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Friday, October 3, 2008

Herseth, Flip Your Vote: Let's Flip Houses!

I still don't know fully what to make of the Seven Hundred Billion Dollar financial bailout. (Remember: $700 billion is a huge amount of money, enough to seven million houses just like mine... and there are only 124,000 chronically homeless people in the U.S.) My gut tells me we should sock it to the meatheads, borrowers and lenders alike, who caused this mess. But then I think back to Prof. Blanchard's sensible words on fires and fat, stupid brothers-in-law, and I feel inclined to put my anger aside and fix the problem now and the blame later.

And when Republican Joel Dykstra criticizes Democrat Tim Johnson for siding with constituents and not supporting a massive government intervention in the free market, well, I can hardly tell what planet I'm on any more.

But to today's vote: with the Senate's aye vote Wednesday, the bailout ball is now back in the House's court. Representative Herseth Sandlin voted no on Monday (along with Dennis Kucinich and Mike Pence, another mind-bending political convergence). Will she flip her vote to grease the economy and let her and her colleagues get back home to campaign (not that Herseth Sandlin has to work too hard, even if Chris Lien does slide his whole face into his campaign banner)?

If I were in her shoes, I think I could come up with a justification for turning my Nay on the bailout into an Aye. Let's speculate... literally. Let's speculate in the best investment the world has ever known: real estate.

O.K., I know, the housing market stinks, that's the problem. But as Donald Trump said on KELO last week, that's also the opportunity. The market wants cash, liquid assets, not boring old solid assets like houses. We, the American taxpayers, have cash... or at least a reasonable facsimile thereof in the form of an apparently infinite federal debt capacity. Fine. Let's buy. The banks will kiss our feet for it, and they'll get back to floating the loans we need to meet payrolls, buy cars and equipment.

Plus, we will be the proud owners of a whole bunch of houses, or at least mortgages. Think that's a worthless investment? Right now, maybe. We aren't going to flip those houses on the market in 2009. But we don't have to be like the bankers and brokers and constantly move our money around. We can sit on this investment for five, ten years. Straighten out Wall Street, ride out the current turbulence, get five million veterans and other Americans to work in President Obama's new "Green-collar" jobs, and let the real estate market do what all investments except for horse-and-buggy stocks do over the long term: grow.

The population is growing, and land isn't. Folks will always need places to live. Investment in real estate may not be a plus on the FY2008 balance sheet, but long-term, it will always pan out.

The banks don't want to delay their gratification, hold onto their mortgage investments, and enjoy the profits ten years from now? Fine. We'll take those profits, thank you, and pour them right into balancing the federal budget in 2018.

Is that economic analysis sound? I really have no idea. But it seems to make as much sense as anything else I've heard from Wall Street and the politicians over the past two weeks (two weeks, and no meltdown yet!).

Congresswoman Herseth Sandlin, your comments (and everyone else's!) are welcome. We look forward to your vote today....

Update 14:41 CDT: The Kucinich-Herseth Sandlin-Pence axis stayed strong, but enough others wavered: on a 263–171 vote, the House of Representatives approved the bailout, and President Bush has fixed his signature to the biggest single federal intervention in the economy ever. Hold onto your hats, kids: we're going into the real estate business!


  1. chuck ritter10/03/2008 9:18 AM

    "chronically homeless" that's a good one!

    Yeah, I've got this disease... I can't work! Oh, and I'm allergic to Freddie Mae.

  2. She voted no like I wanted. My reasoning - all the pork that was added to buy votes. Shameful. If this was such a good idea, it should have passed without the added $150 billion of pork.

  3. chuck ritter10/03/2008 2:56 PM

    The bill is pretty sad! When you think of the urgency and the economic disaster we were/are in. It all came down to a whole lot of Pork that nobody wanted! And BOTH sides are at fault!

  4. pennypincher10/04/2008 5:53 AM

    Both parties blame each other for the economic crisis. Supposed Obama 2 years ago was telling everyone that there was trouble, but no one listed. If Obama is such a great leader, then why didn't he get people to listed?? The same for Biden and Mc Cain. They both pointed out issues that they noticed, but no one listened and these are the people that say they can run our country? BOTH sides scare me.

  5. I'm as surprised that I agree with Trump as I was at the vast number of people I usually trust railing against the bailout, too bad the bill got loaded with 400 unnecessary pages of BS and virtually none of the culprits will pay for it at the polls.

  6. PennyP, I could get excited about a serious third-party challenge. If everyone who has said, "Both sides are to blame" were to go for Barr or Nader, we could have a serious upset. Maybe everybody who is mad as heck about what's happened with this financial bailout should organize a campaign for one or the other third-party candidates. But that groudnswell hasn't happened yet, and neither Barr or Nader (and I say this with sincere regret) has been able to rally that grassroots rebellion.

  7. Cory, your model looks great to me! Will the country be this idealistic for the next 10 years? I don't know. The smell of pork can make people do strange things.

  8. Stan, if this financial mess can't provoke a full-tilt third-party insurgency and realignment, then I don't know what will. If they want to be players, these cranky Libertarians around me need to get serious, organize a nationwide web campaign like Obama's awesome Internet outreach, and make it happen.


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