Oh man, is this ever going to fire up the populists: a Gulf oil monarch now owns a decent-size chunk of the biggest American bank, which needed his money to bail its broke-butt, bad-mortgage-holding self out. Excerpt from a blog commentary:
Let’s put the pieces together.1. We have a shadowy Middle Eastern monarch. A King. He is loaded up to the gills with oil money.
2. We are worried about Middle Eastern terrorism.
3. We have a domestic housing crises that risks being a larger economic crisis.
4. We have an intangible crisis of confidence involving globalization.
5. This is about our banks and our money. Now some king in the Middle East tied to oil — and inevitably terrorism, legitimately or not — makes money if I don’t pay off the whole balance on my Citibank credit card.
I dunno, it seems to me that however irrational it may seem, it's easier for people to get freaky about a Gulf Arab outfit managing a port, because you can easily imagine a suitcase nuke going off down by the dock. But this? It seems so intangible.
Then again, there will be some mighty tasty populist scapegoating from the left and the right to come out of the mortgage collapse. Bob Herbert denounces mortgage lenders as "a swarm of swindlers" for preying on those who couldn't afford it. The case he brings up does sound outrageous, but if the swindling swarm had refused to make loans to bad credit risks four years ago, I wonder if the Herbertarians would have denounced them for heartlessly (and racistly) refusing to take a chance on giving ordinary Americans a chance at achieving the American dream of home ownership.
[Hat tip: Ross]
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Of course, in the grand scheme of things, the UAE is one of the regimes in the Middle East that we should be hoping succeeds, right? (A New York Times reader, I follow Thomas Friedman's columns closely). Compared to Saudi Arabia and Iran, they are much more pro-Western, have been very shrewd in branching out from a strictly oil economy to develop tourism and financial industries, and are actively seeking stronger economic and social ties to the west.
Do we have anything in the UAE re: links to terror or sponsorship of fundamentalist Islam a la Wahabism that we have elsewhere?
In order for the working poor to get housing, what is needed is NOT artificially low rate home loans, but both lower cost housing, and making more MONEY.
I was berating this idiotic 'ownership society' crap as soon as it showed up.
If we'd just sat down and spent that money on Habitat-for-Humanity-ish houses, small houses that are well-built but not fancy, we would have come out much better.
Instead, we built houses that cost, oddly enough, about the same amount to make, are three times as big, cost twice as much in running and three times as much in maintenance because they are absolute crap, and sold them as if they were worth five times what the smaller one would be worth. Aka, McMansions. (That 'five times' is on stop of the 100% inflation already on home prices, as even older well-constructed houses have doubled in cost.)
The homebuyer market is apparently full of total morons. I can't seem to come up with any other possible explanation. Total, utter morons. It's very hard to feel any sort of charity for them.
Of course, it doesn't help that when purchasing a home, you have four or five different parties involved, all of which get money if you purchase it, and none of them are actually working for 'you', despite the fact you actually hired some of them.
"The homebuyer market is apparently full of total morons. I can't seem to come up with any other possible explanation. Total, utter morons. It's very hard to feel any sort of charity for them."
Google: "Greater Fool Theory"
Can't really blame them for trying to make a living..
Yes you can. Buying a house is not a business, it is an opportunity to grow roots in an area and to have a secure place to raise a family and become part of a community.
In order to win the war on Islamic terror, you have to change the oil rich Arab world from a club of dictatorships (which it is today) to a club of democracies...Suddenly, the idea of helping the Iraqi people defend their infant democracy from the enemies of democracy starts to make sense.
Make sense to whom? So far, we've spent about 1.5 trillion on Iraq, with no end in sight, 100s of billions on Afghanistan, nuclear Pakistan is in big trouble, and what do we have to show for it? Are we going to spend a few trillion on each Muslim OPEC country to "change" them?
The neoconservatives don't do change, they do permanent occupation.
Something needs to change, that's for sure.
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