Forty Acres and a Mule

The Fed cut key interest rates by a full half a point, because needless to say we do not want to have an economy in which people must actually be able to afford the things that they purchase. The invisible hand reaches into the invisible wallet and gives the kids an advance on their allowance. Whoopee. By coincidence, I had on NPR just long enough this morning to hear a fellow named "John Hope Bryant, founder of Operation Hope," ask rhetorically why we wouldn't want people who can make a rent payment to own a home. In other words, if a poor or working class family can pay, say, $700 a month in rent, why then should they not be eligible for a commensurate mortgage payment on a high-interest, no money down loan. This seems to me to be a colossal failure to pay attention to anything that has occured in the world for the last fifteen years, and I wonder: Do people really think this way? I say this as a first-time homeowner myself. A friend and I were chatting about it recently, and he, now on his second house, said, "Isn't it amazing how a hundred dollars becomes a thousand? Isn't it amazing how you used to say, 'Eh, it's only twenty-five dollars,' and now you say, 'Eh, it's only twenty-five hundred'?" I too think that everyone should be able to own their own piece, and yet I cringe at this suggestion that home ownership is a sort of basic right of citizenship. If you cannot make a down payment of 20% and fix your interest rate, then you shouldn't own a home. If your credit is insufficient to cover a catastrophic medical bill, a car wreck, a family emergency, etc., necessitating a missed mortgage payment (or more) in order to cover such unfortunate but inevitable expenses, then you shouldn't own a home. If your income is inadequate to cover you for a month or two in the event of a lost job, then you shouldn't own a home. It is not because you're a bad person, because you're inferior, or because you don't deserve it. It's because you can't afford it.

Hoary invocations of the American dream are no hedge against creditors. The truth is that people like John Hope Bryant, founder of Operation Hope, depend on the innumerate underclass for their own livelihoods. Lenders see that the Fed will bail them out in a jam, and they see that as an incentive to offer more loans to high-risk borrowers precisely because the poor bastards don't know they're being sold up the river. Bryant and the rest of the credit-counseling industry are the straight men in the con. It's a savage burn they're running, and folks well-protected by tenant laws find themselves boondoggled into a huge expenditure that they can ill afford.