Yesterday, U.S. Treasury Secretary Hank Paulson, former chief over at Goldman Sachs, appeared in Stockton yesterday to talk about the challenges facing many who took out subprime loans.
The question you have to ask Secretary Paulson is whether he plans on playing the part of the Grinch, stealing Christmas from all of those who did not decide to engage in riskly loan taking. Because that seems to be what he and other advocates of taxpayer support/bailouts of those adults to decided to take out sub prime loans for whom that decision is not working out.
Government intervention into the mortgage lending marketplace will result in two things. The first is that it will artificially keep home prices higher, keeping a whole group of non-risk takers who have been waiting for the market to come down from being able to buy or upgrade their homes. The second is that it will try up the availabity of many to get credit to buy a home.
The reality is that America was built on risk, and government should not take risk away. Risk means that you can take a chance to create a better place in life for yourself. If you succeed, then you are living the American dream! But if it doesn’t work out, then, well, failure also has a very important place in our American culture. It’s just the way it is. If you want a country where you cannot take risks, then you should look to places like Cuba where the government provides most things for you, and mobility on the social ladder is non-existant.
George Will penned an outstanding column on this week on this topic, in which he concludes:
I read in the Sacramento Bee a few days ago that half of Californians are concerned that the housing crisis is going to effect them. Well, guess what? My persuing public policies that mettle with the free market, Paulson and others will target aiding a few homeowners at the expense of everyone else.
We don’t need a Grinch stealing everyone’s Christmas!