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  • "When Liberalism Doesn't Work It Discredits Liberalism"

    This past Friday the Associated Press reported:

    Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out.

    The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday’s report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.

    Faced with this reality, Media Matters fellow Duncan Black blogged:

    Aside from the fact that I’m not happy with certain outcomes, if you do liberalism badly then people get it in their heads that maybe liberalism is pretty sucky. The economy sucks and HAMP was a complete failure, whether deliberately or not, and that’s what people know.

    Black is right: the Obama administration’s Home Affordable Modification Program has been a complete failure. But the failure is not due to Obama administration incompetence. It is due to the fact that liberal policies simply do not work in practice. As we predicted at the time:

    The prospect that a shrunken mortgage lending system could expeditiously accommodate the 7-9 million borrowers expected by the Obama plan is wishful thinking. The result will be long waits for refinancing that will come too late for some borrowers, and may also crowd out efforts by unsubsidized borrowers to refinance due to the generous financial incentives offered to servicers participating in the new federal program.

    It is far past time for the federal government to stop mucking up the housing market. The government should end the interventions it has made since 2008, starting with abolition of the TARP program. It should then abolish Freddie Mac and Fannie Mae and repeal all U.S. government regulatory measures that interfere with mortgage markets.

    Posted in Economics [slideshow_deploy]

    8 Responses to "When Liberalism Doesn't Work It Discredits Liberalism"

    1. Ben C. Ann Arbor, MI says:

      Let's see – in simple terms the stock market crash of '29 resulted from the failure of citizens to meet their 'margin obligations." The notion of getting something for nothing resulted in the crash and The Great Depression.. Then along comes Barney Frank with Freddie and Fannie encouraging people to buy houses they couldn't afford – getting something for nothing. Next, The Great Recession.

      Doesn't anyone ever read a history book?

    2. Randall Holland, Ari says:

      It's really all about making people dependent on the government. Letting the government control your life from cradle to grave. Letting the government make the important decisions for you. Bailing you out, making you not responsible for your decisions and now unlimited unemployment money.


    3. Don Harper says:

      The reason liberalism can't work in practice is that it appeals to the worst aspects of human nature. The liberal will disagree, pointing out that the redistribution of wealth, in all of its forms, is compassionate because it helps the poor. But I would argue the help is only superficial. What it actually does is help them remain poor. It is not virtuous to deprive people of their initiative and the self-worth that comes from one's own sucess. It is selfish to gain your own feelings of worth by forcing, through the vote, to deprive others of the fruits of their labor so they can be given to someone else. How is this virtuous? Alinsky claimed it was a battle of the Haves vs the Have Nots. It has become a battle of the Cans vs Cannots, the Wills vs the Won'ts.

    4. Dennis Georgia says:

      Buy only what you can afford, then do all possible to pay for it. I did, mine is paid for.

    5. Drew Page, IL says:

      Guys like Jimmy Carter and Bill Clinton thought the Community Reinvestment Act would be just a great idea. The government (that's the 50% of us who actually pay federal income taxes) could give home mortgages to anyone who wanted one, with no money down, often times with no jobs, and regardless of their ability to repay the loans. But think about how popular Jimmy Carter and Bill Clinton were at the polls, giving all those poor folks taxpayer funded mortgage loans that couldn't possibly be paid back.

      And let's not forget Franklin Raines who ran Fannie Mae and made $90 million in bonus over a six year period. The more toxic loans he made, the more bonus money he got. And all of Raines salary and bonuses came from taxpayer money. Gee, Fannie and Freddie needed to be bailed out and are still bleeding red ink. And Franklin Raines? Why isn't this man in jail?

      We can blame Jimmy, or Bill, or Senator Dodd, or Congressman Frank, for buying votes by giving away taxpayer money in the form of "loans" that would never be repaid. We can blame Wall Street brokers who bundled up these worthless mortgages and sold them as securities. We can blame the criminally greedy and/or stupid mutual fund managers who bought them and put them into our 401k portfolios. We can blame the Securities & Exchange Commission and President Bush, whose job it was to oversee that the SEC. We can also blame the State of New York's Department of Insurance for not overseeing that AIG had suffiecient reserves to cover potential losses under the policies they wrote to cover these "securities". All of these people were GAMBLING with taxpayer's money. Many of them enriched themselves by doing it. They all claimed the nobelest intentions of helping ordinary folks realize the American dream of owning their own homes. BALONEY!!!

      Jimmy Carter was naive, and had good intentions, but he was stupid. I'd describe Barney Frank the same way. Bill Clinton was not stupid; he was shrewd. He was buying votes for himself and the Democrats. He wanted to appeal to the poor and minorities and say "Who Loves ya?" What a great guy, with other people's money. Bush was out of touch with what was going on and was asleep at the wheel, pure incompetence. The Wall Street brokers were greedy bastards taking advantage of a political vote buying and presidential malfeasance in office. Same for AIG. All but Jimmy Carter should be jailed for their hand in the financial crisis. For JImmy Carter, I would offer up the same excuse that Rod blagojevich's used "he's too dumb to be guilty".

    6. Renny MD says:

      Sad, Sad, Sad!!! Let's Pray!!!!!! Everything else is failing!!!!!!!

    7. Sandy Olnhausen says:

      We did what Dennis Georgia did; bought affordable and paid for it. Then we had to borrow against it to keep our 25 year small family business afloat!

    8. Chuck Mayo, Californ says:

      Ancient Rome was a Republic which became a Democracy which became a Socialist State which became a Dictatorship which became Nothing.

      End of history lesson.

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