Tygert Isn't A Saint (That's His Real Name, Look It Up)

I’ll try to make this quick … And absurd.  Here we go.  I’m about to compare Extreme Makeover: Home Edition, to the cause of the recession.  Now listen, I know what you’re thinking … but no, it has nothing to do with how annoying Ty Pennington is.  Although I’ll admit, that guy is so hyper he makes crackheads say, “Man, that dude’s a fuckin crackhead.”  It’s not to do with him though. It has to do with incentives and intentions.

I'll get to the Extreme Makeover connection in a moment, but you see, although plenty of people will argue, a major cause of the recession was poor incentives for mortgage brokers.

The Cliffs Notes are like this: mortgage brokers get paid by volume.  More mortgages, more money.  So they put people in houses they cant afford. Even if the house on the application has more bedrooms than the applicant has teeth (and even if it means tricking them into believing they can afford it).  And why?  Because is a mortgage broker’s incentive to do right by the homeowner?  Shit no!  It’s to sell more mortgages!

Well we know what happened from there: boatloads of unsafe mortgages were packaged into securities by the banks and given high ratings (because the rating agencies were being paid by the banks, another brilliant way to incentivize, HA!).  Then, every Tom, Dick, and Lehman was buying these securities like they were Crocs and it were 2007.  That is until everyone realized they were ugly as sin, (i.e., the homebuyers couldn’t make the payments), and the securities (much like Crocs) were worthless, and since everyone and their transgender half-brother was balls-deep in this stuff, BOOM, recession. (For a nice powerpoint you've probably seen to explain this concept check this out)

Well what does this have to do with Extreme Makeover: Home Edition?  The recession itself?  Not much.  The CAUSE of the recession?  A lot.  You see, you’ve heard the term “predatory lending”, right?  Well how about “predatory shit-hole house demolition and mansion building”?  Extreme Makeover does the same thing mortgage lenders did to start this whole mess: they put people in houses they can’t afford.  Now if you’re thinking, wait RG$, Extreme Makeover pays for the houses, that’s a good point.  Yes the house may be paid for, but guess what?  Ty Pennington doesn’t pay your electric bills (he uses all his money on hair gel).  And as you can see here, mansions aren’t cheap to keep up, especially when you take out home equity lines on them.

But why should Extreme Makeover care?  The reason they don’t?  Their incentive is like a mortgage brokers.  To make money.  And how do they make money?  By selling ads.  And how do they sell ads?  By making compelling TV.  And how do they make compelling TV?  By picking the poorest people possible, in the worst houses you can imagine, and then give them the most extravagant upgrade a willing reality show contestant could dream of.  But that is where the comparison ends.

Okay, that was a little exaggerated, most of the people on that show actually benefit from the “good deeds” that ABC “unselfishly” does for them.  But there are two points here:

1)  People (both mortgage brokers and television executives) will do what they are incentivized to do.

2) It is not the deed that determines the goodness; it's the intent.

Think about it kids.  God bless.