Thus writes Kyle Smith in The end of responsibility
The latest in a string of doozies since Obama took office involves the rumor that Freddie and Fannie will be directed to reduce the balances of mortgages that are deemed to be “underwater”. Smith:
That’s right. If you bet badly in the housing-market casino of the Aughties, the government is thinking of refunding some of your chips so you can play again. You may have heard something about a sub-prime real-estate bubble that popped and nearly took down the financial system with it? President Obama wants to double down.
Unlike most rumors, this one became more, not less, plausible when you examine the details. The White House has made it clear in recent months that it is frustrated by what the Framers called “the legislative branch,” what President Obama calls “politics” and what I call “the wishes of the American people.”
Obama craves a short-term sugar rush for the economy. If he feels cornered, betrayed and alone, he could use his new ownership of Fannie Mae and Freddie Mac as a free federal candy store and tell America to line up and pig out.
Rewarding subprime borrowers would be characteristic. In more ways than one, Barack Obama seems to want to be known as the Sub-Prime President.
So, if you are among the millions who didn’t buy more home than you could afford, didn’t fall for creative financing gimmicks aimed at setting monthly payments artificially low, and despite these hard times has kept up with your mortgage payments, the administration has a name for you, “Sucker”.
When the principal on a mortgage is crammed down that money doesn’t just disappear-it still has to be paid for. Obama is simply shifting the payment from the homeowner to the taxpayer. Once the plan goes through you will be paying your own mortgage and a portion of your neighbor’s.
Smith likens this to the auto bailout:
When they build the irresponsibility Hall of Fame, there will be a special exhibit on the autoworkers who drove GM and Chrysler into insolvency. The UAW knew it was driving up wages and benefits to unsustainable levels, but it also knew that the Democratic Party had its back. Ordinary bankruptcy would have voided its contracts. Instead, GM endured an Obama-customized restructuring that punished its lenders and left the UAW almost untouched. The UAW did suffer the gross insult of its workers being forced to report to duty on the Monday after Easter — in 2011. In 2012, they go back to getting Easter Monday as a paid holiday. Post-restructuring, their pay and benefits are still around $50 an hour.
Like a lung-cancer survivor waking up from surgery and whispering, “Bring me Marlboros,” the UAW is already hinting that it expects to be rewarded with a nice bump after its contract expires next year, and Obama has told the workers he is excited by the prospect.
Unlike the bank bailouts, the Detroit aid (which is costing 30 times the value of the 1979 lifeline to Chrysler) has no chance of breaking even, Gregg Easterbrook wrote on Reuters. To do that, stock in the new GM would have to rise to the old company’s all-time peak valuation. You’ll see George Clooney driving a Yugo before that happens. Moreover, included in the GM bailout was a gift to GM’s finance arm — a subprime lender.
Yep, Obama is faithful adherent to the “There’s a sucker born every minute” school of thought. We, the ever responsible taxpayers were put on this earth to finance whims of our better, Mr. Obama. And should we dare to complain about the burden we are being asked to bear and pass on to our children, we are quickly reminded that we are racists. Discussion over.
So, pay up Sucker, and remember, in Obamaland you can never give enough.