Of Course, the Media Is Freaking Out Over Trump's Military Parade, But They're...
The Pulitzer Prize Was Just Awarded to a Publication That Pushed a Fake...
How Barstool's Dave Portnoy Handled This Ambush by a Local News Outlet
All This WaPo Reporter Did Was Show She Doesn't Know the Difference Between...
This Headline Sort of Guts The Washington Post's Pulitzer Win for Covering the...
If There's Anyone That Deserves a Military Parade, It's Donald J. Trump
Can We Pay Liberals to Leave Too?
Young Trumpian Conservatives Are Like the Young Reagan Conservatives of Yesterday
Price Controls for Medicine Have a Devastating Cost
'Trump Knows…' Eclipses the Iconic Bo Jackson Commercial 'Bo Knows…'
Can the West Win Wars Again?
Securing Digital Dignity: A New Line of Defense for Americans
Ignore the Elites — President Trump’s Housing Plan Is Working
From the Gridiron to the Rose Garden — America’s Comeback Starts Here
Small Businesses Aren’t Hiring - Because Big Cronyism Is Eliminating Them
OPINION

Obama’s Housing Speech: The Good, The Bad, & The Ugly

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

Yesterday, President Obama went to what was perhaps ground-zero of the housing crisis: Phoenix. He laid out his vision for the role of housing in building a middle class, as well as his solutions for avoiding bubbles.    

On the rhetorical side, the president certainly laid out some principles that anyone would be hard-pressed to disagree with. For instance, he characterized the business mode of Fannie Mae and Freddie Mac as “heads we win, tails you lose”–which of course it was. The president was correct in calling it “wrong.”  If only then-Senator Obama had aided the efforts to reform Fannie and Freddie by Senator Richard Shelby and others, perhaps this mess could have been avoided. But, hey–better late than never.  

The president is also correct in highlighting the issue of local barriers that increase the cost of housing. Both Cato’s Randy O’Toole and I have written regularly on this topic. You don’t get bubbles without supply constraints. But then every president since Reagan, at least, has pointed to this problem and yet it has only gotten worse. If the president has a substantial plan to bring down regulatory barriers in places like California, then I would love to see it.

Perhaps most importantly, the president recognized that what we had was a housing bubble, and the solution isn’t to “just re-inflate” it. As the president urged, we must “turn the page on the bubble-and-bust mentality” behind the housing crisis. That was the good, and again I applaud the president for recognizing those facts.  

Unfortunately, what details we have of his vision are not exactly consistent with these facts–which are bad and ugly. The president wants “no more leaving taxpayers on the hook for irresponsibility or bad decisions,” but then he implies that government should continue to stand behind risk in the housing market. The primary purpose of FHA, which the president commends, is to allow lenders to pass along the costs of their mistakes to the taxpayer.  

Mr. President, there is only one way to take the taxpayer off the hook:  get the government out of the mortgage market.  Anything short of that will continue to undermine the incentive for lenders to make responsible loans.  

Advertisement


Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos

Advertisement
Advertisement
Advertisement