How a Misunderestimated President Saved a Broken Mortgage Market

Posted: Dec 06, 2007 5:36 PM
How a Misunderestimated President Saved a Broken Mortgage Market

I just got off a conference call with the White House, and I’m very happy. Last August, I published an article here on Townhall called “A Presidential Moment” in which I said that Fed rate cuts, though a step in the right direction, would not be enough to fix our dysfunctional credit markets. Government regulation and Greenspan’s Fed mismanagement had done too much damage and the president was going to have to lead. I didn’t want him to bail anybody out, or tear up people’s mortgage contracts; I just wanted him to get the right private sector leaders in the same room where they could hash out a plan. When the plan, was finished, I wanted the president to use his bully pulpit to tell the world – borrowers, lenders, investors and citizens – what the plan was.

That’s what President Bush did today, and I’m glad. Sure, lefties will say it doesn’t go far enough. After all, nothing gets accomplished in their eyes unless a CEO does a perp walk. The root-canal-right will say that helping people to renegotiate with their bank will deprive them of the character-building benefits of foreclosure. But the market applauded today, which means that my clients who are invested in the American stock market applauded. It means that the Bowyers, who bought homebuilder stocks when the financial media was in full-blown chicken-little mode, applauded. Most of all it means that about a million people who were going to spend the holidays staring down the barrel of eviction have a fighting chance. And all of this without tax dollars.

If you don’t believe me, just click on the comments section of this article (it’s up there, next to the title), and you’ll see it. People are angry. They’ll ignore the actual facts of the case. They’ll get it into their heads that this is taxpayer money, even though it is not. They’ll complain that it’s not fair to help the people who made bad decisions when upright people like the angry ankle-biters were living right. But helping someone who is in a bad spot doesn’t inherently hurt somebody who is in a good place. In fact, on balance it helps everybody. Evictions hurt whole neighborhoods, not just the displaced family. Besides that, isn’t it obvious that credit market disruptions are hurting us all? Do you really want this to continue just so you can punish someone who got in over his head mortgage-wise?

The president did what presidents do. He acted within the power of his office to help people in need without coercion and without picking the pocket of the rest of it. Well done, sir.