Friday, September 18, 2009

Theft, Coercion, Rights

I posted a reply on a forum responding to someone saying that removing FHA guarantees on mortgages or having government involvement in the housing industry would result in unintended consequences on the housing industry.

"You go to 10% down and the mortgage and housing industry collapses. If that is what you wish for then advocate 10 to 20 percent down. I can't put it any more simple than that. I'm not saying that is wrong to tear down those industries but there are always unintended consequences."

My response: "Isn't the current mortgage and housing industry an unintended consequence of the government being involved in the first place (by subsidizing mortgages)? It didn't do all that much good except transfer more wealth to bankers and government workers."

Other guy: "Sigma, is it better to crash the market quickly or do it slowly over a longer period? Doesn't a longer deflationary cycle create more losses? What it really does is allow losses to be distributed to consumers that were not part of the foreclosure crisis."

Here's my response (I posted here because political type of stuff on this forum is frowned upon, which is bunk since everything is somehow tied to politics):

If it means that people that made bad decisions are punished for their decisions, make it quick so the people that made good decisions can benefit. FHA, VA, Fannie, et all just need to go away. Builders, realtors, and bankers over the past 20 years or so have basically lived on the taxpayer teet through all of these housing subsidies. Look, I'm in banking, but I would sacrifice my job for less lying and deceit and to see fraudsters put in jail. If the grift continues, it will be incentivized even more, and cause bigger problems. If you look at what the government should do (protect your rights) versus what it is doing (redistributing what you've earned in a politically feasible manner), I think it's pretty clear to say this is theft and coercion on the grandest scale (evil). Every day I see builders and bankers who are the recipients of the Tax Credit, 3.5% federally funded downpayments, financing, FDIC insurance. These incentives are transferred almost directly from the Treasury to the builder and banker. The only public policy goal needs to be the protection of rights.

I have always seen things as good or evil with no gray area. If something or someone takes from you that which is not earned, it is theft. In my mind, theft is evil. Therefore, anything that violates your rights to your property is evil. Government is inherently evil; it has no face, no accountability, and it can act with the use of force. The solutions to all the mess that we face lies in individuals acting to improve or not improve their life in their own self interest without impinging on others' rights to pursue their self interest. Theft by the government taking your unalienable right to the fruits of your labor and the redistribution thereof does not make the individual wealthy, it only makes the recipients of that redistribution wealthy in an unjust or evil manner. To have a moral and just society, the individual needs to be protected instead of groups of people that have developed political connections to legislate jobs and professions into and out of existence. Until then, the poison of theft and corruption will continue to invade the good that is a thinking individual's self interest.

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