Tuesday, April 6, 2010

A MeanMesa "Quickie" - Still in Love with the Bankers?

Have you ever worked on the electrical system in an aging car engine for hours, looking for a small, intermittent short somewhere?  As long as the thing remains the way it is, your car seems as if it can't get out of its own way.

That pedestrian analogy can be applied to the banksters who have, for far too long, been literally looting our economy.  When MeanMesa was but a foolishly optimistic youth, a common humor was that "one will pay all his money either to the government in taxes or to the bankers in interest."

Toss that joke in with the current appetite to reform banking regulations and nothing very promising seems to emerge.  After all, the Republicans have already clearly demonstrated their prowess at looting every bill passing through the Congress.  Reforms to banking regulation hardly present much hope of being an exception to that "vampire-like" equivalent of a mysterious short circuit.

However, MeanMesa would like to propose an interesting plan to break this destructive economic cycle.  It has to do with just exactly who should be paying property taxes.

When a real estate property is purchased with a mortgage, the ownership -- that would be derived from the classical "rights and duties" approach -- is shared.  The purchaser owns a part of the property, and the mortgage lender owns part of the property.  All through the life of the mortgage, a ratio can be calculated.  That ratio shows the relative equity which both the property owner and the mortgage lender have in the property on any given day.  The total of both parts should, hopefully, equal the current appraisal of the value of the real estate.

Now, back to the "rights and duties" approach used to analyze a contract, in this case, the mortgage contract.  The property "owner" enjoys the "right" to use the property -- in the case of residential real estate, for example, to live in the house.  He also accepts the "duties" of, among other things, paying the property taxes on the appraised value of the property.

All of them.

Just as if he owned the property "free and clear."

The bankster, on the other hand, even though he clearly owns part of the property as a mortgage lender partner to the traditional "owner," has no "duty" whatsoever to pay property taxes on his portion.

Ooops.  Why not?

The conditions of the streets, schools, police and fire protection etc. around the property certainly support its value whether to a property owner or to a mortgage holder.  The United States Constitution refers to all this stuff as the "commons."  Are you wondering how such an arrangement could have ever begun in the first place?

Heh, heh.  Just remember who owns the Senate.  In fact, just remember who has always owned the Senate.  If you were a robber baron, a railroad magnate, a corporate oil gangster or a fast talking Wall Street broker, your name was  probably already on the bill when it left the printers.

Sometime in the distant, foggy past just such  a bunch of "wholly owned" Senators (probably, but not necessarily, Republicans) shoe horned this rancid little outrage into some legislation controlling how mortgages would work.  At the time, most Americans were "blown away" with even the remote opportunity of owning their own home, so they neither complained or even noticed.

Again, that was then.  This is now.

The neo-con looting of everything in the country which wasn't bolted down under the cover of the autocracy pretty much drained all the money into a few, certain, allegedly "Patriotic" and sincerely "free market" pockets, and the mouths associated with those pockets were, well, Loud Mouths of the First Water.

They convinced the entire country that they were, uh, our very best friends.

As such, MeanMesa thinks those bankers should have an opportunity to pay property taxes on the parts of all those mortgages they still own.  Even the worthless ones they suckered someone into buying with their stinky securitized mortgage consolidation schemes and their phony rating companies.

Saint Ronnie Rayguns said that "If you want less of something, tax it."

MeanMesa assumes this includes wild, reckless, unchecked, avaricial neo-con  greed.

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