Flashback -12/07 - National Review Denounces Efforts To Respond To Subprime Crisis

[Median Democrat]

A year has past, the economic crisis has deepened, yet conservatives still continue to repeat the same arguments against responding to the mortgage crisis. Heck, they even opposed Bush's tentative, piecemeal efforts. Its a wonder that the news media allows them to repeat these same talking points without pointing out that they were wrong then, and they are wrong now.

http://article.nationalreview.com/?q=NGU3MDNlYTgyYTUwOTViYTNjNWQ2NWZhNWFiODkxZWU=

/snip

Under the proposal the administration unveiled last week, the big mortgage lenders (e.g., Countrywide Financial) would allow borrowers who can’t afford higher payments to keep paying the “teaser” rate a little longer. Responsible borrowers who used the savings from their low-rate period to invest in education, or who went back to work after raising a child, get nothing out of the proposal. It primarily benefits those who imprudently took out mortgages they knew they could not afford unless housing prices continued to rise. How can the market discourage such behavior when the federal government encourages it?

If this moral hazard were the only consequence of the proposed bailout, it would be reason enough for opposition. But the bailout would also hurt renters who hoped that the current dip in housing prices would give them an opportunity to buy. They responsibly waited and saved for such an opportunity, even as others rushed headlong into mortgages they now find themselves unable to pay back. If the president’s bailout succeeds in bolstering home prices, it will punish prudence and reward recklessness.

* * *

Defenders of the administration’s plan argue that it would be worse for investors if the mortgage banks were forced to foreclose on thousands of borrowers. But that is beside the point. If it is in investors’ interest to allow mortgage banks more flexibility to renegotiate the terms of certain mortgages, there is nothing stopping them from working out a solution on their own.

What we don’t need is for the federal government to pressure everyone into a one-size-fits-all approach — especially one that rewards irresponsible lending and borrowing, makes idiots of prudent borrowers, and punishes renters for whom a dip in home prices is a big opportunity. Americans who believe in personal responsibility and oppose big-government bailouts need someone to speak for them. Why not a Republican running for president?

/snip

[alexandria]

1. I read the article and cannot figure out what you are saying.

Could you explain it to me? I have never read the NRO but it seems to make sense..