Striking A Nerve

In the aftermath of the "Shout Heard Round The World", White House press secretary Robert Gibbs chastises CNBC reporter Rick Santelli for, shall we say, not being up to speed on the Obama mortgage re-modification plan. As Glenn Beck would say, may I have an ADD moment: (this coming from the group that pushed the immediate passage of the stimulus package so quickly that none of the congressional members had sufficient time to read the bill).

Given the condescending manner Gibbs operated in, it appears the administration is striking back at Santelli as well as the members of the investor public and tax paying citizens he so adequately represents. Santelli joined former Reagan economic advisor Larry Kudlow on Friday nights Kudlow Report on CNBC. Take a listen:

Without question in my mind, Santelli is correct, and I draw on this not only from my background in economics but from personal experience. I have had a job loss, am struggling to make fixed rate mortgage payments and as a result and have drawn upon my stock holdings to assist in staying current on my obligations while I build up my companies. Those who seem in line to benefit directly from the new mortgage re-modification plan are those who, unlike myself, have failed to meet their mortgage obligations. Perhaps I should have not sold out of equity positions in my stock holdings to make these payments and should have defaulted. It seems those taking that route are those being rewarded.

If I have to sell a property in distressed economic conditions that is a position I got myself in and my family and I will absorb the economic and psychological fallout, although in reality, the folks defaulting from making idiotic mortgage decisions such as interest only and highly escalating adjustable rate mortgage instruments have been complicit in the market downturn and thus, the situation I find myself in. The bloated inventory of these distressed existing homes coming on the market has put heavy negative pressure on rental vacancies, thus negatively impacting rental rates which has added further downward pressure on my monthly income. But hey, it's the politics of real estate investing.

Santelli and Kudlow are two great Americans, and I continue to subscribe to the Kudlow Creed; Free Market Capitalism Is The Best Path To Prosperity! I suspect that behind the creed is Caveat Emptor, or "let the buyer beware", and there needs to be personal responsibility for making incorrect investment decisions, be it grabbing 2000 shares of Pets.com at $113 (now worthless) or buying a $500,000 lakefront home on annual income of $25,000 with an interest only loan. This responsibility is part of the system, one which must be preserved in our free market capitalist system. Be it the dot.com advance in technology in the late 90's or the recent real estate boom, when it was going good, I do not remember anyone offering to give back any of the gains. Do you? I didn't think so.