Professional Mortgage Matters

 By Brian Short, CMC, CRMS, GMA

There still seems to  be much discussion about what should be done to or for the “Big Three” US Auto Makers (affectionately referred to in some circles as “The 3 Little Pigs”) who arrived in Washington, DC earlier this month stepping off their private corporate jets with a tin cup in their hands.  My private conversations with friends and family members have reflected some of the uncertainty and complexity of the thoughts and comments being circulated in the media and among our elected politicians who are admittedly “over their heads” on this one!  (I told one friend a few weeks ago, “Suit me up and put me in.  At least I understand the mortgage industry!”  Not a bad place to start for those who are trying to figure out this current mess!)

Many of the comments I have been hearing vacilate between one or two of the following positions:

“They’re too big to let fail!  Nearly 25% of all jobs in the US are in some way related to the US auto industry!”

“Let them go under! The unionized US auto worker is costing almost twice as much at those who work for Japanese, German or Korean auto companies.  This is the only way to bring the UAW back to the negotiating table to restructure and reorganize.”

“The US government made this mess by over-regulating our auto industry when the foreign companies could continue to use their standard practices and make better cars, cheaper.”  They are blaming the increased government regulation for the collapse of the US auto industry as many of us have suggested when looking at the current condition of the US mortgage industry. (This seems like a reoccurring theme.)

The comment I overheard recently which really caught my attention was one where she said, “But what about those retired UAW workers who were PROMISED their retirement?  If we let the US auto companies fail all of those retired folks will lose their retirement!”

They were “PROMISED” retirement pay?  Someone guaranteed them a certain level of pay during the rest of their days on this earth, just because they put in their “30 years”?  This guarantee was made with no respect as to the condition or continued viability of a company which has not yet successfully made it into the 21st Century in terms of what the consumers are demanding and what current levels of domestic fuel types can propel?  

Who made these promises?  What gave them the right to do so?  They are still cranking out under preforming, overpriced, inefficient machines causing us to remain attached at the breasts of foreign governments lactating their crude oil and holding us hostage to their tyrant policies directed at crippling our government, the balance of trade and our standard of living. 

They “PROMISED” them retirement?  What was guaranteed?  What is it that my buddy with Edward Jones always says?…..” Past Performance does not guarantee future results.”  Whose retirement is guaranteed?  My parents have surely seen their retirement account balance dwindle over the past several months – The Dow-Jones has fallen16% since the Presidential election!  They will likely never see their accounts recover fully to what they were prior to this most recent downturn.  My retirement is not guaranteed – assuming I EVER retire!

Retirement benefits can never be ethically “guaranteed” to anyone!  Just as your financial planner is required to say – your money will only last as long as the companies or governments in which you have bought an interest by securing stocks or bonds – or funds made up of those stocks or bonds – successfully operate.  If they fail, your interest (stock, bond or fund) will also fail.  That’s life in the REAL WORLD! 

Why should the American taxpayer be assumed to be on the hook for unethical promises or guarantees made by those doling out the UAW retirement funds when they, most likely, contributed to the failure of the US auto companies and their employee’s retirement funds?  Who is going to bail me out if my retirement fund fails? Or my parents if their retirement fund fails?  Do they deserve “full retirement” even though their companies where they they had an interest performed poorly or possibly failed?  Of course not!

Retirement is NOT GUARANTEED!  Neither is equity in ones home.  We’ve certainly seen that lie ruin a few million people this year!   Our founding fathers wrote that we were guaranteed “life, liberty and the pursuit of happiness” because those “inalienable rights were endowed by our Creator.”  Some have argued that this list of “inalienable rights” should be expanded to “include freedom of speech and expression, freedom of religion and conscience, freedom of assembly, and the right to equal protection before the law.”

Those who have been persuaded to expand this list even farther to include: minimum mage, government health care, guaranteed retirement, home ownership, never-decreasing home equity, a job you love, a spouse who always loves you, kids who never disobey, and a boss who always puts the care of his employees ahead his own bottom-line will surely bring this country and our free-market economy to its knees. 

Life is full of risk.  Some lose and some win – even on a level playing field.  What we’ve been rightly promised is the opportunity to get back up, dust off our knees and start running AGAIN!  Being pushed down once, twice or hundreds of times doesn’t mean that we’ve lost.  We lose only if we remain on our butts and never get back up. 

You mean we can keep running?  Now, that’s a pretty sweet guarantee!