The typical political solution to a free market is to impose extra costs on prudent buyers so that speculators with political connections can get a government bail out. The politicians act like they're just helping poor people, but they're making things worse for everyone by changing the rules of the game. I'm all in favor of full disclosure in lending, but once you make the deal, the government has no business getting involved.
The president says: "The homeowners deserve our help." But why "deserve"? The principles of "compassionate conservatism" are opaque, but they might involve liberalism's premise that Americans are so easily victimized they must be regarded as wards of government.
Perhaps Washington's intervention in the subprime problem reveals the tiny tip of an enormous new entitlement: People who voluntarily run a risk, betting that they will escape unscathed, are entitled to government-organized amelioration when they lose their bets. The costs of this entitlement will include new ambiguities in the concepts of contracts and private property.
Monday, December 17, 2007
George F. Will - The New Entitlement