Act One. The Penny Auctions

Nebraska, October 6, 1932. Five and a half miles southwest of Elgin, in the middle of farm country. Theresa Von Baum, a widow who worked her 80-acre farm with only the help of her sons after her husband’s death, couldn’t make the payment on her $442 mortgage. The bank moved to foreclose.

The bank expected to make hundreds, or even thousands, of dollars for the farm.

Nearly 3,000 farmers from Antelope and neighboring counties showed up at the Von Baum farm that day. They stood in silence. Waiting.

The receiver, the bank’s man, wanted to reschedule. The farmers didn’t move. After some back and forth, the receiver finally backed down. The auction would proceed.

The auctioneer started. Cows went for 35 cents apiece. Six horses sold for a total of $5.60. Plows, a hay binder, and a corn planter all brought just a few cents.

Harvey Pickrel remembered it later: “Some of the farmers wouldn’t bid on anything at all - because they were trying to help the man that was being sold out.”

When it was over, the farmers passed the hat among themselves. The total came to $101.02. They immediately returned the animals and equipment to Theresa Von Baum. Then the farmers handed the money to the receiver. He looked at the crowd. Probably counted heads. Probably decided that forcing the issue wasn’t likely to get him a cent more, and might get him a broken nose, or worse. He accepted the money as payment in full for the mortgage, got in his car, and drove back to town.

People called them “penny auctions.” Others called them “Sears Roebuck sales,” because a penny was what you paid for something in a catalog. A joke price.

This wasn’t for just one widow in Nebraska.

In 1931, about 150 farmers showed up at another foreclosure auction, the Von Bonn family farm in Madison County, Nebraska. The first bid was five cents. When someone else tried to raise it, he was forcibly requested not to do so. Item after item got only one or two bids. The total proceeds were $5.35. The farmers expected the bank to accept this sum to pay off the loan.

In Wood County, Ohio, on January 26, 1933, some 700 to 800 farmers stood out in the cold at Wally Kramp’s farm. Kramp owed $800 on a loan he couldn’t repay. He’d been hospitalized with appendicitis, and crop prices had collapsed. The farmers bid pennies on each item, then returned everything to Kramp on a 99-year lease. They passed the hat. Even the auctioneers donated their take from the sale.

In some places, farmers threatened outsiders who might think about bidding with physical harm and death threats. These were not empty threats.

This was happening all over the Midwest. There were maybe a dozen auctions a day in early 1933. Iowa, Nebraska, Wisconsin, Minnesota. Farmers who had paid their mortgages for ten, fifteen, twenty years, never missed a payment, were losing everything.

The banks had structured the loans to fail when credit dried up.

Before the 1930s, most mortgages in America were five to ten years, interest-only, with a huge balloon payment at the end. You paid the bank for years. Then you had to refinance the whole thing all at once. If you couldn’t roll it over, the bank took the farm. Or the house.

When the economy crashed in 1929, banks stopped lending. In 1932, 273,000 people lost their homes to foreclosure. By 1933, banks foreclosed on more than 200,000 farms. Between 1930 and 1935, farmers lost a third of all American farms.

Some communities didn’t take it quietly. It wouldn’t be the first time that farmers threatened nobles, even if they didn’t use pitchforks.

And it wouldn’t be the last.

Le Mars, Iowa. April 27, 1933. A Thursday afternoon. Judge Charles Clark Bradley, 54 years old, a bachelor with fifteen years on the bench, looked up from his desk at a rowdy crew shoving their way into his small courtroom.

Some were farmers in ragged overalls. Others looked like ruffians from nearby Sioux City. They kept their hats on. Kept smoking.

They’d come to demand that Judge Bradley suspend foreclosure proceedings until recently passed state laws could be considered. One farmer remarked that the courtroom wasn’t Bradley’s alone. Farmers had paid for it with their taxes.

Judge Bradley refused. He said, “Take off your hats and stop smoking in my court room.”

Next thing he knew, dozens of rough hands were mauling him. They yanked him off his bench and dragged him out to the courthouse lawn.

“Will you swear you won’t sign no more mortgage foreclosures?” demanded a man with a blue bandana across his face.

Judge Bradley’s quiet answer: “I can’t promise any such thing.”

Someone struck him in the mouth. “Will you swear now?” The jurist toppled to his knees. His teeth felt loose but he managed to reply: “No, I won’t swear.”

A truck rattled up. The men threw Judge Bradley into it. His kidnappers tied a dirty handkerchief across his eyes. The truck drove a mile out of town and stopped at a lonely crossroads.

Again they asked the judge to sign no more foreclosures. Again he refused. They slapped and kicked, knocked him to the ground, and jerked him back to his feet. They tied a rope around his neck, the other end thrown over a roadside sign. They tightened the rope. Judge Bradley wheezed, thought they were killing him.

“Now will you swear to sign no more foreclosure orders?” A man unscrewed a greasy hubcap from the truck and placed it on his head.

Judge Bradley looked at them and said, “I will do the fair thing to all men to the best of my knowledge.”

They pulled the noose tight. Just in time, a local newspaper editor arrived in his car and intervened.

Judge Bradley refused to identify his assailants or press charges.

Iowa Governor Clyde Herring called the attack “a vicious and criminal conspiracy and assault upon a judge while in the discharge of his official duties, endangering his life and threatening a complete breakdown of law and order.” He declared martial law in Plymouth County. He sent in three National Guard companies from Sioux City and a fourth from Sheldon.

The case made the front page of the New York Times.

Twelve days later, Governor Herring lifted martial law. Seven men were eventually tried for the attempted lynching. They got sentences ranging from one to six months.

The penny auctions effectively forced the banks to release the property without an opportunity to be paid the balance of the loan. If the pennies didn’t clear the bank debt, the farmers physically threatened the bank officers. So legally, the farmer still owed. But practically, the system had broken down.

With the beginning of Roosevelt’s presidency in 1933, creditors and debtors began to work together to refinance and resolve payment of delinquent debts.

Between 1933 and 1935, twenty-five states passed farm foreclosure moratorium laws that temporarily prevented banks from foreclosing. The Federal Farm Bankruptcy Act of 1934 aimed to provide farmers with the opportunity to regain their land even after foreclosure.

The penny auctions didn’t erase the debt. But they made normal foreclosure impossible. They created chaos. Mobs dragging judges out of courtrooms. Nooses at farm auctions. Armed farmers blocking highways. This chaos threatened domestic tranquility.

That’s one of our six national goals outlined in the Preamble to the Constitution. “Insure domestic tranquility.” When hundreds of farmers are willing to lynch a judge to stop foreclosures, you no longer have domestic tranquility. You have the early stages of revolt.

So the federal government had a choice.

It could side with the lenders and use force to restore order. Send the National Guard to areas of interest. Arrest citizens. Or it could step in and redesign the system so that foreclosure wasn’t the only option when credit dried up.

Roosevelt chose the second path.

In 1934, Congress established the Federal Housing Administration (FHA) as part of the New Deal. The idea was simple. The government would insure mortgages for private lenders, which would get banks lending again. But FHA came with a condition.

If the government was going to insure a mortgage, that mortgage had to be fair to the borrower. No more interest-only traps. No more time bombs. Every payment would include a portion of the principal. And the term had to be long. Initially, 15 years or more, later extended to 20, and eventually to 30. At the end of the term, the borrower would own the house free and clear. That was the deal.

The government would step in to set conditions to make the housing market fair for Americans, and those loans would be designed to end. Designed to turn debt into property within a normal working life. Designed to make the borrower an owner, not just a lender from a bank. Someone with equity and security.

Then, in 1938, Congress created Fannie Mae, the Federal National Mortgage Association, to buy those FHA-insured mortgages from banks and create a secondary market.

They built the whole system around the principle that mortgages had a finish line achievable by working Americans in their lifetime.

When government first stepped into housing finance, it used its power to limit how long the debt could last. Because the alternative, letting the old system grind on, meant more Judge Bradleys with ropes around their necks. More penny auctions. More bricks through windows. More breakdowns of law and order.

The government stepped in on behalf of borrowers because not stepping in meant civil unrest.

Fast forward to 2025.

Today, we have the same basic structure. Now, there’s a new proposal.

The White House and housing industry leaders are proposing a 50-year mortgage. It would cut your monthly payment by maybe $150. But because the term is longer, it would add hundreds of thousands in extra interest over the life of the loan.

And, if you buy at 40, the current average age of a first-time homebuyer, you’re making your last payment at 90. Only about 25% of those who reach 65 live to be 90.

Instead of using government power to shorten the road from debt to ownership, we are proposing to use that same power to stretch it. The proposal might keep payments small enough to feel manageable. But it also maximizes how much interest a family pays over a lifetime. And many will never achieve a house they own free and clear.

So, our question.

Why would government deliberately choose a structure that benefits lenders instead of buyers?

Everything costs something. If we are going to subsidize homeownership, we have choices about what we’re subsidizing.

To give power back to the people, there are lots of things we “could” do. We could subsidize the interest rate instead of stretching the term, saving first-time homebuyers money over their lifetime and enabling them to own their home outright sooner. We could incentivize builders to build more houses that hit lower price targets. We could ban zoning laws that make building houses less profitable.

A 50-year mortgage does the opposite. It extends the trap. It makes real, debt-free ownership something most buyers will never live to see.

Act Two. Sarah and Michael

Meet Sarah.

It is 1955. She is twenty-seven. A nurse at Louisville General. She comes home from the night shift with swollen feet and the smell of antiseptic clinging to her hair. Her husband, Tom, sorts mail for the post office. His back aches when he bends to pick up their two little boys.

Sarah is expecting their third child.

They are still in a rented duplex. One tiny bedroom for them. One for the boys. Crib jammed against the wall. There is a damp spot on the ceiling over the kitchen table that nobody ever fixes.

One Sunday after church, they drive through the Highlands. They see a ‘For Sale’ sign in front of a small brick house. Three bedrooms. One bath. Hardwood floors. Eleven hundred square feet. Built in 1948. Price: $11,500. They’ve been saving every spare nickel for a down payment.

The bank offers a 30-year FHA-insured mortgage at four and a half percent. Ten percent down, $1,150. The payment would be around $52 a month with taxes and insurance.

That night Sarah sits at the kitchen table with a pencil and a pad of cheap paper. The boys are asleep. Tom is reading the sports page. She does the math, lips moving. If they do this, if they make every payment, they will send the bank about nineteen thousand dollars in all. About eight and a half thousand in interest. The rest toward the house itself.

She circles one number. The last payment would come when she is fifty-eight. Tom would be sixty. After that, there would be no more checks to the bank. Just taxes and insurance. The house would be theirs.

She presses her hand to the spot where their third baby kicks and imagines that child running down a hallway that belongs to them.

Her parents never owned a house. They worked and rented and worked some more, and at the end, there was nothing but a trunk of clothes and a few dishes. They don’t follow Sarah’s numbers, but they understand the stakes. She is about to break the pattern.

Sarah and Tom got the loan.

Years later, Sarah made her last payment in 1985. She was 58. She tore the check out of the checkbook, walked it to the mailbox herself, and stood there for a minute after she closed the lid. Tom asked her later why she’d done that. She said she didn’t know.

Now meet Michael and Emily.

It’s 2025. They are thirty-three. Both work full-time. Michael teaches history at duPont Manual. Emily does marketing at Brown Forman, sliding between meetings and endless email. On paper, they are doing everything right.

They are also early. Most of their friends still rent. A few have moved back in with their parents. Michael and Emily are trying to get ahead of their generation and buy a house before prices climb again.

They have been trying for a baby, too. Quietly. They haven’t told their parents yet. Every month that passes without a second line on the home test makes them think about money even more. If it does happen, will they be able to afford daycare and a mortgage and groceries?

One evening, they sit at their own kitchen table in a rented apartment and pull up a listing. Same neighborhood. The exact same house Sarah and Tom looked at 70 years earlier. Three bedrooms. One bath. Eleven hundred square feet. The kitchen has granite now. The photos are brighter. The old bones are the same.

Price: $265,000.

The bank offers a 30-year mortgage at seven percent interest. With taxes and insurance, the payment comes to about $1,765 a month. Roughly a third of their take-home pay.

Michael feels his stomach clench when he says the number out loud.

The loan officer smiles and offers something else. A 50-year mortgage. Same interest rate. Longer term. The payment drops to about $1,600. Just under thirty percent of what they bring home. It is not comfortable, but it is not impossible.

Back at their table, it’s Emily who opens the laptop. She pulls up an online calculator. Michael sits across from her, hands knotted together so tightly his knuckles go white. Emily does the math. She shows the screen to Michael. He looks at the number and doesn’t say anything for a time.

They walk through it line by line. If they take the 50-year loan and never miss a payment, they will send the bank a little over $956,000. $265,000 in principal. More than $690,000 in interest. The last payment due when they are eighty-three.

Not many of the men in his family live into their late 80s. Emily would have to carry the debt. She’ll be 83, still writing checks to the bank for a house they thought they were buying together.

Michael stands up and paces a tight circle in the small room.

Emily stares at the number on the screen. Then she closes the laptop gently, like she is afraid to break it because she can’t afford to buy a new one, and crawls into bed in the next room. She pulls the covers over her head. Somewhere under all that fabric is the thought she does not want to say out loud.

The room is very quiet. Just the hum of the refrigerator and the distant sound of a train.

Let’s pause here.

Same house. Same street. Same square footage.

For Sarah and Tom, the total interest bill is around $8,500 over thirty years.

For Michael and Emily, the interest is more than $600,000 over fifty years if they choose the new product that makes the monthly number work.

The house didn’t grow. The walls aren’t thicker. The yard didn’t expand.

What changed is who the mortgage is built to serve.

In 1955, the local bank likely kept Sarah’s loan. Her payment flowed into a building downtown and came back out as savings interest and salaries for people who lived near her. Officials who had watched farms and homes fall in the 1930s designed the mortgage. They wanted loans that ended, loans that turned renters into owners during their working life.

In 2025, Michael and Emily’s loan won’t stay with their bank at all. It’ll be sold to Fannie Mae, bundled with hundreds of others, turned into a bond, and sold to investors who may never set foot in Kentucky. Pension funds. Insurance companies. Wealthy families. Foreign governments. They will collect the interest for as long as Michael and Emily can keep paying.

The extra twenty years on that 50 year loan are not there for Michael and Emily. They are there for the people on the other end of the bond.

It doesn’t have to be this way.

The government could use its power in housing to help in cleaner ways. We could lower the interest rate for first-time buyers, as we did for veterans after the Second World War. Same 30 years. Smaller payment because the loan itself was cheaper. The family pays off the house while they are still working.

Or we could lean on prices, as FHA once did when it tied maximum loan amounts to wages and construction costs. It could lean on zoning and tell states that want federal money to allow more homes on the same land.

We know how to do every one of those things. We have done them before.

Instead, the new idea on the table is a mortgage that lets Michael and Emily sign now, feel a little relief when they see the monthly payment, and quietly gives away two more decades of their future income to bondholders.

Put Sarah and Michael in your mind.

For Sarah, the mortgage is a hard climb with a clear top. At fifty eight she steps off the last rung. When Tom dies, the house holds her up.

For Michael and Emily, the mortgage is something else. It runs out past their working years into a fog of what ifs. What if the baby comes. What if one of them gets sick. What if a job disappears. The house is no longer a promise that one day the payment goes away. It is a contract that follows them to the end.

The bank owns the house for their lifetime. They’ll likely never own it outright.

Sarah stood at that mailbox in 1985, and the house was hers. Michael might stand at that same mailbox in 2075, if he lives that long. Fifty years of checks. Both of them worked hard. Both of them loved their spouses. Both of them wanted the same thing. But only one of them got to be free of it while they could still walk to the mailbox on their own.

Act Three. The Dead Have No Rights Over the Living

Thomas Jefferson wrote to James Madison in 1789 about debt. About whether one generation could bind the next. Jefferson said: “The earth belongs to the living, not the dead.” No debt should last longer than a generation. Because the dead have no rights over the living.

Madison wrote back: Thomas, if we did that, we’d have no continuity. No long-term projects. No bonds.

Jefferson backed off. But he never gave up the core idea: A republic should not chain the living to obligations they never consented to.

Michael’s kids will inherit the debt for his house while the mortgage is still being paid. They didn’t sign the paper. But the debt will still be there.

The Fifth and Fourteenth Amendments say the government can’t take our “life, liberty, or property” without due process. The Courts agree. Property is a core Constitutional interest, even if it often gets less media coverage than speech or bodily liberty.

Liberty includes the right to “marry, establish a home, and bring up children” along with the right “to contract.” “To engage in any of the common occupations of life.” “To acquire useful knowledge.”

The right to establish a home. Not rent one from a bank forever.

Nobody’s saying the government has to buy you a house. But once it steps into the housing market, and it already had to in 1934 due to shady bank practices, it’s no longer a bystander.

If Fannie and Freddie say “we’ll buy 50-year mortgages,” they’re putting the power of the United States government behind a loan structure where most buyers will never own their house free and clear.

They’ll spend their whole adult lives paying the bank.

Liberty isn’t just the freedom to sign a contract. Inherent in a contract is a beginning and an end. It’s the freedom to finish it and move on.

We are condemned to be free.

We grow under the weight of our own choices. Not under the weight of a payment book that outlives us.

When the government standardizes mortgages that run past a normal lifetime, it’s not helping you get a key. It’s turning home ownership into permanent tenancy. You live there. The bank owns it.

And that shouldn’t be the federally blessed default answer to a housing crisis.

If the Constitution protects our liberty to establish a home, then a government that normalizes 50 year mortgages is not expanding that liberty. It is quietly redefining “home” as a place you can live in, but never live free of the debt that is attached to it.

Back to our question. Why would government deliberately choose a structure that benefits lenders instead of buyers? It pretends to solve a political problem. Just not for you.

May God bless the United States of America.

Music from Epidemic SoundArtist: Aerian, Hanna Ekstrom, Anna DagerSong: Mosaic

Postscript.

I’ve been trying this recipe out. It’s my own creation. If you try it, let me know what you think!

Wyoming Winter Pasta

Ingredients (serves about 6, including 2 hungry teenagers)• 1 lb ground elk (or lean bison or beef)• 1 lb bulk pork breakfast sausage• 1 large onion, finely chopped• 2–6 carrots (depends on size), peeled and finely chopped• 2 celery stalks, finely chopped• 8 oz sliced mushrooms• 3 cloves minced garlic• 1 jar (about 24 oz) preferred marinara sauce• 1/4 to 1/2 cup Madeira wine• 1 tbsp Worcestershire sauce or fish sauce (adjust to taste)• 1 Parmesan or Pecorino rind (about 3–4 inches), if available• 1/2 cup heavy cream• 2 Tbsp butter• 1 tsp herbes de Provence or other herbs• Olive oil for cooking• Salt and black pepper, to taste• Freshly grated Parmesan or other white cheese for serving• 1-2 lb pasta

Instructions

Heat a large skillet over medium heat and drizzle in olive oil.

Add celery, onion, and carrots. Season with salt and herbes de Provence. Cook until softened, at least 6–8 minutes. I usually cook them 20 minutes or more, stirring occasionally, while I get everything else ready.

Stir in garlic and cook 1–2 minutes until fragrant. Move cooked vegetables to a big pot.

In the same skillet, sauté mushrooms in olive oil until golden. Add them to the pot with the vegetables.

Add ground elk and pork sausage to the skillet. Break up the meat and cook until browned. Drain if necessary, then return the meat to the skillet.

Sprinkle with Worcestershire sauce. Stir. Add the Madeira wine, scraping up any browned bits. Let the wine reduce until there’s only a small amount of liquid.

Transfer all cooked ingredients to the pot. Stir in the marinara sauce. Add the Parmesan rind if you have one. Taste to see if it needs anything.

Lower heat to a simmer and cook uncovered 30–45 minutes, stirring occasionally. If it gets too dry, add half a cup or more of water.

Remove the Parmesan rind. Taste again. Remove from heat and stir in heavy cream. Taste once more and adjust seasoning if needed. Maybe add a couple of tablespoons of butter.

Cook pasta according to package directions, reserving about 1/2 cup pasta water. Stir this pasta water into the sauce, then add the pasta and toss to coat.

Serve with Parmesan or other cheese.

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