A-C-C-O-U-N-T-A-B-I-L-I-T-Y Find Out What It Means To Me

by Thomas Hall

Realtor, Rabble-Rouser

Author website

Honestly, I think Aretha got it right – stick to seven letters, melodically I think it just works better.

Anyway – in my family I’ve been labeled “you liberal” – the second youngest of eight kids.  Accountability, Responsibility, Discipline and Consequences were not just words, but codes of conduct – drilled into my skull – in The Hall Household, not at all surprising considering my dad is a ’53 West Point grad.  Punishment was a given – or should I say consequences were always delivered.  Spankings were called “reminder taps” – mind the pun – for at times, taps held near dual meaning if you catch my drift.

I typically save controversial or political discussions for funerals, weddings or family renuions because, being usually void of any emotional energy, I find that people are compelled to share their views in rational discourse – no such events planned in my near future so I am forced to share my views in the emptiness of cyberspace.

Is it me or have others noticed – in reading the headlines, blogs and other online sources, I am struck by the lack of consequences and accountability due to poor judgment – a lack of management shakedowns at some of the largest companies that I suggest are at the crux of the housing debacle.

Starting at the top at Bear Sterns, haven’t heard but a blip regarding heads rolling.  No news of foreclosures on Upper East Side Townhomes or penthouses – no sheriff warrants issued in The Hamptons – no learjet repos.  Government bailout – yep.  Significant management changes due to the consequences of poor judgment?  Nope – just talk of a takeover.

Seems that same is true over at Countrywide – more “seasoned” managers have been moved around and the CEO simply retired – B of A put their guy in charge of mortgages.  Plenty of seasoning but little grilling.  Wamu’s shareholders sought accountability and won a majority of votes to remove the chairman and CEO positions – but not a great deal more – in fact senior executives’ bonuses were shielded from the loses attributed to the mortgage-related business.  I love the reasoning,  “WaMu’s executive compensation program is designed to align compensation with the company’s current and long-term business strategy and goals,” wrote one spokesperson in an email on March 25. “As a result, management is held accountable for total company performance.”  Hmm – our key management’s lack of judgment contributed to one of the most significant economic catastrophes – yet we feel that they deserve every cent – I’ve heard this before.

“Heckuva job Brownie!”

What we continue to hear are the consequences of homeowners who in many cases made very poor financial decisions – some knowingly, many unknowingly.  Hundreds of thousands of them – faced with the inevitable – foreclosure.  Their consequences are quite real – but so are the consequences of the majority of homeowners who aren’t facing a foreclosure.  They pay their mortgages on time.  Most bought a home they knew they could afford, made responsible financial decisions but are now faced with the consequences of declining values due to the poor choices of a relative few.

It seems to me that the ones who bare the greatest responsibility share disproportionately in the consequences.

Having been married (past tense) to an attorney, I’ve learned a few things:

1.  Never marry an attorney – not to be discussed here, but perhaps over several dirty martinis with blue cheese olives.

2.  When you know more than the other guy and it’s your line of business, i.e. you’re the expert, generally if you do something wrong and you should have known better, you’re held to a higher standard.

Having learned these pearls of wisdom, I continue to struggle with Congress’ half-ass solution to the crisis at hand.  Grow some balls Washington and keep your eye on the average American.

Why did Congress essentially eliminate the capital gains exemption  of $250,000 for single homeowners and $500,000 for couples by rewriting the formula – perhaps it’s simple irony that the exemption is futile – any gain you may have made in the past 5 years is gone anyway.

Why did you allow banks to choose to write down the value of homes on the brink of foreclosure?  Sorry – the bill should have said “Read my lips – no more foreclosures” – (except in certain circumstances that shall follow below).  Stem the losses now.  You will agree to write down the assets and you will provide a fixed-rate mortgage option to John and Jane Homeowner.  Period – end of story – you should have known better.

Now – your punishment – in addition to writing down the assets to what ever the current market will bear, we will require that each and every subprime mortgage application funded by your bank shall be audited.  John and Jane Homeowner, this is where your ass is on the line.  Does your W2 really state that you made $78,000 working at Denny’s part-time?  If you lied – you lose your home.

Why are taxpayers being held accountable?  I’ve heard the term moral outrage – but little action.

In terms of the first time homeowner’s credit of $7,500 – this is where good old Bear Sterns and the other Wall Street boys get their “reminder tap”.  You know all that bailout money we paid you because you were too big to fail?  When Greg and Galinda Goodguys want to buy their first home – hand over $7,500 bucks.

Hmmm – there are how many homes available?   I heard inventory is kinda high.

Payback’s a bitch.