Come on. Enough of this hand-wringing. It would really be remarkably simple to fix this nation’s financial mess. How? Just follow the money – and, when you find it, grab it.
Amid all this apocalyptic talk of $700 billion disappearing into the ether to save capitalism as we know it, everyone’s forgetting to ask a basic question: Where, exactly, did that $700 billion go? (I’m assuming, for the sake of argument, that that figure has any correlation with reality, though more likely Paulson was lying in bed at 3 a.m. and decided the number had a nice biblical ring to it – you know, seven lean years and all that.)
Anyway, that money didn’t just evaporate. Part of it, of course, went into the pockets of those comically overpaid investment bankers and financial bosses. Not that much on the scale of this thing, but still, just for a gleeful bit of retribution, of poetic justice, it’s a good place to start. So let’s go to them and say, OK, you made $30 million in the last three years. We’re really not out to be mean, and we don’t want you to lose all your toys, so just give us back, say, $29 million. You don’t have it, you say? Well, give us what you have – I guess we won’t take that McMansion you’re rattling around in, because who would buy it? — and we’ll work out a payment plan.
And while we’re at it, we could toss all those shortsighted deregulators out of Congress (and certainly not let one into the White House).
But, again, that’s just the fun part – it’s not where the real money went. For that we must look at a far larger group: the vast number of people who, over several years early in this hallucinatory decade, managed to sell houses worth, say, $350,000 for $500,000, or $700,000 houses for $1 million. I can just see those people now, gloating about having grabbed their winnings off the bloated poker table just in time. (I readily admit, by the way, that a few years ago, gazing in wonder at the wild real estate inflation, I was sorely tempted to join them, but I had one little problem: I couldn’t figure out quite where I’d move just then.)
And that’s where the money went. Houses were wildly overpriced, the giddily clueless banks rushed to hand out mortgages, and a whole lot of sellers made out like bandits. The remedy? Simple. Just add a line on this year’s tax form saying: If you sold a house between 2002 and 2005, please send in 15 percent of the sales price. (Why not the full 30 percent? We don’t want to go all socialist here, so let’s just split the difference.) Then send that money to the buyers, and they’ll be a lot more likely to make their mortgage payments.
Problem solved – or at least substantially dented.