April 2007

One of the more bizarre claims of the faith based right is that markets just work.  That’s not what economists say, of course. They say markets work under specific conditions including full information, but we know that the subprime market has had many, many bad operators in it for years now and one of their tactics is to agree to a set of terms and then include different terms in the text of the agreement.  Individuals aren’t able to read through  the legalese or are pressured to sign quickly, and surprise, surprise the conditions knock them out of their house.

Hence, the idea behind mortgage counseling is that it is designed to ensure that individuals obtaining subprime loans have full knowledge of the impact of the loan agreement they are signing.

But our good friends  in the social darwinism camp at  Illinois Review think providing information to people obtaining riskier mortgages is nanny state like.

The thing is that the program (more Madigan’s idea than anyone’s) isn’t designed to be nanny-state like–it’s designed to ensure that transactions occur in a full information environment where people are given assistance in understanding the terms of an agreement especially in cases where unscrupulous subprime lenders misrepresent the terms.

None of this happened in a vacuum though–Alan Greenspan strongly encouraged people to adopt variable rate mortgages.  As we see the subprime market crumbling, we can only guess that it was because he saw the house of cards about to come down and wanted to keep the illusion going that everything was okay.

I will give some credit to Dan Green who has written about some of the very real practical problems with HB 4050, but I strongly disagree that counseling is not a good thing if we can provide it to people and HB 4050 identifies key warning signs of a borrower who will not be able to maintain their payments.

Cross-posted at Illinois Reason 

Is demonstrated in a post that also exemplifies his aversion to editing.

An adversarial press vis-à-vis Republicans, forcing Giuliani’s third wife to admit she was herself married three times, something she admitted after interrogation last week. Only after steadily asking for as many biographical details as are available for other presidential candidates when reporters asked where Obama’s Kansas-born white mother was, we learned that she had died twelve years ago. Case closed. Some adulators implied her death was a private matter–nobody’s business; others defended the close-to-the-vest information policy, asserting, “we knew all the time she was dead.” The point was: Few knew or asked more than what the campaign office chose to release.

Let me offer a line from Obama’s DNC Convention speech:

They are both passed away now.

Only after asking for biographical details…

Uh huh.

Perhaps Tom should remember that at the same time they were discussing Mitt Romney’s great grandfather, the press also reported that Obama had a slave owning ancestor as well.

But more to the point, one cannot tell why the press should be concerned with the death of his mother.  A woman died of cancer.  That’s it.

We learned that while the senior Stanley Dunham is dead, his wife Madelyn is alive at 84 but that there is an embargo on her being interviewed. Although she was a bright and successful bank executive during Obama’s Punahou days, her receptivity is a closed book. We know that in the words of his half-sister “those were robust years full of energy and cacophony and she loved all of it.” Why is she kept away from the media? Well, we’re not privileged to know that-yet. Perhaps never. Is she incapacitated or unwilling to be interviewed? We don’t know that, either. Big media shush: It is not good form to ask.

You know some people get older and know they aren’t as sharp as they once were.  This might lead them to not drive anymore or say not comment in the press.  Sometimes the family has to take the keys away.  Perhaps given the repeated and egregious errors Roeser has made, it’s time for the family to take the keys to the blog and radio show away.