Here’s what Barrack
Obama said January 27, 2008 on “This Week With George
Stephanopoulos” on ABC about the housing crisis:
“We should put forward
a $10 billion fund (that’s TEN BILLION DOLLARS) to focus on helping
families that are in their homes that have been induced into
mortgages that they can’t pay…That will prevent…lenders who have
made bad loans somehow are bailed out.
“It’s important not to
bail out lenders who made poorly considered or speculative loans.
What is important is to make sure that people are staying in their
homes, particularly first time buyers. I think we have to sort
through how we can help those individuals aggressively at the same
time that we are not bailing out banks who have made loans that they
shouldn’t have made.”
In other words, this is
the same old Democrat litany that people should not be responsible
for their actions. These people who signed up to the mortgages did
so of their own free will. But according to Obama, they were
“induced.” According to Obama, it is the banks who made the bad
loans they shouldn’t have made, not the borrowers who accepted bad
loans they shouldn’t have accepted. There was nothing illegal about
the mortgages they signed. They signed them mostly because they
didn’t have to put much, if anything, down. How much they would have
to pay in the future was there in black and white.
But when it comes time
for them to have to pay what they agreed to pay and they are
financially incapable of doing so (something they undoubtedly knew
would occur), Obama blames the lenders, not the people who were
trying to get something for nothing.
Like most Democrats, he
flips the issue. It’s not the borrowers who signed up to loans they
knew they couldn’t fulfill. No, according to Obama, it’s the lenders
who made loans they shouldn’t have made! This is socialism at its
worst. These were deals that both parties entered into at arm’s
length. The borrowers were arguably represented by real estate
agents, sometimes by attorneys. They knew exactly what they were
getting into. They knew what they could afford. They knew what their
future held better than the lender. They jumped at the deal because
it allowed them to live in houses that were beyond their means.
Further, the obligation down the road was clearly spelled out
in black and white. They knew that eventually they would have to pay
the piper. Nobody held a gun to their heads forcing them to agree to
the loan. But according to Obama, it was all the lenders’ fault.
Now he wants to not
only protect the foolish buyers, he wants not only to punish the
lenders who made honest loans, he wants not only to reward the
greedy people who signed up for the loans, but, worse, he wants the
taxpayers, like you and me, neither of whom signed a foolish
mortgage, to pay for the people who did.
Our economy will
survive only if it comports to the free market principle and Caveat
Emptor, which states that the
buyer alone is responsible for assessing the quality of a purchase
before buying, and that applies to someone signing up to a
loan. If the buyer enters into a
bad deal, the buyer must live with it. We can’t survive if we force
the taxpayers who didn’t enter into bad deals come to the rescue of
those who did. I hope that in one of the debates to come, somebody
asks Obama if he agrees with the doctrine of Caveat Emptor.