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There is a Time for Tears

Full Speed to Port!

Posted: February 20, 2008 5:11 p.m.
Updated: April 22, 2008 5:02 a.m.
I was reading the business section of a publication. The heading at the bottom of the page read "Countrywide reports an increase in loan defaults." I got into the data and suddenly what penetrated my consciousness was the enormous pain and suffering a significant portion of our fellow Americans are experiencing. The reality of that really got to me and I found myself tearing up (God forbid).

Some will look at these figures - Countrywide's, and I suspect other lenders', pending foreclosures are up and increasing at a faster rate - and feel concerned. I wonder what happens to these people when they leave their houses? What does it feel like? Where do they go? Most likely they attempt to find rentals. Naturally the law of supply and demand may cause rental rates to rise. Will some end up on the street? Probably, but who cares. Some might say they should have known better when they signed the loan papers.

It's much more complicated than that. If their signing was the crux of the matter, do we let Countrywide, Washington Mutual, Goldman Sachs, Bear Stearns, Morgan Stanley and other banks and Wall Street giants all off the hook? It looks to me as if it's a case of taking at least two to Tango.

But as I scan business information, it is clear our economic future is in question. The combination of a declining economy and inflation is the worst threat of all. This nasty pair makes traditional cures for economic woes problematic. Lower interest rates are designed to spur the economy, but higher interest rates tend to curb it. In an earlier time in the throes of a recession the condition was referred to as stagflation.

This current economic situation is particularly troublesome because it has components that have, not in recent times, come together in such an entanglement. That makes success in the managing of economic conditions by the government less predictable. The extent that the rest of the world is affected by U.S. economic conditions is unclear and therefore threatening.

My goal is to view and digest the data but focus on the pain. When enough people in a society find themselves in pain something interesting happens. It's not unlike the old concept that misery loves company. Masses of people coalesce around the problem and want it fixed. While we are inspired by the good times we watch them roll, and like a snowball gathering in size, we live it up, borrowing to the hilt, etc. There is an inclination to care less about those around us. But when a lot of people are hurting, people's hearts open up and the result is they want change.

So what has the power to heal the economic wounds? Naturally the entity with the most power, the federal government. That's why Social Security was passed by Franklin Roosevelt's administration in hard economic times. That's why we may suddenly be able to fix and not destroy Social Security and Medicare and pass a single-payer medical program.

But it will take a Democratic president and Congress to make this happen. If FDR was the president today he would have passed laws to force sub-prime lenders to freeze all their loans and work with their borrowers and determine what is possible for them to pay. That is easily done using time-tested formulas every real estate agent and loan broker is well acquainted with. Houses going into foreclosure are of benefit to no one. I saw one article stating that some houses were auctioned off at three percent of their earlier value.

Unfortunately we have an administration locked into the concept of "laissez faire" - hands off corporations, they say. We need their largesse in order to get re-elected. They believe that the market will heal itself. The less regulation the better, ignoring the fact that the Wild West uninhibited, greedy attitude of lenders helped get us to where we are.

So I invite Americans to stock up on handkerchiefs, facial tissue and crying towels. We may be about to see ourselves transformed into a society that actually cares not just about those who look, act and think like us, but everyone. Not only those who act responsibly, but those who blew it or had bad luck.

We need a society that nurtures the highest tendencies of man rather than focusing on silly stuff that few of us are affected by. We need organizations that care for and support basic spiritual principles rather than dividing us by focusing on divisive issues only a few are affected by or care about. We need spiritual emphasis on universal truths that touch our hearts and exist in all religions, such as loving your neighbor and simply being compassionate and kind. Certainly our forefathers had that and a lot more in mind when they inserted, "to promote the general welfare," in the preamble to the Constitution.

Tears crack open the heart and confirm our oneness with each other. They wash away the ruts and rocks on the road to perfect understanding.

Phil Rizzo is a Santa Clarita resident. His column reflects his own views, not necessarily those of The Signal.


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