09 July 2010

The rich are different: they are more ruthless

It was Warren Buffett who observed that there is a class war in progress, started by the rich, and the rich are winning. So, it should come as no great surprise to read in today's NY Times a story about the plight of million dollar defaulters.

The title of this post is a quote from the economist who compiled the data for the Times.

The money quote:
The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default. The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.

I can already hear the RushBoys bleating, "you're just crying because you want a class war, and you're poor". Sort of the same crap that Paul was spewing about criticizing BP. Where, oh where, is the call for personal responsibility? None, of course, since the point of being rich is that, as Fitzgerald said, "the rich are different". Now, if only we could get them to just pay what they owe, the rest of us wouldn't have keep paying all the sub rosa welfare to them. Fat chance.

And a short observation, which might be expanded someday into a full post, about the Times. I have been waiting years, literally, for the Big Time Pundits to figure out the implications of the shift in advertising from newspapers to the likes of Google. So, I guess it's left to me. It was known for decades that much of the revenue that supported newspapers came from classified ads. If you're under age 30, you may not even know what that means. Translation: all those Craig's List ads for used cars and appliances once got printed at the back of your local newspaper. The sex treats ones, not so much; those are a Craig's List "innovation".

The loss of classified advertising revenue has two implications. The first is that the replacement money has to come from other forms of advertising or price rises. The second is more subtle and insidious; classified adverts are influence neutral, while other advertising (as history has shown) and price are not. To the extent that the Right Wingnuts control all news dissemination, is the extent to which they control elections and the courts and, well everything that matters. There are reports that Yahoo!, Google, AOL, and such are "personalizing" news displays to fit the user. Stupid news for stupid people.

If we lose the Times, it's Robo Cop Time. While I wanted to live to 104 as my karate teacher's teacher did (he got at least that far), a Robo Cop world may not be worth it.

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