I basically said that all the government has done is clarify their own tax/regulatory stance. That’s hardly “giving a value to the paper”.

If I ask a cop “is it legal to do X”, where X is something that will make me money, and he says “yes”, has he given me anything?

As for whether this blog is “moderate”, one of the contributors to this blog is a declared anarchist, I’d be considered on the fence between anarchy and severe minarchy, and the rest of the contributors are anywhere from where I am to being small-government Republicans. At least for myself, I think that if I were arguing about government in the 1780’s, I’d be firmly in the camp as an anti-Federalist, which is exactly where Patrick Henry was.

Nope, if you’ve read my previous comments you’d have realized that you and I are in agreement about the defaulters having lived above their means. But considering Brad’s link, I’ll retract my comment about the bill being used to help the defaulters (although the rhetoric from Bush implied otherwise). I’m just opposed to any government intervention of this sort in the market, superficial or not, since even the threat of government regulation has adverse and unintended consequences…no matter who the bill’s really intended to help.

You seem to fall for that age old fallacy that the consumer benifits from socialist schemes. If nothingelse, these set of consumers got to live in a house well beyond their means for period of time. They have already had their payoff.

Thank you for coming clean and acknowledging that the gubmint’s plan is not for the failed credit risk consumer, but a means of giving a value to the paper the bonds men and loan sharks wrote so they can unload it on the open market.

Modern dupes not withstanding, a brace post.

Still, it’s best to remove Pat Henry’s name from this moderate (being kind) web site.

“In reality, they haven’t done much at all”

But they’ve done enough to affect the market by appearing to interfere. Even empty gestures of intervention or superficial government regulation can have detrimental effects on free markets and influence people’s actions by creating either the perception of regulation or the fear of more stringent regulation being tacked on. You should know that, Brad.

If you get a chance, I recommend you read this post at Calculated Risk.

I’m beginning to think that this was even less of a “bailout” for borrowers than originally suggested.

If that post is accurate, the plan is largely just the regulators offering a way within the current legal and contractual obligations of the lenders and investors to go forward. In reality, they haven’t done much at all, although as most politicians are wont to do, they made it seem like they were sweeping in to save us all.

Actually, I think it’s the defaulters who are using the government to pick peoples’ pockets here, not the loan companies.

Did you read what Brad wrote at all ?

He said that he doesn’t support government involvement in this process. The post was about why some people are so resentful of the very idea that some of these mortgages might be renegotiated voluntarily.

I oppose the Bush plan precisely because it smacks too much of government compulsion. However, if Countrywide, Wells Fargo, Citibank and the other lenders want to renegotiate with their borrowers to avoid foreclosure (and no bank wants their loans to go into foreclosure in a declining real estate market), then that’s their perogotive.

But what happens instead? They use the government to pick pockets.

For goodness sake, please remove Pat Henry’s name from this web site.

Ahh I see. You’re just objecting to the contempt or desire for a wild spectacle in the mortgage business.

I’m not driven by emotion in saying that I think those stretched too thin by a ridiculous mortgage have to deal with the pain. It’s a little uncaring, but a little bit of tough love and a little bit of charity to help them regain their feet is what is in order. We don’t need the government to prop up an untenable economic position in an effort to delay the consequences five more years.

I think what most of the people you quoted earlier would prefer to see is for people to be held accountable for their actions. That’s what I was saying. If that means the lender renegotiates so they can recoup their investment, I’m perfectly fine with that because it’s the best possible result for the party that honored their end of the contract (the lender). If that means the defaulter gets chucked out on the street, I’m perfectly fine with that too, again because it’s helping out the party that honored their end of the contract. My hostility was directed at the mindset that the defaulters somehow deserve a break simply because they were stupid enough to enter into a contract that they couldn’t honor…which they don’t. If that comes off as heartless or cruel, it’s only because I’ve worked jobs where I’ve represented the lenders before and I’ve seen the damage it does to businesses when people who default on their obligations are shielded or protected from the consequences of their actions by outside parties. I have sympathy…just not for the people who skip out on their debts.

I’m not saying blame should be spread equally. However, there’s plenty of blame to go around, and the lenders deserve some of it.

I’m also not saying these lenders should be forced into anything. I think it is their own choice, as the party with legal rights to the house, whether they try to renegotiate or foreclose.

What I take issue with is the inherent desire to see the borrowers get punished. It seems to me that people would rather see people tossed from their homes than given the chance to work things out.

It’s the attitude that bothers me more than anything.

I have no disagreement with the argument that the government should not have gotten involved.

I agree that the risks the lenders took were too high, and the market has penalized most of them to varying degrees for taking those risks. But again, my point is that they still deserve the better result than the defaulter because the lender chose to live up to their contract. What the government’s doing flies in the face of that…rewarding the defaulters for skipping out on their obligations while punishing the lenders for honoring theirs. That’s why, I believe, the response that Brad took issue with towards the defaulters was so hostile.