Sunday, March 02, 2008
"Geez, I don't know. Walk away? We just saw it on the evening news. Maybe we should give them a call."
It seems increasingly clear to me that, if you're going to have a "bubble economy" (which is apparently what we've got, though it's not at all clear what the next bubble is going to be), you really have to control the media.
If you don't control the media, they'll just make things worse by amplifying the bubble as it is inflating and then making sure that, when the bubble bursts, it bursts good and hard.
By simply reporting what's happening on the ground, which, actually, is what they're supposed to be doing.
A good case in point came just a short time ago in a news segment on the ABC Evening News where they reported on the latest mortgage craze - youwalkaway.com.
No, this is not a 2005-style mortgage craze where aspiring homeowners do nutty things to get into mortgages, this is the 2008 version where existing homeowners do nutty things to get out of mortgages.
Well, not so nutty, actually, when you think about it - do the math.
Why pay $3,500 a month for a home whose value declines by at least that much over those same 30 days when you could rent a place for less than half that amount?
As reported elsewhere for about the last month or so, You Walk Away is an innovative new service that provides homeowners with a $1,000 information kit on how to walk away from a losing real estate bet.
That's good 'ol American ingenuity and free enterprise for 'ya.
How many people watched that news segment and then called friends or relatives who are behind on their mortgage to fill them in on a sensible alternative to those complicated aid programs sponsored by the government and run by mortgage lenders, both of whom probably just wish the clock could be turned back three years so every happy homeowner could once again be wealthy beyond their wildest dreams?
If we're going to have one financial bubble after another, wouldn't it make sense to reduce the amplifying effect of the mainstream media so the bubbles can inflate slower, last longer, and not cause so much damage when they burst?