White House to bailout underwater mortgages?
Today’s hot rumor comes from James Pethokoukis: essentially, the White House (which is becoming increasingly frantic about the way that their Super Magical Unicorn Genius economic plans aren’t working) is scheming to partially bail out people with underwater mortgages. I know, I know: the government was not supposed to acquire Fannie/Freddie just to completely rewrite their balance sheets, but the existing scheme to let the mortgage industry gradually repair itself was apparently… a Super Magical Unicorn Genius economic plan. This new plan won’t do a thing for F/F’s value as companies, but then this wouldn’t be an economic strategy. It’s pretty blatantly a political one.
The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
You know, I happen to have an underwater mortgage: we bought our house at exactly the wrong moment in time. Do you know what we’re doing about it? WE’RE MAKING OUR MORTGAGE PAYMENTS, that’s what we’re doing about it. Because we sat down and worked out how much we could afford to spend beforehand, then we stuck to that number like glue. In other words, I don’t need a handout to pay my bills, and I really don’t need to spend another insanely large sum of money (Hot Air thinks that it could reach 100 billion, which is a large sum of money, even today) that my kids are just going to have to repay later, after the President retires to the global cocktail circuit. And I know that people are going to argue that the majority of Americans can be short-termed bribed in this fashion, but you know something? I don’t think it’ll work. Particularly when it comes to people who have kids.
At some point the Democrats are going to have to accept the fact that you cannot finesse your way out of some situations, and that this is one of those times. Yes, it is going to be incredibly painful for long-term, still-serving federal politicians who can be linked to the crisis. Yes, thanks to 2006 and 2008 that’s going to disproportionately hurt Democrats. Yes, Republican and conservative operatives like myself will (deservedly) mock their pain for it.
Welcome to reality.
Crossposted to Moe Lane.