$18.4 Billion in Bonuses: Don’t Blame Wall Street!

Okay, what don’t the American public, Congress, and the President understand? You gave money to people who are in the business of making money—ANY WAY THEY CAN. You gave them the money with little or no strings attached and now you want to complain? That’s both stupid and ineffective; controls should have been put in place to ensure that taxpayer dollars were being spent as intended. At least, as a public sector contracts manager, I’m sworn and held accountable to do. And that’s the problem: no one is held accountable. Wall Street got themselves into this mess with shady deals, questionable investment practices; executives got their companies into this mess because they were more concerned with rewarding the stockholders and themselves than the overall health of their companies; banks got themselves into this mess by granting loans to people who obviously could not afford them; and the American public got itself into this mess by buying more than they could afford. Now, when the curtain falls and the show is a flop, no one wants to be held accountable.

You know, accountability is not all that hard, we, as citizens, just need to ask a few questions.

Write your President, Senator, and Representative today and ask them:

• President Obama, why did you, as a Senator, agree with a bailout plan that put little or no controls on how the taxpayer’s money could be spent?
• Congressman, why did you do the same?
• Are there no provisions to take the money back? Are there no sanctions?
• Mr. President, Congress, have you put provisions to safeguard taxpayer interest on the money you are about to give them?

You may contact your Congress via this online link from Contacting The Congress. White House.gov has a convenient online form you can use to contact your President.

And by the way Mr. President, if this happens again, don't call names, take the darn money back!

To Bail Or Not To Bail, Is It A Question?

Lately, there’s been a lot of talk among the candidates about what THEY would do to resolve the housing foreclosure crisis. John McCain, in his second debate against Barack Obama, made the “off the cuff” statement that he would have the Government purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that would keep families in their homes. [The idea] is that by purchasing the existing, failing mortgages, the McCain plan would eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.” The plan would be available to mortgage holders who live in one home as their primary residence, and had good credit at the time of the loan. The mortgage would be a fixed-rate loan the homeowner could afford. McCain Proposes Bailout for Homeowners

It’s no doubt that African Americans households, have been particularly targeted by subprime mortgage lenders, are bearing the brunt of the housing crisis. Planetizen points out that, "predatory lenders have been steering blacks toward subprime loans for years, even when they could afford prime rates. I know this is true because my finance company tried it with me.

Interestingly, first-time homebuyers make up only a small percentage of subprime loans. According to Kai Wright, over half of all subprime loans were refinances of exiting home loans. This is a real tragedy because so much of black wealth is dependent on home equity. So as the housing market collapses, much of the trumpeted new wealth that has accumulated in black communities in recent decades will go with it.

Now, I’m not sure if McCain’s plan would work. In fact, I’m not sure that even if it could, I would want it to. After all, is it fair to bail out approximately 10 percent of the homeowners who got in over their heads? How would the Government distinguish between the folks who bought the property as an investment (i.e. to flip) and those who bought it to live in for the long term? Is it fair to give them a better interest rate than me, just because they couldn’t live up to their commitments? Is it fair that when values do go up, the folks who were “bailed-out” stand to make even more profit than me because they have less in the home? Or worse, they can undercut my price exactly because they have less to loose? And if my next door neighbor sales his or her home based on the new “value” which is lower than what we both originally paid, will that really help my home's value?

So yes, the crisis in the black community is real, and we need real solutions. However, every time I pay my house note and my taxes, I just can’t shake the feeling that if something like this is passed, it would be unfair to me and others like me who are struggling to hold on. I guess the old adage just keeps ringing in my head, “who’s going it bail me out?”