Counterpoint

In Bankruptcy, not bailout, is the right answer, Miron makes a point that has worried me about this bail-out: If it's the good-faith best guess estimate that the junk loans should be buyable for 25 cents on the dollar, rest assured that the government will be lobbied strenuously on a whole raft of reasons (jobs, the children, etc.) why it should to pay 75 cents instead. Or 90 cents. Once that happens, this $700 billion will turn out to be merely Round One, especially as Democrats turn the focus to making sure that people are allowed to keep the homes they couldn't afford. They are the hapless victims of predatory lenders, you see, so it's only fair and compassionate. This will come at high cost to the rest of us, and it will badly and permanently distort the housing market. And, naturally, the bills to fund every new round of new government will be larded up and bloated with God knows what else. The likely context, remember, is Democrats in control of the Presidency and both houses of Congress, so the floodgates will be open.

This would not be socialism creeping in through a crack, it would be socialism breaking down the door. Yes, home ownership is associated with improved neighborhoods, but that's because the sort of people who normally can qualify to buy a home tend to be more responsible in all ways. By eliminating that correlation, we will create high-turnover neighborhoods where homes are occupied by owners who are constantly behind in their mortgage payments, and who cannot or will not spend for the upkeep it requires to maintain a home.

We will have engineered a new social phenomenon: crime-ridden, derelict slums of owner-occupied dwellings. Congratulations all around. These areas would have the potential to be even worse than public housing, if such a thing can be imagined, because private property rights will make intervention by authorities more problematic. Neighborhoods like this will be bottomless pits for taxpayer money, a prospect that I'm sure has "community organizers" chomping at the bit. In honor, they might be known as Sharptontowns. And their occupants across the USA collectively known as the Obamanation. Another solid Democrat voting block arises. It's all good.

Byron