Saturday, December 22, 2007


I've been watching the ARM/home foreclosure debacle heat up over the last several weeks with tremendous interest. There's much talk of the government apparently taking it upon themselves to unilaterally renegotiate legally binding contracts in favor of the people who willingly agreed to the terms of the original contract, which would destroy any faith in any contracts in the entire country, and would actually end up penalizing people who chose higher-rate mortgages because they found the lowball rate mortgages unrealistic and risky. What lender is going to provide funding if they know that the government can step in any time and change contractual terms of payment? Instead, the government is rewarding people for making bad decisions, punishing those who made wise decisions, and telling business that it will just have to settle for whatever the government thinks is the best arrangement for the financial security of the country.

In other words, the Bush administration is socializing home ownership. And the free-market-worshipping Republicans are apparently going along with this.

Fair enough. However, this course of action should lead to some other ones.

How about the government telling the oil companies that they don't need to make billions of dollars in profits every month? How about telling health-care providers that they should slash their prices so that everybody can afford them?

I'm having a really hard time understanding why it is that our current administration thinks it can meddle in contractually binding business affairs in one part of the economy and not carry that line of reasoning over to others that impact a far broader segment of the population. A segment which, by the way, did not sign contracts that were stupid to begin with for energy and medical care, but who have been swept up in escalating costs that only result in higher profits but not better services.


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