Washington needs "A Whole New Mind"

By
Real Estate Agent

Recently, Daniel Pink, author of "A Whole New Mind," posted an article on his blog regarding his interview with money manager Jeremy Grantham, who said: "I ask myself, ‘Why is it that several dozen people saw this crisis coming for years?' I described it as being like watching a train wreck in very slow motion. It seemed so inevitable and so merciless, and yet the bosses of Merrill Lynch and Citi and even [U.S. Treasury Secretary] Hank Paulson and [Fed Chairman Ben] Bernanke - none of them seemed to see it coming."

Did he hit the nail on the head! Many of us in real estate saw the train coming several years ago when lenders were strong-arming appraisers to justify mortgages of 125% of a home's true value and approving buyers with credit scores in the 500's. The train was coming and those of us on the tracks could see it but nobody in Washington could. Today, they are attempting to remedy the crisis by manipulating interest rates just like they've done for decades. They do not recognize the true source of the problem and continue to treat the symptoms instead of the disease. While (unfortunately) the 700 billion bailout appears to be a necessary evil it addresses only part of the problem - those homes which are in the foreclosure process now. It does not stop the flow of foreclosures coming down the river toward the brink of foreclosure. In order to reduce the number of near-future foreclosures, we need to reduce the interest rates on existing loans in order to provide homeowners a better chance to keep their homes. While this approach has been recommended by people like Dave Ramsey, nobody in Washington seems to be paying attention. It is a creative, new approach, but I fear it lacks the support of our legislators because the banks who made bad loans would be held accountable in real money and our lawmakers recieve too much funding from them to ever rock the boat.

Instead of looking at the credit crisis in its entirety and developing a comprehensive remedy to its foundational causes, Washington continues to add one Band-Aid after another.

Imagine a man who is a terrible car accident and is bleeding from the head, chest and stomach.  The doctors say, "Well, let's stop the bleeding from the stomach and see what happens.  Maybe we won't need to do anything else; that should be enough.  We'll give it a couple of weeks and if he doesn't improve, we'll try to stop the bleeding from the chest.  Maybe we won't have to do anything more than that.  Give it a couple of weeks and if he doesn't improve .. well, you get the idea.

Daniel Pink's book should be a "must-read" for all Washington "Big Brains."  They really need to learn new solutions to today's economic challenges.

 

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Ambassador
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Jim Crawford
Jim Crawford Atlanta Realtor - Atlanta Real Estate
RE/MAX Paramount Properties

In the late 1800's around the time of the "Robber Barron's" people became fed up with self serving politicians.  There was a movement that basically embodied the theme "Get the rascals out!"  We are at the same point.  Most of the incumbents believe it is their country.  It isn''t.  It is a republic where they serve those that elected them.  They need their butts kicked out.  We need fresh blood, and real action.

We need to address issues like NAFTA, illegal immigration, bank reform, term limits, election reform, outlaw lobbying, and yes prosecution, indictments, and imprisonment of all wrong doers!

October 17, 2008 04:58 PM
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Don Phelan

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