Author: Rory B. Bellows
Other then the fact the media is run by a bunch of liberals who want to create an echo chamber to make their socialist programs seem mainstream, is there any reason why people should listen to academics as they propose wacky socialist “solutions” to the problems government has created?
Take this column by Linda Stamato of the Edward J. Bloustein School of Planning and Public Policy. Stamato’s column argues that there are sensible and responsible steps government can take to address the fact that New Jersey’s foreclosure rate is skyrocketing. After you finish rolling on the floor laughing at the idea of associating the words “sensible” and “responsible” with government intervention it is important to actually address the substance of Stamato’s argument.
Her argument hinges on the fact that there are people who need to be helped. People who bought houses with the intention of flipping them or free riders get nada. Fine. I agree with that. Where there article reveals the world view of liberals is with the idea that people who are “good risks” who bought an adjustable rate mortgage that got ahead of them or people who re-financed, but can’t sell because of a depressed market need the government to ride in on a white horse and save them.
I’m sorry, but that is nonsense. What type of mortgage you agreed to or if you chose to re-finance were decisions made by the individuals of their own free will. No one put a gun to someone’s head and told them to buy an ARM. If you decided to re-fiance, you did so knowing full well that the market could take a turn for the worse. It was a risk you took, and you judged it an acceptable. When you roll the dice, sometimes they are going to come up snake eyes. It may be unfair, but that is life. Liberals do not see things that way. They want society set up so no one can fail.
Stamato complains that the state of New Jersey is doing nothing. Good. We’re better off. This housing crisis was caused by government. Government has had a policy of encouraging homeownership. The much publicized Frannie and Freddie Mac underwrite the vast majority of mortgages in this country and this has encouraged banks to give out loans they otherwise would not have. If the government is backing your loan, why give 150k when you can give 250K? Government also played a major role in this disaster with laws such as the Community Reinvestment Act. Liberals didn’t like the idea that baks were not putting money into low income areas. Liberals think poor people not having as much as rich people can only be caused by discrimination so they pass laws. Banks were then forced to invest money in areas and people they had deemed too risky and I think we see the end result of that today: Disaster.
The government needs to get out of the business of encouraging homeownership. Instead, liberals want to further entangle the government in the affairs of banks and borrowers. While it may seem like a swell idea to set up programs that allow for mediation between homeowners and banks to renegotiate loans, it destroys the idea of contracts. Why is it the government’s business to step in and tell a bank they must accept far less on a deal than what was agreed to in good faith? Instead of forcing individuals and banks to accept the consequnces of their actions, we eliminate any risk and, in fact, encourage future risky behavior on behalf of both groups by subsidizing failure.
To understand liberals and their worldview you have to understand the idea that when your only tool is a hammer, everything looks like a nail. That is liberals and academics in a nutshell. Their only tool is government so everything looks like a problem and a crisis that can only be saved by government intervention no matter what the cost of previous government interventions.