Let's Have A Free Market For Housing And Religion (Mark Steyn On Capitalism And Freedom)

The sub prime mortgage was a government created problem.

Congress critters insisting that there was discrimination on the part of banks against lending money for housing to sub-prime buyers. With big government breathing down their necks, the banks found ways to lend money to them.

We’re paying the price now.

For someone to promote compulsory theft of someone else's wealth in order to benefit someone else is a complete and radical perversion of Christianity.

Exactly right! The duty of Christians is to give of themselves, not to take from others.

well said!

Your interpretation of the bible may be correct, but priests and ministers of different branches of Christianity promote forced charity via big government. Popes John and Benedict have implicitedly condemned capitalism as have bishops of other branches of Christianity. A number of years ago I wrote a letters to members of the US hierarchy of the Catholic church after they issued statements critical of US economic policies stating they should keep their noses out of economic matters unless they willing to subject their theologic matters to politics.

“I like Mark Steyn, but wasn’t the bail out just an agreement between the administration and the big lenders, to freeze the rates of certain sub-prime arms? According to Dave Ramsey, this effects less than 1% of the sub primes that are over 30 days and no tax dollars are involved. If that’s correct, I’m not sure I understand where Mark’s coming from. I am prepared to be corrected though.” ~ TheRake

Try this:

The Not Paulson Bailout
December 6, 2007; WSJ - Page A18

The next time we suggest that the government give advice to the private sector, tie us down until the fever passes. A couple months ago, we endorsed the idea of mortgage service companies voluntarily negotiating with subprime borrowers and investors to avoid a wave of defaults next year. Now come the politicians to wrap their arms around the idea, and maybe give the U.S. a reputation for forcibly rewriting financial contracts. Don’t cry for us, Argentina?

Both Treasury Secretary Hank Paulson and the White House are touting a plan to freeze interest payments on up to two million troubled mortgages. Except we’re told that this isn’t “the Paulson plan.” Treasury says its only role has been as a facilitator to get everyone in the room, and that the terms are being worked out by the private parties.

We wonder what these parties really think. Offering free advice is one thing. But when the feds sit down as a negotiating partner, the line between moral suasion and coercion starts to blur. Companies begin to think they’re hearing an offer they can’t refuse. So perhaps we should call it the Not Paulson bailout.

It’s not as if banks, investors and mortgage servicers don’t have incentive to avoid foreclosures on their own. Investors typically lose 30% to 50% of the unpaid mortgage balance when a home has to be resold due to foreclosure. So they have every incentive to renegotiate subprime loans that are expected to become delinquent. And that process is already well under way.

Treasury sources say that wasn’t good enough because this process is costly and complicated without uniform standards. So they had to get everyone in the room and “facilitate.” No doubt that’s true, but then contracts aren’t supposed to be rewritten on a whim. They take two to untangle.

The U.S. economic and legal systems are built on the sanctity of contract, and even the hint that government is compelling investors who now own these mortgages (the banks having sold them as bundled securities) to take less money puts the U.S. on a very dangerous road. At a minimum, it will raise the future risk premium that investors will demand for investing in U.S. real estate, which means it will be costlier to get a mortgage in the future.

Now, some of our friends claim that freezing interest rates in this way doesn’t violate mortgage contracts. When securitizers purchase loans, the Pooling and Servicing Agreements normally assign servicers a fiduciary duty to maximize cash-flows for the investors. In some cases, servicers can modify loan terms if this is consistent with “standard industry practice.” This plan establishes a new “standard industry practice.” We trust everyone is prepared to fight that out in court, maybe for years to come, because the lawsuits are going to test that “standard” practice claim.

The Not Paulson plan has other defects. Which borrowers will qualify for the lower interest rate payments? Almost all subprime borrowers will argue that they should benefit from loan forgiveness, especially if they’ve been responsible and sacrificed to make their payments. The problem with imposing uniform loan forgiveness is that you quickly get universal take-up rates.

Moreover, the evidence suggests that even when troubled borrowers receive a generous reset on their mortgage payments, as many of 40% of those borrowers still eventually default. The refinancing plan might only delay the day of reckoning and lead to bigger losses in a falling market. An analysis by the financial services consulting firm Graham Fisher calls this “the rolling loan gathers no loss” philosophy, and notes its similarity to the strategy that prolonged the “S&L crisis and the Japanese banking crisis.”

By the way, another part of Mr. Paulson’s nonplan would allow states to float more tax-exempt bonds to refinance subprime borrowers. State housing authorities can now float tax-exempts to help first-time home buyers, but Treasury wants to let them float bonds to refinance loans or pay closing costs as well. This is clearly a taxpayer-financed bailout.

Many in the Bush Administration and mortgage industry privately agree that this is dubious policy, but they plead that it’s better than the alternatives being offered on Capitol Hill. These include “antipredatory lending” laws and new bankruptcy provisions that are punitive and would delay any recovery in the mortgage market. Right on time, Hillary Clinton weighed in with the truly awful idea of freezing subprime mortgage rates for five years — presumably, through the end of her re-election campaign in 2012. She’d combine price controls and contract repudiation — an Argentina double.

Rather than cave to these impulses, however, the Bush Administration would be better off politically opposing anything that smacks of a “bailout.” A Public Opinion Strategy polls find that 62% of Americans oppose a mortgage bailout. More than 95% of homeowners are making their payments on time, and they believe it is unfair to pay more in taxes to assist those who’ve been less responsible. They’re right.

“o a great extent Christian theology promotes and embraces programs resulting in big and invasive government, e.g. government health care, aid to children, etc.” ~ monocle

The Eighth Commandment of Nihilism: What’s Yours is Mine

[snip]

“...There are many “social justice” or “liberation theology” Christians who maintain that Jesus was a sort of proto-communist, what with his counsel to give to the poor. But there is a big difference between voluntary renunciation of one’s wealth and government seizure and redistribution of one’s wealth. Just as one must first be a man before becoming a gentleman, one must first have sovereignty over one’s property before giving it away. And as a matter of fact, statistics demonstrate that there is an inverse relationship between high taxes and charitable giving. Those states with the lowest taxes give the most, while those with the highest taxes— “liberal” places such as Massachusetts — give the least. ...”

More: http://onecosmos.blogspot.com/2007/04/eighth-commandment-of-nihilism-whats.html

In a sense relying on government to provide charity is voluntary in that members of government are freely elected. People are quite receptive to have government assume their responsibilities both secular and parochial.

thank you...tho’ Jesus taking a fish in the market and distributing thousands of fish to the multitudes of starving may be viewed by socialists as their ‘ticket to ride’! Again I’m a firm believer in individual choice and 100% anti-transfer of wealth by government mandate. Life is full of choices and the earlier one learns to ‘choose wisely’ the better one’s own lifestyle becomes. A generous government helps educate its citizenry in ‘scientific method’, ‘economic evaluation’, and other ‘tools of selection’ or else natural selection will rule! (ie, the biggest crooks get the best deals).

"In a sense relying on government to provide charity is voluntary in that members of government are freely elected. People are quite receptive to have government assume their responsibilities both secular and parochial."

No one may legitimately call himself a mature "Christian" while voting to steal resources from a neighbor who doesn't want to share in any of the spoils from their theft, but whom they refuse to allow to opt out of them.

"...As it evolved, the Republican party came to represent masculine virtues such as competition, maintaining strict rules (“law and order”), standards over compassion (i.e., not changing the rules for members of liberal victim groups), delayed gratification, and respect for the ways of the father--that is, conserving what had been handed down by previous generations of fathers, and not just assuming in our adolescent hubris that we know better than they. .. The Democratic party, on the other hand, came to represent the realm of maternal nurturance--compassion over standards (i.e., racial quotas), idealization of the impulses (just as a mother is delighted in the instinctual play of her child), mercy over judgment (reduced prison sentences, criminal rights, etc.), cradle-to-grave welfare, a belief that we can seduce our enemies and do not have to defeat them with manly violence, and the notion that meaning, truth and values are all arbitrary and subject to change (which is true of the fluid world of emotions in general). ..." Friday, January 27, 2006 The Pathetic Last Children of Nietzsche's Pitiable Last Men. (The Last Men in the title is in reference to this post from last week. Friday, January 20, 2006 Pornographic Liberalism and The Last Men )

You are right, of course. It is Macleans that is being sued, not the author. The Arabs have used the same tactic in suing, inter alia, Cambridge U. Press for the book Alms for Jihad, and Blackwell Publishing for an article written in Africa Confidential. The aim is to scare the deep pocket publishers. Publishers have the money and can be frightened; most writers are broke and aren’t easily intimidated.

It’s not my interpretation of the Bible; it’s what the text says! I know that many mainstream churches have gone far from Biblical Christianity and into secular socialism. I once visited a Methodist church where the young female preacher told the congregation to vote for candidates and programs which helped the poor. I never went back there, because I knew that for a Christian to help people in need is supposed to be an individual, uncoerced act, or perhaps one performed collectively through the Church. It is not something to be delegated to the government. The whole Christian worldview is based on the idea that God wants love, and wants us to love our fellows, and love can never be coerced. There are innumerable private and religious charities which Christians can choose from; there is no need for govt. charity at all if the Church does its job in the world, and if govt. quit taking money for non-Constitutional “services,” the private sector would have much more money to use.

BFLR!