In their stump speeches Barack Obama (D-IL) and Hillary Clinton (D-NY) have done their best to create what Washington Post columnist George Will calls “economic hypochondria,” and their surrogates in the MSM are laboring mightily to find everyday folks who can put a face to the suffering the candidates claim is caused by the “housing crisis” and the “stock market meltdown” However, Will’s paper has thus far been able to come up with examples of folly and fecklessness that play right into John McCain’s (now slightly wobbly) preference to let events play out.

Arguing that “the vast majority of homeowners will remain well ahead, even after the market corrects for housing inflation” -  between the beginning of 2000 and the middle of 2006 average housing prices rose 93 percent, whereas between January 2006 and January 2007 single-family homes in major metropolitan areas lost 10.7 percent of their value – Will points out that “so far during this ‘crisis,’ the homeownership rate has declined just three-tenths of 1 percent [and] at 67.8 percent, it remains higher than it was when President Bill Clinton left office.” Here’s one economic victim whose story Will came across: 

Declines in housing values and the stock market are causing some Americans to delay retirement. A Kansas City man had been eager to retire to Arizona but now, the Journal says, “figures he’ll stay put for another couple of years.” He is 59. 

So, this is a facet of today’s hydra-headed “crisis” – the man must linger in the labor force until, say, 62. That is the earliest age at which a person can, and most recipients do, begin collecting Social Security 

As conservative pundits and economists have noted, sub-prime mortgages comprise a fraction of all home mortgages, and only a fraction of borrowers with these loans are unable to meet their obligations. “Casting this minority of a minority as victims of “predatory” lending” writes Will, “fits the liberal narrative that most Americans are victims of this or that sinister elite or impersonal force and are not competent to cope with life’s complexities without government supervision.” 

The WaPo found two such people libs would describe as victims of predatory lending, but who the rest of us would describe as victims of their own stupidity – and there ain’t no government program to save people from themselves. Nor should there be.

 Eight years ago, single mother Kimberly Mitchell, 38, bought a spacious three-story townhouse in Prince George’s County, MD, that was close to a good school. She paid $200,000 and took out a fixed-rate mortgage with a 7 percent interest rate.  So far, so good. But then Mitchell – who had a job paying $90,000 a year with bennies – decided she wanted to “have it all” and made a series of disastrous (some would say irresponsible) career and financial decisions:  

Longing for a chance to start her own business and spend more time with her son, Mitchell left her corporate job in 2002 and started a day-care center in her home. … [S]he decided to refinance her home in 2005 and tap its equity to consolidate bills. Her loan officer steered her to an 8 percent adjustable-rate mortgage, assuring her that she could refinance later and return to a fixed-rate interest loan. 

Mitchell said her monthly payment jumped by $300 a month, and she quickly fell behind. She later learned that her property taxes of more than $3,000 a year were no longer a part of her mortgage payments. In October, her rate will increase to more than 10 percent. … 

She acknowledged that she was too trusting and did not read all the paperwork, which she regrets. 

Now she is stuck. … 

Mitchell, who owes $260,000 on her mortgage, said she tried to refinance at a lower rate, but lenders said her credit was not good enough. 

So she put her house on the market. List price: $350,000. 

Note that even if Mitchell gets 10 or 20 percent less for her home than her asking price, she still walks away with a small profit that she can put towards paying her bills and repairing her credit. She can live in an apartment for a few years while she saves up for a down payment on a more modest home within her means. To be sure, she is struggling with the consequences of her own actions but she is hardly ruined. Mitchell does not need a taxpayer bailout, she just needs self-discipline.

And then there’s Glenda Ortiz, a cook at a Best Western married to an air conditioner installer. She spoke to the WaPo reporter in Spanish – the paper does not divulge her immigration status, natch – and holds her out as an example of “what can happen when a hot real estate market collides with cheap credit, lax lending standards and little oversight”: 

She looked at only one house and paid too much for it: $430,000 for a run-down, one-story duplex in Alexandria, triple what the house had sold for the year before, and $5,000 more than the asking price, according to real estate records. 

She agreed to a high-interest loan that would cost her more than $3,000 a month, more than 70 percent of the $4,200 that she and her husband brought home monthly. 

She signed papers in English that she didn’t understand. One said she was married to a man she didn’t know. 

She placed her financial future in the hands of a woman she barely knew who sold cosmetics and jewelry door to door. She sought no one else’s advice. 

Her loan application sailed through an originator and was accepted by a mortgage company, both specializing in customers with “less than ideal” credit. 

And so, in August 2005 … Ortiz … became a homeowner. By last March, the home was in foreclosure. The loan originator and mortgage company had gone out of business. And Ortiz was headed to court. 

Blindly led down the primrose path by her naiveté and her “burning desire” to own a home in the U.S., Ortiz is utterly ruined. But she does not deserve a taxpayer bailout – she is the very person former presidential candidate Mike Huckabee (R-AR) must have had in mind when he told NPR in an interview last December: “[W]e don’t need is a government bailout. That is not the purpose of government, to prop people up from every poor decision they make. In fact, when you do that … whether it’s in the world of finance or the world of drug addiction … it creates an enabling codependency. It’s the last thing that really helps people.” 

But creating an enabling codependency on Big Government helps Dems get into office. Dems are always accusing Republicans of cynically manipulating workaday Americans to vote against their own financial interests. The shoe is on the other foot.

Note: The Stiletto writes about politics and other stuff at The Stiletto Blog, chosen an Official Honoree in the Political Blogs category by the judges of the 12th Annual Webby Awards along with CNN Political Ticker, Swampland (Time magazine) and The Caucus (The New York Times).

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