It's a message we shouldn't ignore (12/01/07)

Here's a word of caution.

Over the next several months, whenever you hear the words "gloom and doom," tune out.

Chances are, what you would be hearing is political spin.

Ronald Reagan may have been the first politician to use the phrase, though it could date back to Jimmy Carter.

Either way, the intent was the same: Dismiss any unpleasant news as "gloom and doom," portray the bearers of that news as enemies of the public good, and distract attention to the reports that led to the unpleasant news in the first place.

These days, it seems the "ignore the news of gloom and doom" mantra comes primarily from the real estate sector, especially the real estate sector in America's urban areas.

One recent statewide business publication featured a column that used up hundreds of words to blame "the media" for preaching "gloom and doom" about the subprime mortgage mess.

Unfortunately, the mess is real, particularly for urban areas, those places that have seen the largest run-up in home prices.

And it does no good - except in self-serving political terms - to complain about the messenger.

The message is bad news, no matter how you shake it.

Fact is, over the past several years, mortgage firms have enticed millions of Americans into taking on more home debt than they could handle, all predicated on the assumption that property values would continue to ramp up endlessly.

But in any market-based economy, nothing happens endlessly.

And millions of Americans are now facing foreclosure or worrying about the next "re-set" of interest rates on their mortgage.

A generation ago, banks made loans to people they knew to buy properties whose values were understood by both the borrower and the lender. And for small town America - especially Jay County - that's still pretty much the case.

But in urban areas and when local homeowners took on second mortgages and home equity loans from distant lenders, that fundamental relationship disappeared.

The result, as anyone who has been paying attention to financial news can tell you, is a potential disaster.

It's not going to be easy to solve.

But to solve it, the nation first needs to face up to it.

That means, jettisoning the rhetoric that blames the messenger and focusing on the message instead.

Are "gloom and doom" possible? You bet.

But we can't address that possibility unless we first admit it. - J.R.[[In-content Ad]]