So, Bush, as he has on many occasions, is now looking to throw the weight of his governmental power around to appear like the good guy in the recently announced mortgage aid plan. The plan—put together by the cabinet’s Paulson and Jackson—would freeze adjustable mortgage rates for five years and also develop a “superfund” that would buy up distressed mortgage securities. Call me a cynic, but this really reminds me of the scene in “It’s a Wonderful Life” where Potter started buying up all the panicking Savings and Loan customers’ positions.
Oh, people will see this as a good thing—Bush is helping out all those poor people who can’t afford their homes after they overextended themselves and bought $500,000 homes on a negative amortization loan in the outskirts of Phoenix and Houston and Orange County on a $20,000 income because they just knew the market was going to skyrocket and they were going to be filthy rich. So everyone’s freaking out and there’s a run on the market and Mr. Henry Potter Bush is waiting in the shadows, ready to pounce on the new homeless.
What does this do? It makes it clear to people that if they make a silly investment that the government will be there to pick up the pieces—as long as enough people do it. But keep in mind, you have to do the silly investment for speculation and because everyone else is doing it—hence the July 2005 cutoff for loan protection. Why don’t they go back further—why not freeze all adjustable mortgages? Because companies won’t want to do business in climates like that for very long.
I just hope people see this as what it is—a sneaky way to increase socialism and decrease responsibility (and eventually freedom) in this country. Maybe we need to take the lead from good old George Bailey and give the Potters of today the figurative finger.