Bail-Outs, Personal Accountability, and Getting Booed

September 20, 2007 |

refargue.jpgLast week, I told you what I thought about government bail-outs for the real estate industry. Yesterday, the Fed stepped up and took action. What the Fed did was more of a band-aid than a bail-out.

Not to be upstaged, and since politicians are generally moved by their insatiable need to do something, the House of Representatives passed bail-out legislation for homeowners. I expected the House to wait at least a day so that the legislators would get more publicity from the move, but maybe their intention was to be more stealthy with it. Whatever their motivation, I still don’t like it.

All of these federal actions provide and interesting backdrop for a discussion that has been going on at the BloodhoundBlog about the viability of the National Association of REALTORS. Greg wrote an excellent post last night about committees and why they usually fall short of our misplaced expectations. Kris Berg responded with an excellent post describing her own take on the issue. The debate is interesting because it parallels the national goings-on in some ways. While we debate whether or not the NAR is truly an organization that offers any benefit to its members; and while we debate the actions of the NAR, which governs the actions of its members, the Federal Government (an organization to which we all belong, one way or another, like it or not), is busy takings its own highly debatable actions that effect the real estate industry. The beauty is that it is all up for discussion and debate. Allow me to add my own perspective on the issues at hand. . .

Do You Want Learn About Personal Accountability and Bail-Outs? Become a Referee.

A person’s perspective on any given issue is largely the result of that personals personal experiences. Sprinkle in a little bit of the second-hand experiences of others, and, voila! An opinion is born. In this case, my experiences as a basketball referee most certainly color my opinion on the matter. You see, in my job as a basketball referee, I get to experience a very real demonstration of personal accountability every time I blow the whistle (or don’t). Example:

Two years ago, I was officiating a high-school girls’ Varsity game. The game in question was at a school well known for its raucous crowds. Unfortunately, their team wasn’t playing very well that season, barely winning any games. This game, however, they were winning. With 2 minutes left in the game, the home team was bringing the ball up the court when went a pass went out of bounds. My partner blew the whistle and indicated the ball belonged to the visiting team. At this point, I made a MONUMENTAL mistake (two actually). First, I was 100% sure that the visitors had touched the ball before it went out of bounds (mistake 1– I was 100% wrong). As such, I gave this information to my partner. We decided to change the call. I then proceeded to point in the wrong direction (towards the visitors goal–mistake 2). I then had to change the call AGAIN, and point in the other direction. The whole thing looked very ugly. To make matters worse, everyone on the sideline knew the call I made was wrong, including the visitor’s bench (who was also behind by 20 points at this time). I didn’t find out how wrong I was until after the game, but I knew something was up just by the reaction I was getting.

As can sometimes happen with officiating, that one call, one simple out-of-bounds call, destroyed our entire game. The play looked terrible, which hurt the credibility of the crew. The visiting coach went ballistic (understandably) and my partner had to give her a technical foul. This riled up the players. . .it just went on and on. The last two minutes of that game were the longest two minutes of my officiating career. It was horrible.   It was the worst moment in my officiating career (so far).  I had to suffer through the whole thing.  There was no-one to help, no one to turn to, no one to bail me (or my partners) out of the mess I had created.

More importantly, it is a moment I will never forget.  You can bet your bottom dollar that I learned a lot from that experience.  I have applied those lessons in my other games so that I can avoid having another similar screw-up.

. . .Back to the Real Estate Industry

What does this have to do with the real estate industry?  It’s simple– sometimes, we need to screw up.  We need to make mistakes, we need to be hurt.  Suffering real, direct consequences is one the fastest ways to learn something important.  When I am on the basketball court, the consequences of my actions are immediate, and they sometimes aren’t pretty.  I’ve been roundly booed, I’ve been screamed at, I’ve had very not nice things said about me.  Sometimes those consequences were warranted, sometimes they weren’t, but experiencing them has helped make me a better basketball official.

If the federal government simply relieves foreclosures by offering assistance, what lesson is learned?  How are people going to know when they have done something wrong if we turn around and make everything right again?  I fully understand the desire to step-in and help people who are suffering, but going through a foreclosure isn’t going to kill anyone.  It certainly will not be pleasant, but everyone will survive.  There are times when the best thing you can do to help someone is to do nothing at all.

I also don’t blame the Federal government for getting us into this mess.  Getting here was a collective effort.  It took a little bit of greed, over-exuberance, and mistakes by a lot of people to put us into this situation.  Now, we are charged with learning from those mistakes, avoiding greed, and working to avoid a similar situation in the future.  As a student of the economy, and the causes of the Great Depression, you can rest assured that Dr. Ben Bernanke is working hard to learn from the mistakes that were made in the past and avoid anything remotely  similar in the future.

So what are you going to do?

[tags] real estate, realtor, charlottesville, virginia, house of representatives, federal reserve, bernanke, FHA, basketball, officiating, referee [/tags]

Posted by Daniel | Filed Under Buying, Finance, Industry Issues, News, Officiating, Selling 

Comments

3 Responses to “Bail-Outs, Personal Accountability, and Getting Booed”

  1. Jeff Brown on September 20th, 2007 8:27 pm

    My empathy runneth over Daniel. Been there, done that.

    Having consequences buffered sends the wrong message. Remembered pain is a far better teacher than past rewards.

    Fine post.

    [Reply]

  2. Kris Berg on September 21st, 2007 6:11 pm

    >How are people going to know when they have done something wrong if we turn around and make everything right again?

    An excellent point. I always tell my kids when they screw up (the first time) that we can’t learn how to do something “right” until we have done it “wrong”. And, accountability is a valuable part of the lesson.

    However… the sticky part is the caveat you offered - It took a lot of people and their mistakes to get us here. How do you differentiate between the greedy or needy buyer who knew full well the risks and the misinformed, uninformed, or the defrauded buyer? This is where my (unpopular, it would seem) proposition came in; even at the risk of rewarding poor judgment and outright bad behavior, sometimes balancing personal accountability with some social responsibility makes sense.

    Love the analogy, by the way.

    [Reply]

  3. Daniel Rothamel on September 21st, 2007 6:42 pm

    Kris,

    Thanks for the comment! The issue that you raise will always exist. When it comes to government intervention, I am a big believer in the law of unintended consequences. The best thing we can do to help those who were legitimately defrauded is to identify and compensate them, and then find and punish those who did the defrauding. My concern is that the government will simply take a blanket action, and then call it even.

    On a related note, the simplest thing that can be done to prevent this in the future is to give people some financial literacy education. I have been saying for years, that I wish something like that would be taught in high schools across the country. Even a little bit of education would go a long way to helping people in the future.

    [Reply]

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