Friday, February 20, 2009

The Wrong "Ex" Word?

During this podcast with NPR's Planet Money blog crew, Amir Sufi refers to the idea of "externalities" in the home market - that is, everyone suffers if foreclosures get away from us, and therefore it is in everyone's best interests to cough up some dough to halt the slide. Home prices suffer, infrastructure crumbles, crime rises, schools get worse, et cetera.

So the message to (self-described) "responsible homeowners" and other sorts of upstanding citizens is that it's going to suck to be you either way - you can pay us, and it will suck to be you somewhat, or you can not pay up, and it can suck to be you a lot more, so you're better off paying up.

I think that "extortion" is the word that comes to everyone's mind...

While Mr. Sufi's point is well taken, this really comes across as a lose-lose for those people who had the sense/luck/foresight to stay out of trouble. If there's no way to convince people that they're some real way in which they win with this, this plan will engender little other than hostility.

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