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View Diary: The Restoration of the Rentiers (21 comments)

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  •  I've been thinking about this for some time (16+ / 0-)

    Over the past weekend there was a diary about mortgages. One of comments asked the very simple question: Why would the Right be against 30-year fixed-rate mortgages. I gave a partial explanation based on the likely beneficiaries of adjustable rate mortgages (mainly investors; less so the average home purchaser except under certain conditions). The piece I left out was how anyone would benefit from massive defaults and foreclosures.

    By resurrecting the concept of the rentier you've pretty much given the answer to that. When I was first learning how to be a real estate appraiser back in the 1970's, it was assumed as a matter of faith that banks really do NOT want to own properties, so it was a matter of self-interest not to issue a loan when there was a likelihood they'd end up owning the property. This presumes the idea that the ownership of assets should be widely distributed, resulting in a robust middle class.

    If on the other hand you would prefer to return to the middle ages, in which the ownership of most forms of property was limited to the privileged classes, then massive defaults, and the accompanying massive REO portfolio, would be a feature rather than a bug.

    •  Yes, I think the banksters understand... (7+ / 0-)

      that mortgages are just another mechanism for looting what liitle assets the middle class has left.

      But, you give me too much credit for "resurrecting" rentier. I am merely quoting Michael Hudson, who has been beating this drum for at least fifteen years. In fact, I fully expect to hear about my quoting Hudson to point out where Obama stands on this.

      But, thanks for reading and commenting.

      •  Well you mentioned it here (6+ / 0-)

        so you get credit anyway. :)

        I've been involved with real estate since 1977 always as an appraiser (and soon, I hope, to be retired). Every "innovation" in financing I've seen since I began my career seemed like the worst idea ever, until the next one came along.

        •  M. Hudson has a lot to say about R.E. (8+ / 0-)

          Namely that most money lent by banks is to buy property (i.e., real estate) that is already in existence. That the constant asset-inflation caused by easy credit for mortgages left anyone un-invested in R.E. behind - until the bust in 2008.

          But, of course, the FIRE sector has been generously bailed out by the US gov; and are now buying up piles of foreclosed properties on the cheap - actually outbidding real bargain hunters by substantial amounts of money - in order to restart the asset inflation cycle and fasten their rentier grip on the economy even tighter.

          They are in a no lose situation. They get to create credit to buy anything they want. When their over-easy credit blows up the market, the government steps in and hands them back their money.

          Begin rant

          Eric Holder is a worthless, Wall St fellating sellout. Someone like me, who knows nothing about finance or lawyering, could have prosecuted these crooks. He and Geithner and Obama let them all skate.

          When this country goes under, I am going to name a sewer system for Eric Holder because he is a man who kept the shit out of sight.

          End rant

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