Would a real fiscal conservative have bought that house?

While I have a strict policy of not dancing on the graves of people who are in trouble through no fault of their own, Sen. Mike Lee, let’s say it right up front, should have known better.

I mean, who the H buys a top-value house while the housing boom is crumbling all over? Or even while it is still going on?

Seriously, this article (click) discusses his being forced to short sell (read: stick it to the bank) his home which, the article says, he bought “at the height of the housing boom” in January of 2008.

Actually, early 2008 was not the height. The bubble was already deflating. Anyone who read the news knew that. Even Fox news. I have a brother who sold a house around then and he got out by the skin of his teeth.

But even if it were the height, so what?

Sen. Lee projects himself as a fiscal conservative — the nation should eschew debt! The nation has to balance its books!

But he blew more than a million dollars he didn’t have on a fancy house which, by any measure, was way way way overvalued. Housing prices everyone in the nation were — and all the real fiscal conservatives knew that and stayed out.

That’s why they didn’t get bit, and the people who bought under the idea that houses never ever lost value did. You want to find a real fiscal conservative? Go knock on the door of one of those homes in Ogden’s middle income neighborhood where an older retired person lives who bought the place 40 years ago, paid it off, and raised five kids in two bedrooms.

The place is probably still paid off. Real fiscal conservatives stay out of debt, and when they do have debts they pay them.

The housing bubble was so obvious even I saw it coming, and it is one of those times I really wish I had the wherewithall to bet against the housing market because I could have made a killing.

But people like Lee claim to be smart. So why didn’t he see that housing values that had tripled, while national income levels had stayed the same, was trouble?

I wouldn’t mind it nearly so much except this is the guy who is wandering all over Washington DC now, telling us that the way to fiscal sanity is to cut taxes, increase spending on the military and do away with federal programs that help the poor. Whining to the bank to help him out of his own bad fiscal management does not lend confidence.

Complete irony: a short sale essentially socializes his debt/loss — it sticks it to the bank, which of course holds your and my money, which is federally insured, and it is that federally insured money it loaned to Sen. Lee, so the ultimate guarantor of his loss is the taxpayer.

And now he hangs around DC condemning government and preaching fiscal responsibility to the rest of us.

Must be nice.

 

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14 Responses to Would a real fiscal conservative have bought that house?

  1. Doug Gibson says:

    There are loads of economic rules and theories that existed too long. The changes in finances, debt, customs, etc., rendered them obsolete. But they survived because they justified the sellers’ and buyers’ wishes. One was the idea that a home was an investment that would always grow in value. Lee succumbed to the illusion.

    • Decider says:

      “Succumbed” is an interesting euphemism to describe a high-powered, high paid attorney for Energy Solutions, who ran for office on his Constitutional and Business SAVY.

      Doug whines that the rules and theories had existed for too long, and changes in finances customs and debt had rendered them obsolete — well, that’s called Mitt Romney’s CAPITALISTIC MARKETPLACE Doug; where Conservatives think that the only rule that governs making money is that there are NO RULES! — just winners (not whiners) and losers.

      Greedy speculation and the entitlement of arrogance were the illusions to which Mike Kee succumbed.

    • willbike says:

      Yes Doug, we know. It’s just an honest mistake as long as its made by a republican.

    • Tim Hansen says:

      If Sen. Lee can’t take care of his own personal finances than why should the people trust him with National Fiscal Policy? He basically stole $400,000 from the lending institution. I’m betting that he could have tapped into his retirement funds to continue his payments, based on the amount of money that he was previously making as a lawyer. Unless, of course, he was living above his means all along. Foolishness, Greed and Hypocrisy. This is someone that has posited himself as a National leader. Don’t let him off so easy.

  2. Bob Becker says:

    Worth pointing out, I think, that while Charlie’s point about Lee having no grounds to start pontificating about The Lessons of Fiscal Conservatism, given his own very recent experience, it wasn’t just Lee who made a foolish investment. It was also the bank that, foolishly, loaned him that huge pot of money to buy an over-valued property in the teeth of the housing bubble deflating. And the bank ate at good part of what was lost. The, as Charlie notes, Federally insured bank. Just noting it wasn’t all Lee’s doing. He had help from the highest levels of American banking.

    • Charles Trentelman says:

      I am of the opinion that Alan Greenspan needs to be brought up on charges of criminal irresponsibility in the whole mess, but, seriously folks, who couldn’t see this coming? Mass delusion barely begins to explain it, although that is the best I’ve heard.

      Although, banks giving loans to dead people, and banks handing out loans based on “no income, no verification” standards is not explained by delusion. Again, criminal action.

      All one really needed — and I remember writing to another financial columnist at the Times (not the winner who wrote a book) at the time pointing it out — was a rudimentary knowledge of history, most specifically the history of the land boom/bust in Florida in 1925, which was a carbon copy of what happened here in 2002-2008.
      I told him, especially, to read “Only Yesterday” by Frederick Lewis Allen. Chapter 11, “Home Sweet Florida” (http://xroads.virginia.edu/~Hyper/Allen/ch11.html) tells it better than anything else.

      The guy wrote back and said “Interesting, I should read up on that.” I wonder if he did?

      • Myth Buster says:

        Nice article and comment Charlie. The banks created the mess knowing the outcome with variable rates, 125% loan to value, little to no money down and loose qualifying rules. Greenspan does need to answer for this as does Bernanke; printing money solves nothing. Today the FED pays banks not to lend. “Permit me to control a nation’s money supply and I care not who makes its laws” Mayer Rothschild

  3. Robert Fitzgerald Curt Leshem says:

    Silly Lee’s home was in Alpine, not Park City. Otherwise, spot on column.

  4. Mikeasell says:

    The mob wanted new, inexperienced, tough talking, tea partyn’, unwilling to compromise, ignorant leaders in office. Wish granted.

    He is just a strong defender of fiscal conservatism as he is a constitutional expert and defender (the claims that brought him to office)…oh yeah the first thing he was going to do was change the constitution so American born citizens would no be Americans because their parents were not on a visa, and worse, were Mexican. Change the constitution, way to defend it, moron.

    Fiscal conservative? way to overextend yourself and then pass on the fiscal responsibility to others, moron.

    Chaffetz is no different. Ignorant, racist, populist and an embarrassment to the state. I love that people are defending this because he is tea party. Well the economy got to one of our defenders, just like everyone else- no, we are not all passing the buck to the bank and then running for public office as a fiscal conservative.

    Saying that it was not his fault is the epitome of irresponsibility. He picked the house, agreed to the loan, signed the papers, he is for legal purposes an adult, and he chose to take a pay-cut and chose to file for a short sale of his mansion, a victim indeed. You borrowed the money, pay it back. I am amazed how hard republicans are about people paying their own way and being personally accountable, unless those people are republicans.

  5. Decider says:

    The bank who “made the loan” had most probably SOLD the loan for speculation and ‘packaging’ before ol’ Mike had even left the Closing premises. The bank stood to make even more money by re-selling “risky” mortgages than they made making the loan in the first place.

  6. laytonian says:

    Shoulda listened to George Carlin, Doug.

    George famously said “A box is just a place to keep your stuff in.”

    If more people listened to George, we’d not be in the mess we’re in now.

  7. willbike says:

    Republicans are not fiscal conservatives, there is no evidence to support that they are. Democrats and republicans spend like crazy and all we can do is hope that they stop soon, then accept the consequences when the cuts effect our personal lives.

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