If there was ever any question about the Bush Administration’s motives, perhaps the treatment of the sub-prime mortgage disaster would help clear up the issue. We have already seen the architects of this abuse of power receive record bonuses. And Bush was quick to make sure that the mortgage companies’ profits were protected. It took months before he even thought about helping actual people affected by unbridled profiteering. But certainly it would be expensive to help people who really need it, right? That doesn’t seem to be the case.
MSN Money reports in A bailout that wouldn’t cost you a dime. From the article:
Congress is considering a plan that could prevent foreclosures for about half a million homeowners. The legislation, which passed the House earlier this month, would do the following:
- Allow strapped borrowers to refinance into more-affordable, federally guaranteed mortgages.
- Aid only homeowners, not investors or speculators.
- Require those homeowners to split any future home profits 50-50 with the government.
- Cost taxpayers an estimated $1.7 billion, according to the Congressional Budget Office.
That price tag isn’t as hefty as it seems when compared with how much the rest of us could lose because of foreclosures. Homeowners who keep their houses, but who live in areas where foreclosures are rising, are expected to lose $356 billion in home-equity wealth in the next two years as neighborhood foreclosures whittle away at the value of their homes.
What’s frustrating is that lawmakers had a solution that could have helped even more homeowners and would have cost you, the taxpayer, exactly nothing. This free-to-you plan would have allowed bankruptcy judges to modify mortgage terms and helped as many as 600,000 homeowners avoid foreclosure.
Who talked Congress out of this solution? Why, the very lenders and mortgage brokers who got us into this mess.
None of this should come as a big surprise to anyone that has been objectively watching politics in the United States. The people are left to fend for themselves while organizations are allow to abuse their power and seem to have a right to receive rewards for it. Clearly, few people are blameless in this situation, but mortgage borrowers were clearly mislead. Brokers have been unethical in their lending practices, but there’s little chance that they’ll pay for their actions.
A common tactic used by dictators throughout history is to keep people poor and ignorant – a goal on which the Bush Administration seems to be working quite diligently. The only risk, of course, is when the disparity in wealth becomes too great. I can only guess what Dubya’s version of Marie Antoinette’s “Let them eat cake!” affront would be. You can be sure it won’t be grammatically correct (assuming he writes it), but Americans as a whole will still likely ignore or tolerate it.