We ran across this today at The Big Picture by Barry Riholtz. Foreclosure Fraud: “Systemic, Industrywide, Pervasive.” Mr. Riholtz cites a Washington Post article which describes how the foreclosure process has now become an automated machine that is a nightmare for anyone who wants to legitimately contest a foreclosure filing. Essentially law firms, hired by financial institutions, have hired what are affectionately called “robo-signers” to sign and process large volumes of documents without reviewing them. This, undoubtedly, has led to errors in these very important filings.
The mind boggles at what the mere existence of “robo-signers” says about the present day financial and legal systems. As if homeowner weren't in enough peril already.
What is more disturbing are reports that in an effort to speed up the process, persons have been thrown out of their homes without due process or access to the remedies that would be available to them. Financial institutions and the law firms that represent them are driven by financial incentives to deny the troubled homeowner even the courtesy of a call back when trying to work out their situation. Now certainly, these banks are overworked throwing families on to the streets and cannot be stopped to answer petty questions from the masses.
Aside from any moral judgments, which we should be careful to avoid due to the double minded thinking that they imply, there is a profound implication in standing by and watching this tsunami of foreclosures occur. That implication is what all of this means to the sacred for the institution or private property, the bedrock of a capitalist society. To paraphrase Ludwig Von Mises, a famous economist an founding father of the Austrian School of economics, we are not simply faced with a choice between Capitalism and Socialism as a basis for society. Socialism is an economically untenable basis for society (i.e. there is no data with which to make productive decisions). Therefore, the choice is between Capitalism (and by extension the institution of private property) or endless wars for scarce resources. More on this later.
Why is the institution of private property literally the basis for modern (or any) civilization? Rather than looking for an academic answer to this question, dear reader, simply ask yourself how many times you have thoroughly cleaned a public restroom without being paid to do it? And how many times have you cleaned (or paid to have cleaned) a bathroom in your home or in a business that you own? I rest my case.
P.S. Keep your eye on the ball!
Key Indicators for Tuesday, October 19, 2010
Copper Price per Lb: $3.80
Oil Price per Barrel: $82.63
10 Yr US Treasury Bond: 2.49%
FED Target Rate : 0.18%
Gold Price per Oz: $1,366
Unemployment Rate: 9.6%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 11,143
M1 Monetary Base: $1,460,900,000,000