Wednesday, February 18, 2009

Obama and Mortgages: Central Planners Continue To Choose "Winners" and "Losers" in the Age of Obama

Obama is set to announce his mortgagee "plan" today (Soviet style Five Year Plans anyone--they are coming!!!). The government will evidently pay the mortgage of anyone having trouble paying their mortage, to the extent of all payments beyond 31% of their income (people with no income? Details, details). Thus, this is not only a "bailout" of people with mortgages they cannot pay, but a further bailout of banks.

Can Republicans who supported the original Paulson bank bailouts complain about this? Not with intellectual honesty. Why do banks "deserve" to be bailed out more than homeowners? They don't. In fact, most people-including me--would say they deserve less to be bailed out than the average mortgage holder. (By the way, that reference to "Republicans" and intellectual honesty does not apply to me, since I no longer call myself a Republican and since I opposed all of the bank bailouts.),

The problem here is that unfairness and intellectual dishonesty is inevitable, once you go down this road. Why is the tax money (eventually, even though we are now printing and borrowing the money) of people who fully paid, or are fully paying, their mortgages being used to bail out people who can't pay their mortages? Why are banks, and people who can't pay their mortgages (not to mention automakers) more deserving of being bailed out than my brother's trucking company, or any failing small business? Why are some people worthy of being bailed out while I am not? This last is a general question, but applies to me personally. I have lost major amounts of money in the stock market because of the disastrous government policies (ecnouragement of credit laxness, especially in housing--by both Democrats and Republicans)? Why should my losses not be made good? What about those who lose their job, and do not own a house? they still have to pay rent (or stand in line for government housing, like Henrietta Hughes). The list just goes on and on.

In short, why should the government central planners choose the winners and losers in this society? Why should one person be a "winner" (get a government bailout) and another be a loser (get no government bailout)? There is no valid basis for choosing the winners and losers. It is a matter of who is favored by the central planners now in charge--central planning that is doomed to fail in the end because it is being done by fallible human beings without enough information.

You can see why I am a pessimist here. We will be lucky to survive the Age of Obama, where the Federal Government central planners are supposed to "solve" all of our problems--to "save" us all, except those they choose not to favor with taxpayer money.

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