Monday, August 20, 2012
Contract Law And Civil Society
Civilization finally came to the human family when the honoring of contract law was finally codified. The English Magna Carta was the first revered document that finally advanced both capitalism and the rule of law. After Contract Law was mutually agreed upon by the British Monarchy and the British commoner, guaranteeing the sanctity of personal property, Britain became the supreme world power.
When our founding fathers laid out the principles for governing the newly independent United States, the concept of honoring Contract Law was deemed essential, and failing to do so would cause chaos. By honoring all manner of contract the U.S. built the most successful capitalist society in the history of the world.
Then, in the first decade of the 21st Century America elected a socialist who reviles the very concept of contract law, and who has done everything to destroy Contract Law during every day of his Presidency.
Before I get into the citation of instances of Obama's aggressive efforts to destroy Contract Law, let me present a scenario for you to ponder:
Let's assume you bought a home in 1982. You paid $45,000 dollars for your modest 4 bedroom, two bath home on the traditional quarter acre. You now decide you want to "down size" by selling your home and buying a smaller one. You hire a realtor, get an assessment, and find your house is now worth $300,000 dollars. This is great news! Your mortgage has been paid down to a $2,000 dollar balance.
So you put your home up for sale, but are flabbergasted when your mortgage holder, Wells Fargo, steps up and says they'll be taking half of those home sale profits. They want to share half of your $255,000 windfall!
Folks, that's a violation of contract law. This damned bank is trying to horn in on profits from a smart investment decision that you made!
And yet, Obama for three years has been demonizing banks that hold your mortgage and demand that the $300,000 dollars you owe on your mortgage should be reduced by the banks because you made a bad investment decision! Or because you took out a second mortgage to finance a new furniture purchase or a trip to Europe!
How is that any different than a bank who wants to confiscate half of your profits when things are going well?
But Obama's assault has not been confined to home mortgages. He violated contract law when he interfered in the GM bankruptcy, in confiscating commercial student loans and in dozens of other conforming business contracts.
Now Socialist California, as they usually do, has taken the assault on contract law to new heights; not fewer than a dozen counties in California are proposing seizing home properties under Eminent Domain laws (restricted by law to state projects like highways, etc) and confiscate these mortgages from the banks, by paying currently depressed market prices, then giving them back to the homeowner at below market rates, regardless of that homeowner's credit rating! And yes, any costs will be at the taxpayer expense!
Why would Obama and the California Socialists put the sanctity of Contract Law in such jeopardy? Well, they're pandering for votes, of course!
What will we become if anyone who makes a financial decision has no guarantee that a contract will be honored? Can anyone not understand that this actually extends the housing recession as banks are reluctant to sign a contract, not knowing if it will come under attack by ruthless politicians? Can you even imagine how quickly commerce will collapse if this trend continues? Well, I guess if you re-elect Barack Obama you'll soon find out!