Because the last time the social engineers did this..

The “This” referenced above is the horribly stupid idea that social engineering leftards can use the power of government to force lenders to make loans to high risk people, and that that will have no repercussions. What could go wrong this time? Lets take a look at the article.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

As I pointed out when Dodd & Franks produced a 2000 page abomination, one that did absolutely nothing to prevent the fundamental underlying problem of the economic depression we now have been languishing in for over 5 years, back when: it is a question of how soon we see a repeat. The social engineers are not giving up on their wealth redistribution schemes, no matter how many times they fail and how much it costs the tax payers. After all, look how easy it was for them to blame the banks, the evil rich, and of course Darth Boosh, and how many people actually believed them.

No amount of wishful thinking by leftards, and definitely no amount of coercion and/or cajoling, will bend the laws of economics and human nature. But the social engineering collectivists refuse to give up on the government planning. Maybe they need a quick lesson of how well the Gosplans efforts worked for the USSR. These things will always, yes, I said always, fail. This attempt by team Blue will be no exception. And we will pay for it.

So now team Obama is picking up right where we left off with the last recession, and telling lending institutions to start farming out high risk loans again. The difference this time is that we have a horrible economy, so the risk is even higher. When most, if not all, of these lending institutions don’t or pretend to comply, I expect government to take the stick to them. Hard.

They will again have to make assurances that tax payer bailouts will save the lenders, and on top of that they will have to put together another scheme to make these high risk loans palatable. When results turn out the same as before, the progressive socio-engineers will be befuddled. How could it have gone wrong? We have a 2000 page monster document that this time will make sure nothing can go wrong. My money is on an even more damaging and costly economic implosion, and then, in a fraction of the time it took the last one to happen. A decade at the most.

Anyway, this last thing about the WaPo article really ticked me off.

“If you were going to tell people in low-income and moderate-income communities and communities of color there was a housing recovery, they would look at you as if you had two heads,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit housing organization. “It is very difficult for people of low and moderate incomes to refinance or buy homes.”

Really? So the laws of economics coming back into focus and being followed now is anti-middle class and racist? Fuck progressives are stupid people. We deserve the economic meltdown these people are working so hard to straddle us with. And when it fails they will blame everyone but themselves and the idiotic shit they believe in. Wealth redistribution is the most evil idea to ever fuck over humanity in general. These people are going to give us the next dark age.

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  1. Seattle Outcast

    The only times banks are foolish with money is when some idiot is backing the loans, which means the government with our tax dollars. Left to their devices, loaning organizations do a very good job of identifying risk levels associated with getting paid back.

    There is a reason money isn’t available to “young people” looking to buy their first home, or people who’s credit has been damaged: they have a high risk of financial instability and not paying the money back. All the government wishes in the world don’t change that basic fact.

    These people aren’t “left behind” any more than they should be – life is fair that way.

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  2. CM

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  3. AlexInCT *

    If the super-wealthy provided higher wages

    Communism sucks, but your inner communist shows. Labor is only worth as much as someone is willing to do the work for. There is a reason we pay doctors, engineers, pilots, and other such professions that can not be done by anyone but the most educated/skilled more than we do the guy asking you if “you want fries with that” at the drive through. That’s reality. This idiotic idea that labor alone is what is important, and more idiotically that everyone’s labor is worth the same, or the epitome of stupid, that there exist something as stupid as a living wage, basically is collectivism’s downfall and why it always fails. It makes me bring up the example of the turd polisher again.

    A turd, just because it has been polished for 6 months by a state accredited laborer, for 8 hours per day, doesn’t suddenly become valuable. It is still a fucking turd. That laborer is basically producing no fucking value.

    Here’s a concept for you CM. If you really feel what you are getting paid is too little, demand the wage you want, or quit. If you are really worth what you believe you are, you should have no problem getting someone to pay it to you, right? Then again, what you are really saying is that even if you are not worth a fraction of what you are getting paid, it is unfair someone else makes more, and hence, you feel that they should be penalized for that. Profits are evil!

    Going through life envying the successful, and often taking it even a step further, like you do, and insinuating that their gains all always ill gotten if they have more than some arbitrary number you feel should be enough for others (but I bet would not be the same if you where the ones with the cash), sure must suck.

    I leave you again with a quote by Heinlein that constantly seems to escape people that believe like you:

    Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

    This is known as “bad luck.”

    That bad luck scenario is coming closer and closer for us in the West, and nobody should doubt the why. Here is a clue. It isn’t the super rich, but the whole grievance lobby, comprised primarily of super rich leftists politicians and their friends/co-conspirators, which jealously guards the gates for those wanting to become rich or super rich, while pretending to be doing what they do to help the “downtrodden”. It is neither a fluke nor an accident that whenever the collectivists run things, the elite and rich get richer, while the people suffer, with the poor getting poorer or more dependant. Look at the real Obama track record for the proof.

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  4. salinger

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  5. CM

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  6. Hal_10000

    McCardle has a good piece on this today, pointing out that the banks are acting a bit too conservative right now. They won’t loan to anyone with a credit score under 680 — hardly deadbeat territory — and are hoarding trillions right now. Regulatory uncertainty plays some role in that but they are mostly interesting in refis right now because they can borrow money so cheap from the Fed.

    CM and Salinger, I’ve started a post on inequality a dozen times and can never seem to get a handle on it. I’m not sure which stats to trust. And I’m not sure what policies would address it. Every policy I’ve ever seen seems to just empower the politicians and not really do anything. But I don’t think we can be so cavalier about it as to pretend it’s not a problem.

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  7. grady

    I certainly don’t support a system where loans are given to people who simply can’t afford them.

    I don’t think a single regular commenter here would disagree with this statement. I think the difference comes in what to do about a housing market that is not moving enough product. If housing is overpriced, why buy? Let the market correct to an actual value that makes sense? If a lender does not trust younger or lower credit score folks to borrow higher sums, then let the properties sit idle until it reaches something that the regular wage guy can afford or qualify for. If the government is backing loans (Freddie and Fannie), then prices will inflate. This benefits the rich/wealthy/propertyowner (whatever you want to call them), not the regular Joe/poor. Folks that make bad decisions will still default and the previous homeowner (the rich if you want to call them that) already got their money.

    Any govt subsidy is just making the real estate market move more product. People will make money, but it is a false market.

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  8. CM

    CM and Salinger, I’ve started a post on inequality a dozen times and can never seem to get a handle on it. I’m not sure which stats to trust. And I’m not sure what policies would address it. Every policy I’ve ever seen seems to just empower the politicians and not really do anything. But I don’t think we can be so cavalier about it as to pretend it’s not a problem.

    I struggle with it too, because I don’t want to fuck up the many things that the market does so well. Every policy I’ve seen is essentially a sticking-plaster approach, which means the underlying problem is actually left to get larger and larger. I don’t see how we’re going to avoid constant economic problems if the economy is so reliant on consumer spending, but the pool of consumers (proportionately) who can spend gets smaller. Economies need ‘growth’, but not unsustainable and/or fake growth.

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  9. Dave D

    You might want to drop pilot from your list – and engineers are some of the most overpaid people out there – (I know I was one for 23 years managing a crew of them for 8 of those 23.) Doctors may be another story but – I am inclined to believe they fall in with the engineers.

    You really have NO idea how the free market works, do you? You must have been around a BUNCH of crummy/underqualified engineers employed by a company with money to burn!!! Also, I’ve found that the term “scientific manager” usually means neither quality is present in excess in the individual.

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  10. grady

    If the super-wealthy provided higher wages, instead of taking more and more in profit and stashing it, more people would be able to

    Why do any people owe some obligation to pay more for any product or service than they can get it done for? This isn’t just about the super rich. Why do people buy basic electronics from Walmart instead of an audio store that features the high end stuff as well? Because it makes a difference to their wallet. The super rich are acting the same as the “barely making it from check to check” folks. High end audio stores don’t make it in most places. People did their research there and went and bought at BestBuy. Now the high-end stores are gone, people do their research at BestBuy and buy from the internet. BestBuy is struggling for their survival.

    A living wage is a stupid idea. You cannot set the price of labor or a service without artificially inflating the price of everything else. Why should I have to pay a contractor $100 a month to cut my lawn when I can get a local kid to do what I want for half? If the contractor is not providing any better service than the local kid, the price is not worth it. If the contractor does much better work, then the homeowner may be willing to pay the extra because he cares about the quality of the job.

    Quality of service matters. Rich people pay for that. Poor and middle class will as well. Don’t try and force them to pay any schmuck the same rate for different services.

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  11. grady

    I’ll gladly cede all arguments to him though if he can point me to one state which has successfully implemented Objectivist social engineering.

    Life will never be equal for all people. Accept this fact or be frustrated for the rest of your days. We can have equality under the law, but we cannot have equality of outcomes.

    When the NBA requires racial equality, the game will suffer. When any sector of business does the same, their sector of business will also suffer.

    Social engineering means that you have a pre-determined outcome (please tell me how I am wrong about this). I can appreciate that fact that the NFL requires that a minority candidate be interviewed for each head coaching job. I can also appreciate that each team can hire the candidate that they think will help them win/sell tickets/etc. Live and die by your own decisions.

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  12. grady

    You might want to drop pilot from your list – and engineers are some of the most overpaid people out there – (I know I was one for 23 years managing a crew of them for 8 of those 23.) Doctors may be another story but – I am inclined to believe they fall in with the engineers.

    Are you suggesting that engineers should be paid the same as draftsmen? That doctors should be paid as much as blood techs? That pilots should be paid as much as stewardesses?

    I understand that there are a bunch of engineers that are pretty much worthless in their work ethic. I imagine that every profession has it’s slackers. But not everyone can get an engineering degree, much less understand all of the science behind the principles. I supervise a group of engineers and technicians and 90% of the work can be done by all at the same level of proficiency. Then there are the times that you need someone who really understands why. You will pay for proficiency when your company is at stake. Some companies follow models and hire crap staffs. They usually fail.

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  13. grady

    Alex has said he doesn’t think increasing income inequality is a good thing. But he’s yet to explain how what he believes leads to anything else but making it worse. It’s just magic. As regulations fall away, people in power and with money magically become more generous and barriers of entry are torn down.

    You may believe that government regulation will force the middle class to exist, but the current administration’s policies are making the middle class shrink. Studies have shown that the rich are getting richer and the poor are getting poorer (at least down to welfare thresholds). A living wage, higher taxes and other regulatory requirements do make US companies less viable in a global economy (greater overhead = greater cost). This can be absorbed by larger companies easier than smaller companies.

    I don’t think there is a simple solution, but I don’t trust the government to make the choices on which companies are the best choice to survive and which products are the ones to allow to survive. Yes there needs to be regulation, but the smaller the government, the better for the country. Russia didn’t have the greatest standard of living when it made all the decisions. Neither has Cuba. The US still had poverty over all of it’s years, but at least the individual had more choices and more opportunity. I’d rather have the choices. Greater govt does not allow that. You may criticize true capitalism, but where does it exist? We have seen socialism and communism. Where is capitalism? Our government is making it harder and harder for small businesses to operate. If they cannot start or continue, do you think it will be better? This country is making it’s way to having large corporations perform all services under heavy regulation. The large corporations love this idea. Not exactly capitalism.

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  14. AlexInCT *

    You might want to drop pilot from your list

    A someone that flies I hope you end up with an unqualified pilot so you can then contemplate the wisdom of these words should his lack of skills manifest themselves, Sally.

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  15. CM

    Thanks for your comments grady, I already know and agree with most of what you’ve written. Unfortunately that knowledge and level of agreement it doesn’t get us any closer to avoiding economies that are unsustainable. Regulations both erect and remove barriers of entry. They both lift and squash wages. It all depends what they are. What is so unique about the Obama Administration – income inequality has been increasing steadily over the developed world for decades. This is not an Obama problem or a United States problem and pretending it is just isn’t helpful. It’s a western capitalism problem (just one of many).
    It’s not just the poor that get into substantial and unustainable levels of debt, it’s the middle class. Which is why it creates such a huge problem for everyone. If the rich want the economy to operate more sustainably, they can choose to pay their employees more. They’ll get it back because they’ll sell more goods and services. But of course that’s never going to happen, because as you say why would they choose to go out of their way to make the economy more sustainable. Fuck that, they’re not there to make the economy run sustainably – that’s apparentrly the job of the increasingly poorer and desprate lower and middle classes (the 47% who refuse to take personal responsibility for their lives…). Easier to keep blaming them, while at the same time marketing to them 24/7 to go into as much debt as possible (if you love America you’d do it).

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  16. CM

    And yet CM has repeatedly stated that he’s not a Marxist….. baffling……

    How does anything I said here make me a Marxist?
    Did the guy at unskewedpolling tell you?
    As usual, I won’t hold my breath waiting for you to support your nonsense.

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  17. balthazar

    How does anything I said here make me a Marxist?

    Hey Douchebag….

    If the super-wealthy provided higher wages, instead of taking more and more in profit and stashing it,

    Again, this is an attempt (just like EITCs) to correct an increasingly fucked system where rewards for work are increasingly disproportionately provided.

    You are such a stupid shitstain, yer the reason I come here less and less.

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  18. salinger

    A someone that flies I hope you end up with an unqualified pilot so you can then contemplate the wisdom of these words should his lack of skills manifest themselves,

    Even though I find many of your comments to be bordering parody in their strident and inflexible desire to remain uninformed, I would never wish harm on you.

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  19. AlexInCT *

    Even though I find many of your comments to be bordering parody in their strident and inflexible desire to remain uninformed, I would never wish harm on you.

    When you told me you figured any monkey could be a pilot and that they are overpaid for a skill thats so easy to acquire, you all but did exactly that Sally. So not only do you fail with your dumb attempt at insulting me, you come off as a pathetic liar.

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  20. salinger

    Uh, I was referring to the fact that pilot’s pay is not as high as you may think as stated by the pilot’s blog I linked to.

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  21. CM

    Hey Douchebag….

    Neither of those statements you’ve quoted come even remotely close to making me a Marxist. Other statements I’ve made make it clear that I’m not, but you’re not interested in any sort of honesty. As usual, you just want to maintain a boner.
    Hey, I’ve been to Rome, I guess I must be Catholic. And I’m a guy, so I must be a rapist.
    I’m obviously a Catholic rapist.

    You are such a stupid shitstain, yer the reason I come here less and less.

    Maybe you could spend that time learning to……….nah, nevermind.

    When you told me you figured any monkey could be a pilot and that they are overpaid for a skill thats so easy to acquire, you all but did exactly that Sally. So not only do you fail with your dumb attempt at insulting me, you come off as a pathetic liar.

    Um no, you clearly keep failing to understand. Your whole sermon back at me was like something from The Onion. You’re continuing your MO of not actually responding to what people post, because you can’t seem to get off the standard script.

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  22. balthazar

    Um no, you clearly keep failing to understand. Your whole sermon back at me was like something from The Onion. You’re continuing your MO of not actually responding to what people post, because you can’t seem to get off the standard script.

    Project much?

    It seems that you do, yes.

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