September 3, 2007

Ant’s Labor Day Theses

From: The Worker Ants of the U.S. Economy

To: The Grasshoppers and Ruling Class Politicians who support them



  • Calling people who got 110% LTV interest-only loans to buy houses “homeowners” is ridiculous and insults the intelligence of anyone who can count.
  • The correct term for these people is “over-leveraged real estate speculators”
  • Calling financial services conglomerates that issued 110% LTV interest-only loans to people who couldn’t possibly repay them unless prices continued to skyrocket “distressed lenders” is equally ridiculous.
  • The correct term for these institutions is “over-leveraged real estate speculators”

Politics – New Rules

  • Politicians currently stumbling all over themselves to get on tv to talk about their shock and dismay with “reckless”, “irresponsible” and predatory lending are required to state at the outset of any interviews their reason for not being concerned with this problem back when there was still time to actually do something about it.
  • Politicians from New York and New York bedroom communiities are not allowed to demagogue on behalf of “homeowners”, period, without first returning all campaign contributions from hedge fund managers who live in their districts.
  • Senator Chris Dodd, in particular, must make the following truth in advertising disclaimer prior to all public comments on the subject of subprime lending. “My name is Chris Dodd and I’m a whore for the financial services industry.
  • While we’re at it, it would save a lot of time if politicians just wore sports jerseys naming their corporate sponsors (like Nascar drivers do) to make it easier to tell who they work for.

The Economy

  • At it’s root the “mortgage crisis” is nothing more than an affordability crisis.  Put simply, people with good jobs, good savings and good credit can no longer afford to purchase a home in many parts of this country without taking on a suicide loan.
  • There are exactly two ways this situation can be corrected in a free market – prices have to drop or incomes have to rise.  A lot.
  • Contrary to popular belief, a housing price contraction is one of the best possible things that could happen for the long term health of the American economy.
  • Those who dispute that fact please answer this question:  pretend you’re a 30 year old software engineer (one of the few industries where America still makes something that the rest of the world wants to buy, and has a positive balance of trade) working in Silicon Valley and competing with engineers in Bangalore and Bulgaria who can live handsomely on $10/hr.  Does being forced to pay 1 million dollars for a starter home make you more or less competitive in the global economy?

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