were climbing way out of proportion to the local economy’s, potential to support them; and there is no shortage of buildable land. Everyone wanted a nice big house with granite counter tops, high ceilings, and a pool; one of the local mega-developers actually got the county to get grants for some people who did not have large enough down payments.Many people from out of state and other countries bought properties with creative financing in order to flip them and earn thousands in months. It was a feeding frenzy until the bubble busted.

    The common denominator in both markets is many thought they would not be able to afford property if they didn’t buy when they did.
    Some were greedy, some desperate, some believed they could stretch the budget and hang on until they could refinance at a lower fixed rate.
    There is a lot of blame to go around, but then most people were just playing the game they thought would never end with out a malicious thought or intent.
    On the other hand, there were the “investors” who bought up several properties hoping they would rise, and sell them to make huge profits.
    Something that is different this time is the lack of jobs that pay the salaries required to sustain that type of market, the wheeling and dealing by the big banks and the wizzards of Wall Street, and the fact that our government is about to go bust due to a multitude of natural disasters over the past several years, supporting wars in far away places, and supporting crappy governments abroad.

    When workers at the big three auto makers earn a liveable salary and their companies get into trouble, the right blames the workers.The Teamsters at Sikorski Helicopter just got raises and an increase in benefits, not a peep from the right. Very interesting.

  3. You know what would probably work. Just wiping out a year’s worth of mortgage payments across the board for everyone. By that I mean no one needs to pay a mortgage payment for one year, no penalties, and it’s just as if they did pay it.

    The the catch for that would be that homeowners would have to put a % of their income in savings and pay off % of credit card debt for that year.

    It’s obvious to me that Wall Street doesn’t think much of this current plan. All it’s continuing to do is seek out how low it can go. I think all they’re hearing is the rush to print dollars by the FED and that’s driving up future inflation. Which explains why ExactPrice shows gold continuing to rise. It won’t be long before it’s testing last years highs and going further, I think. Right now it’s sitting at $997.10 an ounce.

    Tells me that big time investors are buying it up quick as a hedge against a dollar that looks like burned toast.

  4. People need to get used to the idea of “systems”…systems that sustain us or hurt us.

    The reduction of everything to personal trait or anecdotes that generalize some behavior and create a group out of it (a group that someone can connect in their mind to a visually identifiable group as they usually do) misses the entire point that our systems cannot crumble due to human nature.

    We can’t all be wrecked because there are people who would take on more debt than they could handle and most of all, we can’t ignore those who profit from it by doing a swithc and bait of bad debt then blame someone else.

    If there were no profit in crime or sufficient punishment then the crime would be miniscule and this lending without sufficient qualifications would end.

    I’ve been following Brooks for a while and he’s just dense. He believes himself and has an almost child-like relationship with his own super-ego. Maybe Mommy and Daddy loom large in his thinking.

    Run along little David. Stop playing with ideas, they are shart objects and you might hurt yourself if you ever see the light of day.

  5. Sorry. afterthought. Brooks uses the “everyone should be good like me” approach that so many conservatives do. Their every judgment and approach to resolving problems does not involve fixing a flawed process but lamenting imperfect human nature. It always gives them someone to blame and rail on about.

    Meanwhile the rest of us are all neck deep in s**t because our lives, despite being full of imperfect people, including ourselves, are not served by government, finance or anything else.

    Until we the dawning of a utopia full of David Brooks, God help us all, the rest of us will just have to suffer. A child like and naive government will just act like the utopia has arrived and won’t take into account reality.

    I don’t need to get into policy minutae to understand the collective neuroses of the right. In fact, that just distracts us from seeing these types in the kind of light we need to see them in. It takes them seriously when their personal quirks make them stupid.

    You cannot teach a pig to sing. It will never learn and you’ll just piss it off in the process.

  6. Hi Erin,

    I’ve lived in both FL and CA, now in CA. The market had risen so high in CA that people were buting houses with loans for which they could never pay off the principal just hoping to churn it and make a short term killing from equity. Thiose were the ones who really lost their shirts. They didn’t even want to live in the houses. I have less sympathy for them than families who really did want the security of home ownership even though many of sinserve homeowners should have gotten into a more humble abode.

  7. Brooks’ opinions are as useful as mammaries on a male bovine. And a lot less thought provoking.
    I don’t think he talks to regular people at all. So, why should I read him? I don’t. I don’t care what he says, what he feels, what he thinks. He is completely clue-free. This jackass hasn’t had an original idea since the Reagan Adminstraion – and that may be giving him too much credit.

    It’s not just politicians, we need term limits on pundit’s, too.

  8. To Pat – Brooks has always reminded me of the Dicken’s character, Uriah Heep, your most ‘umble’ servant – not so much by what he says but by his general air of cloying humility, obsequiousness and general insincerity. Rather turns my stomach to watch him, in fact.

  9. Sorry, I am not a troll, but I agree with Brooks for a change and think he actually has come quite far in taking the position that we have to help out the greedy, irresponsible and just plain stupid folks who bought houses they could not afford or gambled that everything would work out–ie housing prices will continue to rise, interest rates will stay low, I will win the lottery whatever. I am not about to cut off my nose to spite my face, but it certainly angers me that my tax dollars will go to pay for my neighbor’s house and IMHO any progressives, populists, liberals or whatever label you prefer, do not get the idea that there are a lot of hardworking people of relatively modest means who are current on their morgages or did not buy houses because they did not think they could afford it, feel exactly the way I do, then your political power has peaked and you will be back in the wilderness shortly.

  10. I lived for years on my $25-30K salary (academia) and watched other people with nice clothes and new cars and vacations and thought, WTF? Am I dumb? What am I missing? So I personally don’t want those people who abused their HELOCs (Home Equity Line of Credit) and used them as piggy-banks to be bailed out.

    I do, however, understand the desire to stabilize the neighborhood’s prices so that fewer people are tempted to default.

    But it still irks me that there is no way to reward prudent people. Does anyone have a suggestion?

  11. I remember getting a mortgage in the early nineties, you had to put money down, prove your income and assets for past 2-3 years, have a good credit score and the house had to be worth what you were paying. that was before the financial sector decided to make the lortgage businees a flip cash cow- make your money, everybody invoved got a cut and the mortgage was passed off to others to be sliced and diced. Now I really don’t have sympathy for the people who were taken in by seemingly easy terms but they could not have been foolish if someone in a place of responsibility was not enabling the foolishness. Obviously business cannot regulate itself. The financial sector created this and was enabled to do so by an absense of government oversight- no one cared what would happen, you could see this train wreck coming years ago. No one can use the condi rice line ” No one could imagine this would happen”. Now that it is happening the Right wants to blame the individuals at the bottom of the pile( big news they always do that) and say nothing about their own culpability in creating this mess, just criticizing those trying to stop the hemorrhage. This kind of media blindness is typical. Last night I saw a news story about a ninety year old who is working at a grocery because Madoff made of with his entire fortune. Yes the man is upbeat and an inspiring personality but this is a pig people and he is one in a million and the reality is that we need to ask why 90 yr olds are having to go to work and instead of trying to put lipstick on a pig and paint rosy pictures. the media people want to cutesy this and when they can’t they villify the victims.

  12. Terry,
    Where you offered one of these deals? I was.
    I was smart enough, or lucky enough, not to go along.
    The gig was this: Real estate prices always go up. So, sign on the dotted line, brother. Yes there’s an ARM, but it doesn’t come for 2 to 4, 5 years. In that time, you can sell the house and walk away with a lot of money.
    I didn’t buy into this only because I was in debt due to stepping down from a mangement position, and I didn’t see myself staying in the South for any length of time. But, it sure sounded like a good idea!
    Many of the people were lied to. Others just wanted to have a house, like their parent’s.
    Declining real income for the lower and middle classes meant that those who had homes, leveraged them to buy stuff that showed their parent’s that they were at least as well, if not better, off than they were.
    To those who were poorer, this BS deal with the Devil, was their entry into the American money game. How can you lose? Real estate always goes up, so you have absulutely nothing to lose!
    Don’t blame those who fell for the lies. Blame those who created the bubble of lies, and those who blew it up until it burst.
    The whole bubble was created to take the pressure off Bush after the ‘.com’ bubble burst and we were threatened with a MAJOR recession. The Republican’s couldn’t have that if he was to be re-elected. A major war, and a major recession don’t look good for a re-election campaign.

  13. Jeesh, Luishe,
    One glash of red zinfun, zinfo,… red zin, an i sudnly kant shpell. Sorrhy!
    Innkeep, an udder bowl of u’r besht grog! What, I’m cut off!

    Looks like it’s more than my comment that needs moderation! 🙂

  14. Like Brooks and Greenspan, Rick Santelli is an incompetent buffoon. His own companies’ “House Of Cards” TV show was a good explanation of how using unregulated real estate backed credit schemes as the ‘next big economic thing’ was idiotic and disastrous for America, as well as predictable.

    I’m no political/economic wizard, but pragmatic enough to know that in bad times “conservative” government would sell itself best if it could at least try, to efficiently resolve issues which people absolutely cannot effectively resolve themselves in bad times, while in good times it at least tried, to provide just enough issue resolution to keep potential trouble in check. But they don’t even know what big problems are, or what potential trouble looks like anymore, they’re so ideologically unbalanced. And now nobody intelligent is falling for their act.

    In that House Of Cards show Greenspan’s last comments were along the lines of: ‘Uh, well, it was either pump up a balloon til it pops, or regulate things into a recession… But look over there at socialism – it’s baaaaad!’. What a bunch of worthless ideological crap.

    We cannot dispose of these self-entitled clowns soon enough.

  15. Gulag… eat bread first, it soaks the grog right up! First thing I learned in college.

    In reply to Brooks, that CNBC shithead, and those who agree with them, I have to paraphrase Ben Kenobi: “Who’s the bigger fool? The fool, or the fool who lent him money?”

    But it still irks me that there is no way to reward prudent people. Does anyone have a suggestion?

    Jennifer, you make a good point… but how should we define “prudent”? I’ve never owned a home, and for the past 5 years I’ve only paid down personal debt, without incurring any new debt. I thought I was being prudent, a couple years ago, when I maxed my payroll deduction into my 401(k), but now I wonder if I should’ve just burnt the cash on a bonfire.

    Old Brooksie does get one thing right: our economic system is so entangled, we can’t cut loose the imprudent home-buyers or equity-wastrels, or they’ll drag many of us “prudent” people down with them. The goal should be to rescue the mortgage (and, in doing so, rescue the homeowner). The debt won’t be forgiven, but it should be made manageable and thus, eventually, be paid off. That’s what Obama’s plan appears to do. To quote from Gleaser’s critique:

    To deal with their potentially delinquent mortgages, the plan embraces a clear renegotiation standard. Current homeowners can refinance their mortgages at current rates if those mortgages are less than 105 percent of the value of their homes. This approach has problems, but it isn’t unreasonable. It creates a general refinancing option that will reduce the risk of default for a large class of homeowners.

    I think we’re way past the point of getting mad at stupid people. Now I’m just thankful for the smart people.

  16. Joan,
    Thanks. I knew that!
    I was a professional lush in college. I was a member of that great Frat, Tappa Kegga Beer. 🙂
    I almost joined Aye Delta Ounce. But they asked for too many ‘reefer-ences.’
    And I couldn’t remember any of them.
    It was just funny to me that one glass of wine in mid-afternoon made my spelling in that one post look stupid. After dinner, no matter how much wine, I’m fine!
    But, look forward to more stupidity to follow!
    Apostrophe’s are my mortal enemy! I think it’s because Russian was my first language, and we don’t have anything that stupid in our language.

  17. c. gulag,

    As far as apostrophes go, just say NO! The apostrophe is for possessives, i.e. my mother’s cake or to shorten a verb, i.e. he’s in trouble rather than he IS in trouble. If it’s a plural, i.e. mothers went on strike to protest against George Bush, there’s NO apostrophe. You may not have apostrophes in Russian, but I’m sure you have possessives and plurals, so no excuse.

    P.S. Both my parents spoke Russian, but they divorced when I was very young and my mom always spoke to me in English. I really regret never having studied Russian. I speak French though…and French doesn’t use apostrophes the same way English does either.

  18. Apostrophe’s are my mortal enemy! I think it’s because Russian was my first language, and we don’t have anything that stupid in our language.

    I don’t think anyone does! I blame the French, and their silly old invasion of 1066. They do love excessive punctuation. Get a French person drunk, and they can still punctuate correctly. Show-offs!

  19. Joan,
    Now, now, don’t be hasting, uhm, hasty… We can’t blame 1066! It’s just, like, soooo 11th Century!
    And, don’t you wish it wasn’t ‘William of Normandy,’ but ‘Norman of Williamby?’ SOOOOOO much funnier…
    And, like, any person, like, with a simple langauge, can get, like, as drunk as they want, and, like, still puncture, I mean, punctuate, like, still correctly – u no watt i mean!

  20. There was a time when putting money into a 401k was prudent. Then the sociopaths took control.For the past three years, I’ve been buying tools and investing in myself, thinking that if my wife or myself(or both) lost our jobs, at least I could support us.
    I read a lot of stuff at Lewrockwell’s site.The Austrian style of economics is pretty cool, as long as everything goes right, and there are no sociopaths playing the game.I can imagine playing in a football league with no rules. Pretty soon someone would decide to allow their team to use fists, then clubs.

    As far as “rewarding” prudent people goes, HA!. The only people government “rewards” are dead or maimed soldiers, and people that give large donations to political parties. Our reward is to live another day without a fine or a warning, and that’s just fine with me.I can keep my shoes on, so long as I don’t want to fly.
    “Freedom’s just another word for nothing left to loose…….”

    The bumper sticker read “Piss off a liberal: Work hard and be happy!”
    Where do they come up with this crap?

  21. erinyes,
    “Where do they come up with this crap?”
    Ever stick your head up your ass?
    Me neither…
    But, it we did, we’d come up with shit like that, too!

  22. Let me get this straight. Top level financial executives get paid $15 million to $500 million a year. They are the brilliant brains whose genius created the potential for everyone to get rich. They are so smart their baseline assumption was that housing prices would never again go down. They are so smart that their baseline assumption proved false, which led to driving their corporations, the life-blood of the whole world’s financial system as we say these days, off a cliff.

    Brooks supported wholeheartedly bailing these corporations out to the tune of however many hundreds of billions were necessary. Meanwhile these brilliant executives were rewarding themselves with additional multi-millions (billions?) in bonuses, from the money taxpayers were giving them to save their sorry asses from the brilliant job they did in running their corporations into the ground. The premise I guess is they did such an incredible job of that they deserved to be duly compensated.

    Brooks thinks this is all fine. Meanwhile, people bought homes they couldn’t afford financed with mortgages ultimately financed with money raised by these same giant financial corporations. The fees “earned” from all those sold and securities created, was the source of all the profits the financial geniuses were so highly compensated for, earned as they were laying the foundation for their unsustainable business model driving their corporations, and then the whole world, off the cliff.

    Those guys are geniuses who just had a few bad years. The people who bought what they were selling, they are idiots.

    When you look at it through a Bernie Madoff mindset, he just might be right. When being a greedy crook who could give two hoots about anything other than personal power and prestige at any cost, from that perspective they (we) WERE all idiots. Because from that perspective, the only way to not be an idiot, in their eyes, is to be smart enough and reckless enough to be a greedy crook like they are.

    Something is very wrong with the way have been looking at life. We are increasingly being ruled by sociopaths, and our pundits aren’t bright enough to notice. That is my definition of an idiot. Yes, Brooks, I’m talking about you…

  23. a Canadian Reader,
    Thanks. I love your posts, btw.
    I’ve studied, and studied, and had the NY Times style book, and Strunk and White. And I still don’t get them. I can tell you when you need to use them – and I still get them wrong.
    I must have been molested by an apostrophe in my youth… Who do I sue?

  24. Interesting…it’s okay to bail out the wealthy but not the working poor and middle income. There is something wrong with this scenario. The wealthy do not have any idea of what real families deal with day by day, week by week and so on. You have to wonder if they have ever lived on a budget then had a minor catastrophe tip the scales. Bailing out Wall Street is offensive to every one who works for a living. They are greedy and ready to take from everyone else. They show NO compassion.

    We recently had a $3100 Roto Rooter bill. Fortunately, we were able to pay it with money saved for retirement. We would like to retire soon and we still have a house payment. Our retirement savings was cut in half with the recent Wall Street fiasco, through no fault of our own Any kind of help we could get would be great.

    My heart goes out to the people, who in good faith, got their “American Dream.” Their own home and now have lost jobs, have catastrophic medical expenses or any other of the economic problems we are all facing. They deserve all the help they can get. This is a lot like capital punishment…killling one innocent person is one too many…failing to help one homeowner because of the stupidity of theres is one too many.

  25. Terry, I think you are terribly misguided and if everyone in government fixated on the incorrectable aspect of the problem as you are doing we’d be even worse off than we are now.

    I won’t quibble about the irresponsibility ans ignorance of those who would assume debt they cannot repay but focusing on that as the way to prevent financial meltdown is naively utopian, will not work and misses the point.

    The systems that sustain us all must sustain us in spite of human nature. The regrettable aspect of human nature that you fixate upon cannot be wished away, used to distract us or absolve government from it’s responsibility to safeguard us from financial meltdown that our own CIA considers a greater threat to our safety than terrorism.

    When you come back to earth with a willingness to engage in practical solutions I’ll consider your posts seriously. Until then the ideas in your post seem like pointless whining without much of an appreciation of where responsibility lies for the maintenance of a functioning economy that we all need.

    It makes about as much sense to be distracted from legislating regulations that prevent economic meltdown by blaming those wrongly took advantage of lack of regulation as it does to repeal all the criminal code and blaming the criminals for the current state of permissiveness and leniency. Society bears responsibility for establishing safeguards that protect us against both crime and financial ruin.

    Your inability to come to grips with any practical solution is about as looney as it gets. You probably don’t even understand how I could say this and still agree that people should not assume debt they cannot repay.

    You seem confused over cause and effect. The cause was that the system as deregulated would not withstand what we would normally expect to happen. The borrowers are to blame for their bankruptcy. The blame for deregulating a system to a point that made it susceptible to ignorance and lead to financial catastrophe rests on others.

    It is the fiduciary responsibility of those in the finance industry to uphold practices that prevent financial ruin in this country. When those in the finance industry are irresponsible they need to be regulated.

    I am grateful that those charged with getting us out of this mess and preventing it from happenign in the future will be seeking practical solutions rather than blame that accomplishes nothing.

    Your focus seems a little unhinged…cognitively.

  26. Uh Pat, like Brooks, I said I would not cut off my nose to spite my face. That was basically the position I took last September with the TARP. I did not like that either, but recognized that we could not let the entire banking system collapse in a matter of days. Somebody–not you- made the legitimate point that a lot of the problems come from middle class people trying to live their parents lives with flat or declining real incomes. I appreciate that sentiment, but then they should not have voted for Republicans, rather than act in in fiscally imprudent ways. And just so everyone who still bothers to read this post understands, the mortgage problem is not primarily a poor person problem, it is a middle class and well to do problem and I do think that the shareholders–including the poor widow sand orphans, as well as the fat cats–in the insolvent banks should get wiped out for the bad bets those overpaid CEO’s made.

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