On Friday, April 11th, Republican Senator and Presidential nominee John McCain defended his heavily criticized proposal that $3 to $10 billion in taxpayer money be spend to bail out between 200 and 400 thousand U.S. mortgage holders who are in danger of being foreclosed on.
When attacked by both Democrats and conservative voters for his proposed program, which many see as waffling on a core issue McCain, who was down in Dallas, Texas, replied, "I said there shouldn’t be a broad government bailout. But I said very clearly — and I’d be glad to get a record of what I said — I said the government has to enact reform to prevent the kind of crisis we have, and there was a role for government, and I supported a bipartisan solution."
This is John McCain’s major problem: he almost always wants a bi-partisan “solution”.
Besides not understanding economics, McCain doesn’t understand that deliberately seeking out bi-partisan “solutions” is otherwise known as being “half-assed” (especially when your opposed partisan is the Democratic party, the symbol of which is the jackass).
It is one thing to have your mind open to the real possibility of arriving at a bi-partisan solution. This is the way things typically have to get done in the reality of the messy political and social world.
It is quite another thing entirely to pain yourself to please no-one by be half-assed with your core values.
Instead of saying there’s a role for government in a bailout that favors people who bought over their heads over people who used their heads, why not, instead, reform the cracked and fissured mortgage lending system that we have by kicking government out of it?
After all, this is mostly the government’s fault. The government encouraged, even forced, lenders to come up with junk paper to get homes for people that would have been turned down for mortgages in previous times. They still could have had places to live—they could have rented for a while longer, gotten their credit and finances in order.
But no; government sought to reward sloth, or weakness of will, or lack of determination.
Why not reform the government so that FNMA, FHMLC, and GNMA are no longer permitted to purchase the "alternative" mortgage programs designed to get virtually anybody a house? Those loan programs that require zero money down. Those that are "stated income", those that are "no doc" (meaning nothing at all that means a borrowing party is capable of paying back the loan needs to be documented, or proven to exist).
How about making it a violation of federal law for FDIC underwritten lenders to bait mortgage shoppers with the non-existent teaser rates that get people to make calls?
But let’s be clear: There really are very few “mortgage victims”. In the free marketplace, it’s a situation of caveat emptor – buyer beware. The documentation that borrowers are supposed to read and sign off on before being responsible for a mortgage is so circumspect that I’m shocked mortgage companies haven’t yet been sued by the Save Our Trees Foundation, or some such entity.
Salesmen are going to be salesmen; that’s what they get paid for. It is their responsibility to get someone to presently make the decision to buy something. It is their prospect’s responsibility to understand what he wants and what he can afford.
Americans are voluntarily beggaring themselves. The more we let ourselves rely on government to meet our needs, to repair things when we break them, to figuratively shield us from the elements, the more we are on the government dole – and the more malnutritioned we become.
McCain, you need to be a leader, not a dole-outer.
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