December 21st, 2008
Hugh Hewitt isn’t happy with the Obama bailout program. Instead, Hewitt wants to see a giant housing bailout that includes:
Fund 4%, 40 year mortgages for people making less than $100k.
Buy up foreclosed properties and turn them into quasi-public housing via transfer to not-for-profits like Habitat for Humanity that qualify tenants/owners on the basis of long experience with the working poor.
Aggressively purchase at fair market value property deemed crucial to species protection to both conserve the property and release the value of it into productive enterprise while honoring the 5th Amendment.
Oh yes, by all means. Let’s punish good credit-risk buyers by pushing a ton of people into the marketplace who can bid on property they can’t really afford because the government is giving them a 4 percent sweetheart mortgage.
You will perhaps remember that the recently-popped bubble was caused in part by lending which pushed lots of people who couldn’t really afford mortgages into the market, thus driving up prices for everyone else. In 2000, if you could reasonably afford, say, a 2,000 square foot home, by 2005 you could only reasonably afford a much smaller home because bad-credit risks (along with speculators and other factors, of course) had entered the market and bid prices up to (obviously) unsustainable levels. So your choice was to buy a crappier house and live within your means, sit out of the market betting that there would be a readjustment, or say, “What the hell” and get in over your head like everyone else.
The only saving grace to responsible people was the prospect that the bubble’s unsustainability would eventually punish the risky and create lower prices you could, someday, take advantage of. Hewitt’s “plan” would simply push more underqualified buyers into the market by giving them an advantage that responsible, qualified buyers won’t get because they’re responsible and qualified. In other words, after being punished for being responsible once, they’d be punished for being responsible again.
To top it all off, Hewitt wants to buy up foreclosed properties and turn them into public housing. That’s right. Keep punishing the responsible people who have been able to hold onto their properties by creating public housing in the middle of their neighborhoods where none existed before. And just what do you think turning the mass of foreclosures into public housing would do to the long-term property values of suburban and exurban neighborhoods? My guess: Cripple them for a generation. Or more.
Maybe Hewitt was just being ironic and I’m just missing the joke. If not, then with conservatism like this why worry about Obamanomics?
No comments yet, be the first:
