Fixing The Mortgage Crisis But How - Road to the Middle Class

The mortgage crisis requires legislation that supports punishing existing lenders for poor or misleading businesses practices. Specifically, enforcement must focus on originators and brokers.

But you could look far and wide to find regulators actually cracking down on abusive lenders, he writes.

The government does not need additional regulations — they just need to enforce the existing regulations.

Well, yes. That all sounds fine. And Barney Frank wants to lift the loan limits on Fannie Mae and Freddie Mac.

But let’s step back a bit.

The reason that abusive lenders (and listening to their voices on the mortgage radio ads, you knew you’d heard that guy before—maybe on a used car lot?) were flourishing was that money was sloshing around, and anyone with a pulse could set up a mortgage company and sell mortgages. That’s where the problem started. Tons of money sloshing around looking for a borrower. And of course, when we are talking about money sloshing around we are usually talking about the government.

For instance, there are the government’s mortgage giants, Fannie Mae, Freddie Mac, and Ginny Mae, all in the business of throwing money at housing. When you subsidize things like that you are going to get distortions in the market.

It’s not too surprising that the downmarket end of the business was up to some nasty shenanigans. It usually is. In the downmarket mortgage business the government has been pressuring lenders to lower standards for years.

But why should the politicians complain. When things go wrong it creates splendid opportunities for politicians to posture and to blame other people for things that they initially set in motion.

So the best we can hope for is to get out of the mortgage mess without the politicians really screwing things up.

Give them a chance and they will create a royal mess. Remember the Great Depression?

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

What Liberals Think About Conservatives

[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. “Racist, sexist, homophobic, anti-choice fascists,” she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican

Liberal Coercion

[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State

Moral Imperatives of Modern Culture

These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self

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David Cameron, Conference Speech 2008

Faith and Politics

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Pope Benedict XVI, Speech to European Peoples Party, 2006

Never Trust Experts

No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense.
Lord Salisbury, “Letter to Lord Lytton”

Conservatism's Holy Grail

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Minette Marrin, The Daily Telegraph

Class War

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The Union publishes an exact return of the amount of its taxes; I can get copies of the budgets of the four and twenty component states; but who can tell me what the citizens spend in the administration of county and township?
Alexis de Tocqueville, Democracy in America

Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

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