Nalezing

HOUSING PRICES ARE the number one topic of discussion on NPR. At least, I can't turn on Morning Edition without hearing about them. There's so much hair-clutching about what to do about housing prices. They're falling! Dear God, they're FALLING!!! AHHHHHH!!!!

It infuriates me that all Congressional and presidential bills proposed on the subject are aimed at:

1) limiting foreclosures

2) forgiving some percentage of outstanding debt

I don't blame the president. He was born without crucial sections of grey matter responsible for comprehending complex economic data (or any data, for that matter). One looks not to the asylum to solve one's fiscal crises. But Ben Bernanke? He knows better! I know he knows better! Alan Greenspan taught him!

Taking it one point at a time:

1) Houses are being foreclosed upon because lenders are facing a monthly bill that is far higher than what they initially anticipated paying. The blame for this rests squarely on the shoulders of an unregulated lending industry-gone-wild, which, as I'm certain you know, offered ridiculously low temporary rates on mortgage loans which increased hugely after one to five years of low rates.

Persons who embraced these loans have my sympathy. They were tricked in the sly way that only grossly unregulated banking can oik out. They didn't deserve that treatment... but they didn't deserve those loans, either.

People who were not home owners before the housing bubble grew were not home owners for a reason: they couldn't afford it. But banks effectively increased the number of consumers who demanded houses by lowering their standards for lending. Without a commensurate increase in supply- it takes a while to build a house, after all- housing prices increased dramatically. None of this is news, and everyone knows it.

Short answer: Demand for housing was artifically inflated, which raised prices.

2)Should the banks be allowed/required by the extraordinarily foolish Republican administration to forgive any percentage of home debt, housing prices will stay artifically inflated forever- fantastic for rich honkies!! Even as a rich honky myself, I find this morally reprehensible. You took advantage of those scam-ola loans? You bought a house you couldn't afford? Fantastic! Let's keep you in the house you're in, thereby preventing anyone who could truly afford it at fair market prices from owning a home. Fantastico.

Short Answer: Forgiving debt will keep artificially high housing prices high forever (or until a Democrat president, whichever comes first).

All of this assumes one very important point: people who own houses are infinitely more important than people who do not own houses.

Very George W., no?

And lest you think my ire comes from a place deep within dominated by jealousy for home owners, I myself am currently the proud owner of an utterly unsaleable four-bedroom. My former husband lives there in glorious, solitary splendor, dreaming, no doubt, of the day he will be free of the white elephant and move into a nice studio apartment downtown. No one cares to give us $200 grand in exchange for this delightful home, and I certainly can't blame them. That amount is ridiculous. Housing prices are far too high and must be allowed to self-correct. Two college graduates make about $40,000 a year each. That's $80,000 a year- gross, not net, mind- and the chances of buying a modest home like my own are quite simply impossible. What about having kids? What about building equity? Aren't Republicans supposed to be all for the heterosexual married couple who plan to produce some young 'uns and build up their savings? What the hell is their demographic if not that?

Let housing prices fall! Let 'em drop like stones! A condo in my apartment building- one bedroom and just a condo, for heaven's sake!- is a very optimistic $120,000. Asking more than $70,000 for such a thing is criminal.

And if you're wondering how I managed the neat trick of buying my own home, W. and I have one thing in common: my daddy got it for me.