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"Daddy, Make Him Stop!" Why Uncle Sam Isn't the Answer in a Free Market

Where is uncle Sam? Why isn't he watching this [short sales] and have control on it? Why allow the lending institution to do whatever they feel like giving crazy mortgages or short sales why is it up to them?

This question was posted by a young woman (a real estate agent) bemoaning the effect of short sales on property values in her neck of the woods. Since liberty is a lot higher on my flagpole than property values, I'd like to answer her question.

Uncle Sam doesn't have control because we don't want him to be our Daddy. He's not any smarter than Uncle Kim in North Korea, Uncle Fred in Hoboken, or your favorite uncle.

Uncles with too much power are called kings and dictators. Uncle Sam doesn't have control because the United States is a democratic republic, unlike China, North Korea, Iran, or Russia.

You and I have a thing called liberty.
I'm at liberty to...

make my own financial decisions
buy property
sell property
live where I choose
borrow money
lend money
save money
go into debt
choose to win or lose big, depending on my tolerance for risk

I'm at liberty to do all these things precisely because Uncle Sam doesn't have the power to tell me that I can't. I don't ever want to concede that power to Uncle Sam in the hopes that he will protect me from the consequences of my bad decisions.

If you and I make good financial decisions, we reap and keep the rewards. If we make bad decisions, we'll learn from them. Fail Forward Fast is my motto. Like a child burning a finger on a hot stove, it's a lesson that cannot be taught. It can only be learned.

And that's the real estate opinion of this Tucson, Arizona mortgage lender,

Mike in Tucson

Posted by Mike Jones on 02/15/2008 12:55 PM

Comments (80)

got features, short sale, real estate opinion, real estate, tucson, arizona, mortgage, mortgage lender, mike in tucson, uncle sam

Originally posted at: Tucson By Choice!: "Daddy, Make Him Stop!" Why Uncle Sam Isn't the Answer in a Free Market

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80 Comments on "Daddy, Make Him Stop!" Why Uncle Sam Isn't the Answer in a Free Market

JAN

2008

Solid points here Mike. Sometimes we need to remember who is in charge.. Each of us has responsibility for our actions. as hard as that is to admit, ohmygosh, I did that? Yep.

I agree with you. It is about personal responsibility. I'd like to add that the subprime & predatory lending guidelines that got us here are a result of unregulated mortgage banking & other lenders. In other words, federally regulated banking concerns largely did not engage in this risky behavior. Of course, since the US is the largest purchaser of loans through its FANNIE MAe & FHLMC concerns, the government ended up with many billions of these troubled loans.

Dalia,

Uncle Sam burn his fingers once in awhile too.

Gail,

Thanks for being the first to comment!

Mike in Tucson

Mike,

We seem to fear freedom, like a 6 year old fearing removal of the safety wheels on the new bicycle.

Good defense of liberty!

The problem is that if you make the candy too easy to steal some people will be tempted too much to resist. I think there had to be some rules, but the problem was all the fake stuff that was happening. I personally advised many people to wait, but the builders and the bad lenders enticed them anyway and now I am selling their homes on the foreclosure markets. Money is like a drug, once you get a taste you need more. Take away the fake mortgages and fake downpayments and this mess is only half as big. Even Daddy had rules!

So true, Mike, thanks for sharing. The gov't is not the answer, self-goverment is.

Missy,

Thanks for commenting. Amen!

Dennis,

I wrote a post about your argument. The term is moral hazard. The solution is self-control.

Mike,

I like your analogy. Thanks for commenting.

Mike in Tucson

Mike, Good Post! I already feel that Uncle Sam has too much control on our lives. I firmly believe that less government is good for all of us who fully engage in the free enterprise system. 8-}

We always want someone to protect us but not control us. We have to learn we have to take responsibility for our decisions and not rely UNCLE to protect us. Thanks for your post

Uncle may not have the power to keep you from doing those things, but he sure can create the environment where you will choose one way or the other.

Mike, Another great post! What is not to agree with? I really liked how you laid it out for everyone

Mike, this is ALL we need! No big government telling us what to do. We let them get away with too much as it is. Where is our voice anymore!

You're correct...we have the FREEDOM to choose our course...be responsible or not. At least it's OUR choice!

Mike--So right and to the point...There are no easy answers to the problem and if the government steps in too "fix" things, they will no doubt get worse. Even a bad burn takes time to heal!

Mike, this one makes me want to stand and salute! :-) Right on the money, again..

btw.. I feel sorry for anyone that let's our uncle "create the environment where you will choose one way or the other." - I prefer to make my own choices, thank you..

Mike- Very good points and point blank. I like my liberty, whether it is success of failure. Just keep uncle sam away! lol He does enough!

Mike, there have been some times when I did dumb things, and if a daddy or uncle had been around to bail me out, I wouldn't have figured out how to fix the problem or how to avoid it in the future. While I have some empathy for the families affected by the mortgage crisis, I agree that a government bailout is not the answer. It's also not the answer for the lenders who screwed up and could be the real beneficiaries. Let them figure out how to deal with their own borrowers. With profit and loss at stake, they might even figure it out.

Life, liberty and the PERSUIT of happiness. The Founding Fathers knew that the Government isn't capable of satisying our appetite for happiness...and shouldn't...I don't want them trying.

Amanda,

More than one of the founding fathers worried in print about the wisdom of letting the masses vote themselves a chunk of the treasury.

Patricia,

Thanks for a thoughtful comment. It's going to be interesting seeing how all this shakes out.

Marey,

Amen to that!

Nick,

Go right ahead! LOL

Teri,

We'll learn the lesson until the next generation comes up to bat...

Linda,

Thanks for stopping by to comment. It's good to see you.

Matt,

Ditto, my friend.

Kathie,

Welcome to Active Rain! I just had to click your name to see if it was really you, or another person with the same name. Post a blog, and we'll all come comment!

Terry,

True! Less is best.

Michael,

We live in a great country!

Mike in Tucson

Great thought .. Mike.. We made bad decisions and then we have to ask the government to clean it up for us. I wonder how this is going to affect my daughter's habit of making choices.... We need to take responsibility for our actions and move on..

Since we are getting a check... I guess we can go SHOPPING and spend, SPEND,, but we need to SAVE< SAVE..

It is interesting that we want the government involved when we're in trouble, but we want them out of our lives when we're doing things to get us in trouble. Some kids never grow up!!

Mike, No glib remark possible. Your defense of Liberty might be schmaltzy but I like it. I also like your Uncle Sam poster.

Bill Roberts

Mike.. There was an article in the LA Times yesterday about how The US told markets in the 90's that they had to tough it out and take responsibility for problems.... and now we are doing everything but take responsibility for our problems.. The article noted that if this little package didn't work then we would have no other course but to tough it out and let the chips fall where they may..

Mike in Tucson- Great points. Keep Uncle Sammy at bay. If he wants to offer programs, we are at Liberty to choose.

oh yes capitalistic free market economies and the freedom to choose.

while not perfect it's worked quite well here.

take a step back and remember why our forefathers came here before asking uncle sam to do too much.

You said it Mike! You are spot on.

Donna,

Thanks for commenting.

Jay,

Nothing's perfect, but this is the model the rest of the world envies.

Mark,

None of the govie loans (VA, FHA) seem to have contributed to the problem. It was a few of the private enterprise programs that tanked. Bailing out the lenders will only encourage another round of this.

Kaye,

I'd like to see that article if you can find it!

Bill,

Thanks for avoiding a glib remark. LOL It's good to see you. Have a glass of schmaltz!

Robin,

That's funny. Good remark!

Donna,

Japan "saved, saved, saved" without spending, and that's just as much a problem as not saving at all. We need a conservative approach to credit spending.

Mike in Tucson

Mike - I agree with you 100%. The only problem being that we're in the minority. Folks that gambled and won were ecstatic... those that rolled the same dice and lost are now whining about a bailout. The folks who 'fudged' their applications to get into a house they couldn't afford don't deserve to be bailed out just like the "A" paper folks who used their homes as ATM machines. The piper has to be paid at some point... and it looks like he's here to collect.

I definitely am against too mcuh govt. involvement so I agree in that regard.

JAN

2008

Gayle,

Thanks for stopping by to comment.

Jesse & Kathy,

We're all going to get through this one way or the other.

Mike in Tucson

Mike, I love it. Whenever something happens we don't like, we want the government to step in. Whatever happened to self discipline and taking care of ourselves? We do not, as you said, want to call on the government for everything! Otherwise, It is like having a king, you're right. Good post.

JAN

2008

Mike- The lack of responsibility is astounding today, the blame game and entitlement syndrome has taken hold of our country and we must take a stand for our liberty. As those people cry louder and get the Uncle Sam to bail them out they will never learn to make it on their own. We must protect our free market enterprise that is being attacked. Socialism does not work, let these who want that move to the countries that offer socialism and see how prosperous they become there.

You wrote a great post. It is too bad you are preaching to the choir on this post here because I do not see any comments bashing our love of liberty. Katerina

Mike - Good post. I am happy though to see the government stepping in to try to turn this mess around.

Mike, At the height of the market, many want-to-be investors saw the flipping practice and wanted to jump in the game. Unfortunately, bad timing, flat out bad and greedy real estate agents, greedy and inexperience loan officers, and some other bad parties join in effort all make the sales went through. The price went down significantly, almost half in some market! Uncle Sam certainly did not want people to lose money as he can't collect his interest! Just bad timing, and bad decisions.

JAN

2008

Mike, why in the world was this post not featured?. I have certainly done my share of arguing that Uncle Sam should get involved and help in someway. In reality it's easy to say and hard to do without violating liberties. Thanks for the thought provoking post!

JAN

2008

Kate,

I truly don't know. You would think the AR Gods would have had mercy. LOL

Michelle,

Uncle Sam doesn't collect a dime of interest on a mortgage. But he does like to gobble down those taxes when we do well. And that's okay so long as we keep him skinny.

Tom,

Time will tell whether the government did any good.

Katerina,

Your comment underlines why I'm a subscriber to your blog. You're full of common sense, and you write well. Come back any time!

Teri,

I'm a subscriber to your blog as well. What a great group of writers we have here in the Rain.

Mike in Tucson

Great post Mike. I love it.

I'm concerned with the fragility of what is left of our free market now.

Our market economy is fast becoming a managed economy and the managers are up for bid. Oooohhhhh, that is a "rant and rave" post for today.

All I can say is AMEN. I agree 100% with what you say here.

Mike, So very true! Government intervention is surely not the answer nor should it be.

Mike.. this is a link to the article..

http://pqasb.pqarchiver.com/latimes/access/1417372501.html?dids=1417372501:1417372501&FMT=ABS&FMTS=ABS:FT&type=current&date=Jan+24%2C+2008&author=Peter+G.+Gosselin&pub=Los+Angeles+Times&edition=&startpage=A.1&desc=NEWS+ANALYSIS%3B+Tough+remedies+stay+on+shelf+amid+refinancing+fever%3B+If+efforts+to+bolster+the+economy+fail%2C+the+U.S.+may+have+do+what+it+preached+to+other+nations%3A+Wait+it+out.

JAN

2008

Kaye,

That's one ugly link! LOL Thanks for bringing it to the conversation.

Marc,

I agree. I hope you got what you wanted in yesterday's Florida primary.

Don,

Thanks for commenting!

Lenn,

I'll be over to see if you followed up on the rant and rave. LOL

Mike in Tucson

Mike, Great post. We have to many people thinking it's a free ride. Hard work, saving, budgeting, cutting costs, eating lots of hamburger, hotdogs and mac and chez is the way to get what you want, it's also the way I remember buying our first home.

JAN

2008

Mike.. LOL.. I know but it was to an archive and I was afraid to try and shorten...

Kaye,

I can show you how to tie that long link to one short word or even a photo. Shoot me an email at themiraclemike@yahoo.com if you like. Thanks for coming back and being a good sport.

Mike B,

There's no free ride, is there? Thanks for commenting.

Mike in Tucson

FEB

2008

Mike,

I was crusing Lenn's page and came accross this, anyhow, this is one of the better posts I have seen in awhile. As much as "We The People" would like to see our government fixed the bad problems in our lives, it can come at a big cost to our personal freedoms. Great Post, A real eye opener for me.

FEB

2008

You "hit the nail on the head". Every single day I hear about how the government needs to take care of us; this is an unfortunate mindset.

FEB

2008

Great post I will be passing this along if you dont mind. I also am going to sucribe to your blog!

Mike, thanks for having the guts to say what needs to be said and being a true believer in liberty. I quoted it somewhere else, but think that the following recent quote from Lawrence Kudlow is particularly relevant:

"Look fellas, the command-and-control, state-run economics experiment was tried. It was called the Soviet Union. If you hadn't noticed, it was a miserable failure."

Mike,

I couldn't agree with you more. Not unlike many other people, I have been saying the same thing for years. And our voice is not the minority. It is simply portrayed that way in the media by the lack of any semblance of balance.

Amen! If we keep giving Uncle Sam control over this and over that, we will eventually dig ourselves a hole in which we will be left with no control at all.

Great post Mike. The free-enterprise system may not be perfect, but it is way better than heavy involvement by the government.

Great post Mike, I'll take liberty over almost anything else Uncle Sam could provide for me.

Great post Mike, this one is still on the front page for days!

regards

- http://www.gregorygarver.com/

Mike, this is a great post.

Too many people don't understand the freedoms that we have and what it will be like if we lose them

Spoken like a true Arizonan (I'm proud to have lived there because of this post)

Amen Brother - Preach it! With liberty comes responsibility. We must be accountable for our own actions.

Scariest phrase in the history of man: "We're from the government and we're here to help."

Good post my friend. I agree 100% and believe it is very important to keep the market fluid and let it settle itself. The tide comes in and the tide goes out and it will come back in again.

Mike, Truer words never spoken. We need to assume responsibility for our personal success as well as our failures. The financiers are exercirsing their right to recoup bad loans within their own set of policys that they adhere to, regardless of government regulation, which can't mandate profit or loss. Couldn't agree with you more.

Mike, Excellent post and congrats on the feature!

Mike - I also enjoyed this post. Congrats on placing in the "Got Features" contest. We are feature neighbors now! Have a great weekend!

Thank you and AMEN!

Geez. Just too simple. And it doesn't increase the power of the people that want to increase their power. And it doesn't deflect blame from the people that want the blame deflected from them. Power and responsibility.

And there are just too many people that are willing to give away their power and their responsibility so that they don't have to make decisions or accept consequences.

FEB

2008

Mike in Tucson- When are people going to stop crying and take responsibility for their own actions.

Resident Mark,

It's good to see you again! Our culture may be shifting back toward responsibility. That would be good for the economy!

Lane,

I appreciate your comment! It's the "nanny state" syndrome.

Jason G,

You're welcome!

Jason C

Hey there, feature neighbor! I was surprised to see this pop to the top yesterday.

Judi,

To a blogger who was just featured herself: "Thanks for the encouragement!"

Tom,

The constitution doesn't promise the right to be stupid in lending policies and still be guaranteed a profit! LOL

Nanette,

I believe it's on its way back in as we comment.

Kent,

"We're from the government and we're here to help." No thanks!

Marlene,

Thanks for commenting! It's good to see you in the choir. LOL

Brian,

I didn't know you used to live in AZ! I need to browse your blog for a meme or two.

Chris,

That's why we have the vote. Be sure to use yours.

Greg,

Thanks for commenting. I need to come check out your blog.

Steve,

I'm with you!

Wayne,

We have a great system. It needs to get out of the Nanny business.

Kristal,

You're looking good back there in the alto section of the choir. Thanks for commenting!

Steven,

And our voice is not the minority... I do believe you're right!

Brian,

I love your Kudlow quote. Thanks for stopping by!

Nathan,

So that's the banging noise I hear! LOL Thanks for your comment.

Gary,

I love you, man!

Mike in Tucson

Excellent Post--I think Uncle Sam has gotten a bit too big!

Mike, I like the way you think. Probably because we think alike. Now, what about the freedoms we forfeit when we choose to live in a deed restricted community and suffer under the tyrannical reign of a home owner's association?

Great post Mike! Someone said: "The market will go up, and it will go down." That is true whether stock market or real estate market. After years of high property appreciation, reasonable minds would expect some market correction, as it probably can't keep going up forever. So I agree from a micro point of view.

But.... in a macro view... Uncle also needs to share in the blame on how we got here. Environmental acts that caused our manufacturing operations to close due to clean air and water acts. Uncle's rush to join into NAFTA, GATT, SEATO, and other alpahbet treaties that shifted our good paying jobs to other countries where there are no clean air or water or food safety acts. Government officials that profited personally through moving our American companies offshore through the Overseas Private Investment Corporation (OPIC). Instead of asking for govenment bandaids, we should be holding our representatives accountable.

Plenty of blame to go around, but we as a country need to reinvent ourselves and bring back good paying jobs so that Americans can begin once again raising our standard of living. Without those jobs, we continue to spiral down to the super wealthy elite and the lower class, with the rapidly disappearing middle class.

Sorry for such a long post, I got carried away. :)

You have to take responsibility for your actions and learn to make it on your own. Parents have to raise their children and let them go. If you are constantly making eveything better for them and taking care of their problems, what have they learned?

Hi Mike... Great post. It's up to us to make the final decision.

Hey Mike...What's with the subliminal responses?

Only thing I want to add is a minor correction...A representative republic. The prevention of mob / hysterical rule is a cornerstone to our system of governance. Long-forgotten, but still somewhere out there...;)

FEB

2008

Hi Mike, thanks for all the great reading and info you provide.

Cradle to grave, the democrat mantra. I do believe there is a "social safety net" that is needed, just not a trampoline that allows people to be perpetually the recipients of a government bailout.

FEB

2008

Love the poster Mike!

FEB

2008

placeholder to respond; I've been under the weather for a couple of days.

Mike in Tucson

We don't need more rules/laws, we don't need more government agencies to keep us on track, and we don't need Uncle Sam to make sure we don't make bad, or even stupid decisions. I love the points you make and could not agree more. Sometimes it just needs to be said.

Thanks for being a believer in freedom.

Dan Dillashaw, REALTOR

Virgil Adams Real Estate, Inc. Olympia, WA

www.SouthSoundLiving.com

Mike: This is a really good post. This is fresh in my mind as the President just signed the stimulus bill and it will affect mortgage limits. Most people just don't understand the implications of the bill on the simplest level (Every limit is not going up in the 700s), but what about the unforeseen consequences? Who will buy the loans on the secondary market? How will the loan limits affect mortgage rates?

It reminds me of the auto manufacturers giving away 0% loans. The time came where it wasn't economically sustainable, but they couldn't wean the consumers away from it.

Sometimes, when government steps in, the cure is worse than the disease. I wish folks would stop crying Uncle and let things stabilize. The more Uncle steps in, the longer the correction will last. Can you say '1990s Japan'?

FEB

2008

I agree. This is why we all love this country because of its freedoms even the bad freedoms. I love the freedoms so much I went to Desert Storm for them, so keep your chin up it will get better. Just educate as many people as you can, and little by little you can make a difference.

The Larry Kudlow Creed:

"Free market capitalism is the best path to prosperity."

JUL

Hi Mike,

I didn't see this one but I did today! Oh do I love this post! Thank You.....Thank You for reminding those who forget what we Americans are all about!

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