Tuesday, February 17, 2009

Socialism for Corporations

A main sticking point for the party promoting big business's rights to free healthcare, aka Republicans, has been giving judges the right to revise contracts to make it possible for homeowners to pay off. If the right were given to judges to revise contracts, it would be possible for them to appraise values realistically. If a homeowner had bought at the inflated price of, for instance, $400K, and the house were worth, say, $180K, on the current market, the contract could be revised to reflect the actual value of the house. The homeowner would no longer be 'under water'. The terms could then be set to be realistic, and the homeowner would be paying not for a castle while getting a cottage, but for the real cottage.

This seems eminently reasonable in terms of working out contracts. The suckups to industry, however, are making the claim that mortgage services (usually that hotshot that mails out the glossy ad telling you that you can buy a house without a provable ability to pay) would have to charge more for mortgages. The suickup to business's point is that, if you are making a loan, you need to get the full amount that you have contracted for, from the pound of flesh that you have latched onto. Did I hear my reader say that my leanings are obvious? Yes, they are. Losses are not the exclusive property of the buyer, our world famous consumer class. The socialism for the rich, free market for the poor, concept has brought down our whole economy.

However, under said POV, it would seem that contracts would have to be sacrosanct in both directions. That is, if a business makes a contract and later finds out that the worth of what it contracted for had gone down, it would still have to pay up. Just like you. Right? You guessed it; wrong.

Last night I watched a report on farmers who had raised corn for biofuels under contract with a biofuels plant. Biofuels are plummeting as gas prices go down. Biofuels plants are closing down and declaring bankruptcy. The farmers had put out the money, usually borrowed money id est, and raised the corn. They depend on being paid under the terms of the contract. In a bankruptcy, all the claims on the party declaring bankruptcy are supposed to be considered. Now, you would expect that the price of fulfilling those contracts would be included in the charges to the firm filing for bankruptcy. You would be wrong. It's socialism for the corporations, the farmers get all the benefits of the free market.

The contention that homeowners have to pay full price - because they contracted for a product that now has lost value - is ridiculous. Beggaring the consumer has been proved over the past eight years to be totally bad for the economy as a whole.

Since it is unreasonable, why do our suckups to big business insist on it? It's payback. Being given the means to maintain themselves in public office the suckups pay back by committing themselves to the private interest against the public interest. That's how we got into the financial meltdown we're in now, and as long as we have the suckups in public office serving private interest, that's how we will continue downhill.

It's our job to keep on making that uncomfortable as possible.

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