Sunday, December 21, 2008

The New, New, New, New, New Bailout

Hugh Hewitt isn't happy with the Obama bailout program. Instead, Hewitt wants to see a giant housing bailout that includes:

Fund 4%, 40 year mortgages for people making less than $100k.

Buy up foreclosed properties and turn them into quasi-public housing via transfer to not-for-profits like Habitat for Humanity that qualify tenants/owners on the basis of long experience with the working poor.

Aggressively purchase at fair market value property deemed crucial to species protection to both conserve the property and release the value of it into productive enterprise while honoring the 5th Amendment.

Oh yes, by all means. Let's punish good credit-risk buyers by pushing a ton of people into the marketplace who can bid on property they can't really afford because the government is giving them a 4 percent sweetheart mortgage.

You will perhaps remember that the recently-popped bubble was caused in part by lending which pushed lots of people who couldn't really afford mortgages into the market, thus driving up prices for everyone else. In 2000, if you could reasonably afford, say, a 2,000 square foot home, by 2005 you could only reasonably afford a much smaller home because bad-credit risks (along with speculators and other factors, of course) had entered the market and bid prices up to (obviously) unsustainable levels. So your choice was to buy a crappier house and live within your means, sit out of the market betting that there would be a readjustment, or say, "What the hell" and get in over your head like everyone else.

The only saving grace to responsible people was the prospect that the bubble's unsustainability would eventually punish the risky and create lower prices you could, someday, take advantage of. Hewitt's "plan" would simply push more underqualified buyers into the market by giving them an advantage that responsible, qualified buyers won't get because they're responsible and qualified. In other words, after being punished for being responsible once, they'd be punished for being responsible again.

To top it all off, Hewitt wants to buy up foreclosed properties and turn them into public housing. That's right. Keep punishing the responsible people who have been able to hold onto their properties by creating public housing in the middle of their neighborhoods where none existed before. And just what do you think turning the mass of foreclosures into public housing would do to the long-term property values of suburban and exurban neighborhoods? My guess: Cripple them for a generation. Or more.

Maybe Hewitt was just being ironic and I'm just missing the joke. If not, then with conservatism like this why worry about Obamanomics?


Anonymous said...

This seals it. Words cannot express my disgust with, and contempt for, Hugh Hewitt.

The only logical explanation for this is that he intends to be as mindlessly sycophantic toward Obama as he was toward Bush.

What a sad, sick, pathetic little attempt to be a valet de pouvoir.

Anonymous said...


I didn't think it was possible to write something more embarrassing than "Painting the Map Red."

Anonymous said...

My guess is that Harriet Miers is guest blogging. Only a mind possessed of her sophistication could devise so ingenious an argument! Plus, we know Hugh admires her intellect, so ...

Anonymous said...

It should be noted that Larry Lindsey in your own magazine proposed something similar with respect to mortgages (his reason was to free up credit). So Hugh doesn't deserve "TubbyLover69"'s scorn.

Anonymous said...

But Hewitt must be right. He went to Harvard. HARVARD!!!!

Anonymous said...

TubbyLover69 will maintain his contempt, thanks very much.

As it happens, TubbyLover69 doesn't work for the Standard, so it's not "his very own magazine." Furthermore, he's not exactly impressed with Larry "$200 billion invasion" Lindsey, nor with arguments that consist solely of citing an alleged authority.

Anonymous said...

Did it ever occur to you that Hewitt is on the right track, but hasn't gone far enough? I mean, if housing prices are falling too low, why doesn't the government just set new prices?

Problem solved!

Anonymous said...

La propriété, c'est le vol!

Anonymous said...

I dunno. Hugh's plan makes a lot of sense to me.

Anonymous said...

Hewitt can be very entertaining and likeable, but he is an elitist who cares less about conservatism than about staying relevant and close to the action (and dropping big names). On his show, he does not explain or defend conservative principles very well, preferring lawyerly tactics whenever he is challenged. The real deal? Mark Levin.

Anonymous said...

"The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D.

"The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked.

"I call C the Forgotten Man."

Anonymous said...

I have no proof to back this up, but reading a lot of different opinions, the split between pro bailout and anti-bailout is not mostly conservative and liberal, but young and old. If you're 50+, it seems, you're panicking that your plans for retirement are falling down around your ears, and and you are willing to buy into the general argument that 'something has to be done'. If you're under 40, and it intensifies the younger you get, you realize that all these trillions of dollars are essentially transferred from your future to the Boomers' present. And you're going to pay interest.

Anonymous said...

You know what this economy needs? You know what?

A massive, flailing, wildly unpredictable governmental intervention to forestall a long-overdue market correction.

That's it. It's a good deal for everyone. Totally new idea.

But whatever shall we call this New Deal?

Anonymous said...

I don't geht it. I GODDAMN don't geht it. Summabitch. Good idea. Best goddamn idea yeht. That boy, Hewlett, whatever, he is uh GODDAMN jee-nee-yus. Why in tahrnation cantchoo see it?

Anonymous said...

I, for one, cannot wait to hear Mr. Hewitt's plan for having the government collect and keep all privately owned gold.

I mean, swing for the fences, Hugh.

Anonymous said...

I don't understand a lot of the hostility among these comments. Mr. Hewett's plan isn't really all that controversial. Glen Hubbard proposed something very similar in the Journal. I think Brad DeLong seconded the idea, and, as Jeff008 noted, so too did Mr. Lindsey.

There is a major crisis underway in American credit markets. The consequences of a full-blown catastrophe are not at all appealing to contemplate. Credit markets are utterly unique.

They can falter--and fail--overnight. They are among the most heavily regulated markets in the world. And they are uniquely sensitive to monetary policy, which is the exclusive domain of the federal government.

Given the magnitude of the crisis, and given the uniqueness of credit markets, it makes sense to propose a governmental regulation. Mr. Hewett's idea may or may not have merit, but it's a gesture in the right direction.