3 ms·

They say using Eminent domain as if thats the solution, take the banks property away. I am thinking the fallout from this move will be disastrous. These are th

They say using Eminent domain as if thats the solution, take the banks property away. I am thinking the fallout from this move will be disastrous. These are the ideas that fundamentally change the fabric of a society. Now the Government will use Eminent domain whenever a private entity is acting against the social interests of the citizens, whilst many will applaud such a move I fear it gives the Government and elected officials far too much power. Also why bother obtaining property and wealth when the Government positions itself as the taker of all things whenever it suits them best?

nl 13y ago
Now the Government will use Eminent domain whenever a private entity is acting against the social interests of the citizens, whilst many will applaud such a move I fear it gives the Government and elected officials far too much power. Isn't the purpose of government to protect its citizens when a more powerful entity acts against them? Also why bother obtaining property and wealth when the Government positions itself as the taker of all things whenever it suits them best? I agree. That's clearly not what is happening here, though. For one thing, the people who have taken the mortgage out own at least some of the property, and secondly the banks that hold the mortgages are profiting form fraud (ie, the deliberate strategy of selling sub-prime mortgages to people who couldn't afford them). Finally, this isn't what suits [the government] best. It would suit the local government if the problem could be ignored, which is what other jurisdictions (including at the Federal level) are doing.
- JumpCrisscross 13y ago
  "the people who have taken the mortgage out own at least some of the property" By definition of being underwater they own no equity of value. When a company goes bankrupt, i.e. when a company's equity value hits zero, i.e. when a company's assets are worth less than its liabilities, shareholders are wiped out. At that point they have no residual claim to the assets.
  - nl 13y ago
    Yeah, but that's an outcome of the way US mortgage system works (ie, the mortgage holder is preferred over other equity holders). It doesn't have to be this way; for example in the event of a liquidation all parties with an equity interest could have money distributed to them in proportion to the interest the hold.
- josephagoss 13y ago
  I actually agree with your last point, but the correct course of action would be for the Government to sue the banks based on this fraud. Using Eminent domain is the nuclear option. I'd rather see a court where the banks are ripped apart for their crimes, but for some reason this never happened.
  - nl 13y ago
    I think the analogy "the nuclear option" is unfortunate. But if you remember the cold war, "the nuclear option" always was that: a real, actual option. Warsaw Pact forces in East Germany were far stronger than NATO forces, but they knew NATO policy was to use tactical nukes in the event of an invasion. From the mortgaged home-occupant point of view, the banks have all the power here. Government power is the only thing they fear, but government power is a fairly blunt stick - governments generally don't intervene in individual cases and have to attempt a systematic solution, and so far it has been very ineffective. In this case the mere threat of government intervention that will actually help consumers may be enough to change bank policies (if not in Richmond, perhaps elsewhere). I see that as a positive thing, and one that will help correct a distortion in the market.
- makomk 13y ago
  Not just that, many of the subprime mortgages were missold to people who could actually obtained a much cheaper prime mortgage that would've been less profitable for the bank. (Often on the basis of race - which is one of the things that makes all the people who blame the Community Reinvestment Act for the mortgage crisis really misguided. All the CRA did was ban redlining, a practice where banks excluded everyone in predominantly-black areas from prime mortgages even if they'd otherwise be eligible, leaving expensive subprime mortgages as their only option.)
- deleted 13y ago
  [deleted]
jhowell 13y ago
I trust corporations much more.
- zero_intp 13y ago
  Why yes Mr Dupont, Mr Pinkerton, I'm just move these striking miners over.... <BANG><BANG><BANG> okay, never mind, just call the undertaker.
SeanDav 13y ago
The whole point is that the Banks were bailed out by Government, yet the struggling homeowners were not. Who looks after them, if not the Government?
makomk 13y ago
I don't think it's going to be that bad. Remember that eminent domain requires the government to pay the fair market value of the property being seized - and conveniently, it's difficult for the banks to disagree with that fair market value, because it's the amount they'd value the houses at when they inevitably foreclosed on them.
pron 13y ago
Without discussing the merits of this particular case (of which I have no knowledge aside from the article, and the facts might be, as cynicalkane claims, quite different), I'd like to say something about the premise of your argument from a more philosophical point of view. Elected officials are representatives of the populace. "Government" is, then, is not some alien entity, but at least in principle, the voice of the people. The government is therefore not the taker of all things, but the giver of all things, and let me explain that: The right to private property isn't a natural law, or even the natural form of human behavior. Human beings started out living in collective tribes. It's not that property was shared, but that there wasn't much property at all. Sure, I guess some men objected forcefully to others taking their women, but the transition from women to material property is certainly not an obvious one. Only with the advent of agriculture humans started having anything resembling property at all, and it was their decision to allow property to be owned "privately". It was society, or "government" if you will, that created the notion of private property through a social contract in the first place. So it is society, or government, that graciously allowed you to "own" anything, but that by no means implied that society could not place restriction on ownership. And if you didn't like the rules you were welcome to leave and spend your life away from society. Sure, this arrangement is pretty much the only one that has worked so far, but there have been many revisions and will be many more. But the premise should not be that society infringes on private property, but that the meaning of private property is constantly re-created and negotiated by society.
- ams6110 13y ago
  government is therefore not the taker of all things, but the giver of all things It is dangerous to view it literally this way. To think that government and/or society is giving you things, assumes that they owned them to begin with. Government owns your rights, and then "graciously" allow you to exercise them? No. Government exists to protect your rights. It's an important distinction. You rights to life, liberty, property, etc. are innate to you as a human being (the fact that others in the past have not had this view does not disprove this philosophy), and we created government and the notion of a rule of law to protect those rights. Of course not all systems of government work this way, we call those that view themselves as the arbitrary "giver of all things" tyrannies.

nl 13y ago

Now the Government will use Eminent domain whenever a private entity is acting against the social interests of the citizens, whilst many will applaud such a move I fear it gives the Government and elected officials far too much power. Isn't the purpose of government to protect its citizens when a more powerful entity acts against them? Also why bother obtaining property and wealth when the Government positions itself as the taker of all things whenever it suits them best? I agree. That's clearly not what is happening here, though. For one thing, the people who have taken the mortgage out own at least some of the property, and secondly the banks that hold the mortgages are profiting form fraud (ie, the deliberate strategy of selling sub-prime mortgages to people who couldn't afford them). Finally, this isn't what suits [the government] best. It would suit the local government if the problem could be ignored, which is what other jurisdictions (including at the Federal level) are doing.

JumpCrisscross 13y ago
"the people who have taken the mortgage out own at least some of the property" By definition of being underwater they own no equity of value. When a company goes bankrupt, i.e. when a company's equity value hits zero, i.e. when a company's assets are worth less than its liabilities, shareholders are wiped out. At that point they have no residual claim to the assets.
- nl 13y ago
  Yeah, but that's an outcome of the way US mortgage system works (ie, the mortgage holder is preferred over other equity holders). It doesn't have to be this way; for example in the event of a liquidation all parties with an equity interest could have money distributed to them in proportion to the interest the hold.
josephagoss 13y ago
I actually agree with your last point, but the correct course of action would be for the Government to sue the banks based on this fraud. Using Eminent domain is the nuclear option. I'd rather see a court where the banks are ripped apart for their crimes, but for some reason this never happened.
- nl 13y ago
  I think the analogy "the nuclear option" is unfortunate. But if you remember the cold war, "the nuclear option" always was that: a real, actual option. Warsaw Pact forces in East Germany were far stronger than NATO forces, but they knew NATO policy was to use tactical nukes in the event of an invasion. From the mortgaged home-occupant point of view, the banks have all the power here. Government power is the only thing they fear, but government power is a fairly blunt stick - governments generally don't intervene in individual cases and have to attempt a systematic solution, and so far it has been very ineffective. In this case the mere threat of government intervention that will actually help consumers may be enough to change bank policies (if not in Richmond, perhaps elsewhere). I see that as a positive thing, and one that will help correct a distortion in the market.
makomk 13y ago
Not just that, many of the subprime mortgages were missold to people who could actually obtained a much cheaper prime mortgage that would've been less profitable for the bank. (Often on the basis of race - which is one of the things that makes all the people who blame the Community Reinvestment Act for the mortgage crisis really misguided. All the CRA did was ban redlining, a practice where banks excluded everyone in predominantly-black areas from prime mortgages even if they'd otherwise be eligible, leaving expensive subprime mortgages as their only option.)
deleted 13y ago
[deleted]

jhowell 13y ago

I trust corporations much more.

zero_intp 13y ago
Why yes Mr Dupont, Mr Pinkerton, I'm just move these striking miners over.... <BANG><BANG><BANG> okay, never mind, just call the undertaker.

SeanDav 13y ago

The whole point is that the Banks were bailed out by Government, yet the struggling homeowners were not. Who looks after them, if not the Government?

makomk 13y ago

I don't think it's going to be that bad. Remember that eminent domain requires the government to pay the fair market value of the property being seized - and conveniently, it's difficult for the banks to disagree with that fair market value, because it's the amount they'd value the houses at when they inevitably foreclosed on them.

pron 13y ago

Without discussing the merits of this particular case (of which I have no knowledge aside from the article, and the facts might be, as cynicalkane claims, quite different), I'd like to say something about the premise of your argument from a more philosophical point of view. Elected officials are representatives of the populace. "Government" is, then, is not some alien entity, but at least in principle, the voice of the people. The government is therefore not the taker of all things, but the giver of all things, and let me explain that: The right to private property isn't a natural law, or even the natural form of human behavior. Human beings started out living in collective tribes. It's not that property was shared, but that there wasn't much property at all. Sure, I guess some men objected forcefully to others taking their women, but the transition from women to material property is certainly not an obvious one. Only with the advent of agriculture humans started having anything resembling property at all, and it was their decision to allow property to be owned "privately". It was society, or "government" if you will, that created the notion of private property through a social contract in the first place. So it is society, or government, that graciously allowed you to "own" anything, but that by no means implied that society could not place restriction on ownership. And if you didn't like the rules you were welcome to leave and spend your life away from society. Sure, this arrangement is pretty much the only one that has worked so far, but there have been many revisions and will be many more. But the premise should not be that society infringes on private property, but that the meaning of private property is constantly re-created and negotiated by society.

ams6110 13y ago
government is therefore not the taker of all things, but the giver of all things It is dangerous to view it literally this way. To think that government and/or society is giving you things, assumes that they owned them to begin with. Government owns your rights, and then "graciously" allow you to exercise them? No. Government exists to protect your rights. It's an important distinction. You rights to life, liberty, property, etc. are innate to you as a human being (the fact that others in the past have not had this view does not disprove this philosophy), and we created government and the notion of a rule of law to protect those rights. Of course not all systems of government work this way, we call those that view themselves as the arbitrary "giver of all things" tyrannies.