Government Intervention Run Amuck No. 14: Barney Frank
[Thanks to Funnydog.net for the photo.]
Today's Wall Street Journal editorial on the Legislature's latest effort to intervene in the housing markets reveals just how far the nation has progressed towards interventionnism.
I hope Bush has the sense and courage to veto this one.
Here are a few citations of the terms of Mr. Frank's proposed new laws:
"If both borrower and lender agree to participate, lenders can accept 85% of the current appraised mortgage value and in return get to dump up to $300 billion of those loans on the Federal Housing Administration (FHA)." [And who pays the bill for that? Why, you and I, of course.]
"'If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.' And they called Tom DeLay 'the Hammer'?" [I guess blackmail is the new Congressional tool.]
"State governments receive authority to issue $10 billion in tax-exempt bonds to subsidize home purchases and to help subprime borrowers refinance." [Sure. Give 'em some more money so that they can keep that house they can't pay for.]
"Mr. Frank also expands the low-income housing tax credit, and he creates a new refundable credit for certain home buyers. To help defray the cost to the Treasury, Mr. Frank raises taxes on multinational companies by delaying a scheduled reform." [Talk about robbing Peter...]
"Then there is the $230 million for housing counseling to be distributed by the Neighborhood Reinvestment Corporation." [Housing counseling??]
"Also included is this addition to the Home Owners' Loan Act: 'A Federal savings association may make investments, directly or indirectly, each of which is designed primarily to promote the public welfare . . . through the provision of housing, services, and jobs.' Mr. Frank has got to be kidding." [No surprise to me. We're back to trying to confuse the public about what that phrase in the Constitution, "public welfare," really means. Good grief.]
And then this conclusion by the WSJ staff:
"The Frank plan appears to take care of everyone in the housing market, except the renters and homeowners who lived within their means."
I can't decide whether we should be thankful or not about the fact that most of these efforts will fail. Unfortunately, we taxpayers will end up holding the stick either way.
Update: Maxine Waters is going to take Second Prize for Mucky Intervention, for her new bill, which would give money to states so they can buy foreclosed homes.