Fox News reported that some homeowners are deliberately missing their monthly mortgages payments even though they can easily afford to make those payments. Evidently, they’re hoping for some kind of bailout or readjustment of the interest rate and/or the principal balance. Where did they get that idea? From the banks, insurers and investment houses that have been bailed out by the government for making stupid mistakes. From auto company executives who are asking that the rules of capitalism and a free market system be broken with a government bailout. Even the Gaffmeister himself, VP-Elect Joe Biden, blathered about resetting the outstanding principal balance on home mortgages so that payments totaled no more than 31% of household income. 31% is a rather precise figure. Not 30%, not 32%, but 31%. From what dark recess did he pull that number? How could that possibly apply to the myriad of financial conditions that describe each and every household in the US? This is how central planning works - it indiscriminately applies the stupidest principle across the board.

Now, re-setting what people owe on their homes sounds like a noble gesture. Except that it encourages people to go into delinquency, knowing that the socialists in Washington will come riding to the rescue. Also, what does this do to the homeowners who are living within their means, sacrificing on luxuries so that they can meet their financial obligations? It punishes them. If mortgage balances are allowed to re-set, banks will incur huge losses, much larger than the calamity we’re now experiencing. Banks will tighten credit and raise interest rates to cover their losses. Further, the value of all real estate plunges even lower. The combination will hurt homeowners who’ve been making their mortgage payments and paying their property taxes on time.

The clowns in Washington are trying to help. They don’t know how, so they’re playing with the knobs and levers of government, screwing up the economy further and delaying a rebound. Can they please take a rest?

There are loads of people to blame for the housing collapse, mortgage mess, the credit lockup, stock market losses and structural damage to the world economy. Although they’re related, these are individual catastrophes, each with a free-standing potential to destroy America’s ‘free market’ system. There’s no getting away from the fact that this global problem started right here and that the wealth of other nations and other peoples will be dissipated along with our own. And, they’re not particularly happy about. They will, therefore, exact a price for the stupidity and short-sightedness of a very few Americans which in turn will be borne by all Americans.

But, who are ‘they’? Who shoved their fellow citizens into a morass that may take us decades to backfill? According to Rep. Barney Frank (D-MA), he wasn’t in any way responsible. Neither was Sen. Chris Dodd (D-CT), nor Franklin Raines, or Tim Johnson. But then neither was Chris Cox, Harvey Pitt, Alan Greenspan, Ben Bernancke, John Thain, etc. The list goes on and on. The blame rests with Democrats. The blame rests with Republicans. The speculators, Wall Street fat cats, bankers, hedge fund managers, ratings agencies and who knows is to blame. Unscrupulous mortgage brokers, various financial intermediaries, homeowners, homebuilders and a cast of thousands are also implicated. Like the stock market speculation of the tech bubble, the real estate and credit market speculation was a bubble destined to burst. But no one could have imagined the far-reaching, devastating consequences. But in hindsight, there could have been no other outcome.

Over the years, little pieces of legislation and regulation were added, deleted or amended. A small change in real estate lending policies here, a capitalization requirement there - it seemed innocuous, something that the economy could easily afford. But there were hundreds of incremental changes in a hundred different areas of finance, banking and investment that no one could track, all building on one another. The resulting mess is equally complex. Nevertheless, there is one more shoe to drop — the response to this American-made calamity by the rest of the world. How harsh and painful it will be is anybody’s guess.