Let me pass along a story that has extreme relevance to our current real estate picture. It involves dolphins in the Gulf of Mexico and their feeding by well meaning – although some would say misguided – people called tourists.
This story was relayed to me by a friend who used to vacation in Mexico and enjoyed boating in the Gulf. He said that a few years ago dolphins would swim up beside the boat and almost leap in to get their free meal. It seems feeding the dolphins became the thing to do.
The last time he went out he noticed not a single dolphin would swim up to the boat. Being the curious type, he wondered what had changed.
When he pulled back onto shore, he asked the locals why the dolphins wouldn’t approach his boat. The answer totally stunned him. He was told the government had outlawed feeding dolphins and included a $10,000 fine for anyone caught feeding the dolphin.
It seems that because so many people had fed the dolphin over a long period of time, they became too friendly with boaters. Not only too friendly but too dependent upon meals from vacationers. According to the local officials, the dolphin had become an endangered species in the Gulf.
They found that the dolphin either died from a boat prop, or had lost the ability to feed themselves because they had become dependent on the visitors coming down for a vacation. Obviously other factors came into play in the dolphin potential demise but they are not particularly relevant.
The only way to save the dolphin, the authorities determined, was to outlaw their feeding. The thinking was these beautiful mammals could regain their ability to survive in the wild if they weren’t given hand outs by every boat person.
Breaking The Dependency Cycle
According to my friend, the law seems to be working. The dolphin are back to eating like, and what, dolphin should be eating. Imagine that, he said, the law actually worked and the damage that was being done to dolphins was abated. It seems their dependency on “free food” was costing them their lives and if continued, maybe even the existence of the species.
Personally, I like the outcome especially if my friend is correct and the dolphin are back to being dolphin and not beggars or some other form of parasite. Mind you, that’s how I think. You may think differently.
Here’s how all of this is related to real estate in case you haven’t figured it out. We are supposedly intelligent enough to recognize the dangers involved in free-feeding dolphins, but can not see the same dangers involved in free-feeding human beings.
What do I mean by free-feeding human beings you may ask. I’ll use only the Community Reinvestment Act (CRA) as an example. Given there is so much information coming out in the news about the abuse of this particular well intentioned act, I won’t drone on with point upon point.
Suffice it to say, several different organizations had their hand so far in the pocket of the CRA, they couldn’t see the damage they were doing to the real estate market. No, they weren’t the only ones and the CRA wasn’t the only piece of legislation being abused but it can certainly be called foundational to the real estate bubble and its bursting.
I could fill this post with events by FNMA, GNMA and other GSE’s but you already know about them. Hence, one has to ask oneself how this real estate mess happened. The answer seems obvious.
I personally believe that if dolphins had a vote on the law stopping their feeding, it would still be legal to feed them.
Photo Credit: The Pug Father via Flikr