Could Her Phrasings Get Any More Trite and Awkward?
“We need a president who is ready on Day 1 to be commander in chief of our economy.” Jeez, it's like she's playing talking points bingo, where you get triple points for working three of them into the same sentence. And I want to know why Obama's not hammering on the fact that he was well ahead of the curve, suggesting a specific course of action on the mortgage mess almost exactly a year ago. Of course, that begs the question of whether bailing people out of mortgages they should have known they couldn't afford counts as a good idea. But that's a question for another day....
posted by QueensGuy @ 12:41 PM
3 Comments:
I question your use of beg the question.
On average your mortgage banker is far more sophisticated than your average mortgage borrower, even more so when you are dealing with lower-income borrowers (I assume), therefore I don't understand why all the focus is on the venal homeowners who failed to correctly calculate their future monthly income and the effect of future rate fluctuations. The mortgage providers decide, using their expertise and formulas, who is a good risk and who to lend to. Most homeowners, I would guess, assume that if the bank approves their loan application, that someone smarter than they are has concluded that they will be able to service the loan.
While "bailing out" defaulting mortgages will benefit homeowners who would otherwise lose their houses, the real bailout is for 1) an industry that bet on ever increasing home values and refused to adjust eligibility criteria for fear of losing market share. (This was a view advanced by wild-eyed liberal Martin Feldstein on a recent Charlie Rose). The bailout cry is "Please save us before we lend again!" and 2) the larger economic system upon which the mortgage industry is a key support.
Of course, any bailout needs to be evaluated not on a moral basis but on the basis of what will happen if it doesn't occur- like the Chrysler bailout engineered by well-known socialist Lee Iacocca or the decision by the reds in the Federal Reserve to insure 100% of all the deposits at big failed banks (instead of capping it at $100,000) on the theory they were too big to fail (Bank of New England). The decision was reached, rightly or wrongly, that the broader impacts and economic dislocations would be worse than interfering with the market.
I appear to have got off your point, QG - I don't know if a bailout or foreclosure moratorium makes any economic sense or whether playing in the economy at this point will make things worse or better, but to blame the crisis on the unsophisticated victims of it seems misplaced.
Anonymous is correct. I should have said "raises the question." I will leave it that way now though, just so your comment will remain comprehensible.
NEGuy, you may or may not be correct. I certainly don't buy the reliance argument, though. There are enough usurious payday lenders, rent-to-own stores, and department store credit cards out there that by now everyone should be on notice that if they want to overextend themselves into unmanageable debt at loanshark-worthy rates, somebody will give them enough credit to do it. But you're absolutely right that there's no easy way to separate bailing out borrowers from bailing out lenders.
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