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This morning, we were watching a Senate hearing about the housing finance system, and caught a poignant moment about the consequences of "depoliticizing" home ownership. Witness Thomas Hamilton of Barclay's Capital stated that government action is creating more homeowners than the private market would, an objectively true statement. If the housing market were "depoliticized", or absent of government intervention, only those with the ability to front significant down payments (i.e. the well-to-do) would be able to become homeowners.

Would that be a good thing? What would the implications be for our nation's commitment to democracy and freedom, given the central importance of home ownership to financial independence? We can't claim to have a definitive answer to these questions, since such answers reflect values and political beliefs about the proper role of government. But we do hope you consider them with an open mind and come to your own conclusions.

And as we are wont to do, we clipped out the video for you to see for yourself. Watch it here:

This clip is also notable because it demonstrates a textbook use of branding by Republicans and their small government allies. They dub deregulation of the housing finance system as "depoliticization", a sleight of hand that obscures the legitimate ideological debate at play. A policy change to let the market reign free in deciding who can become homeowners may or may not be justified, but it is unquestionably political in nature.

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Comment Preferences

  •  Tip Jar (7+ / 0-)

    "Are you ready for the real revolution, which is the evolution of the mind?"

    by optimo on Wed Aug 03, 2011 at 02:07:21 PM PDT

  •  It's too political already. (4+ / 0-)
    Recommended by:
    debedb, AmyU, Sparhawk, tmo

    1. There's no friggin' way we should continue to have the mortgage intrerest deduction for expensive homes, or for second homes.

    2. Whether we should have the mortgage interest deduction for modest primary residences is not clear. But it's clear that's not going away, so it's not worth fretting about.

    Government subsidies for homeownership helped create the housing bubble. And the taxpayer will probably end up paying gazillions more to bail out Freddie Mac and Fannie Mae before it's over.

    In a sane economy, falling housing prices would be a good thing. It would mean fewer homeless people; more people could have nicer homes; more disposable income left over after making the mortgage payment. The reason we see rising housing prices as a good thing is that we've come to see homes not just as shelter and comfort, but as most people's primary investment. Thus most people want the government to prop up housing prices; do that long enough and you get a bubble.

    If we don't stop propping up housing prices, or at least cut way back on doing so, we're gonna get another bubble.

    We need a fair way to help those now stuck, underwater on their homes, who got that way in reliance on the government-driven bubble.

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Wed Aug 03, 2011 at 02:30:24 PM PDT

  •  How about an enormous F*** You, Michele (0+ / 0-)

    Bachmann. The banks have started demolishing forclosed homes in some areas, probably mostly to keep 'squatters' from moving in. Is there any land left to set up the 'hoovervilles' the rethugs' policies are setting up? Wake up, stupid, freddy and fannie were never the problem, bank thefts and fraud in the 'derivitaves' crapshoot were, the resulting depression caused the rest.

    May you live in interesting times--Chinese curse

    by oldcrow on Wed Aug 03, 2011 at 02:52:22 PM PDT

  •  Prices would come down too, maybe? (0+ / 0-)

    If government action is pushing demand up, then I'm guessing that prices would retract a little without government intervention.

    This would be a good thing.

    Right now, there are responsible people that would like to own a home, but the prices are a little too high (and racketed up by irresponsibly people and the government working together). If prices fell a little, those responsible people at the margin would get their chance.

    Sounds good to me.

    And while we are at it, can we finally cut Fannie and Freddie off? I'm tired of being on the hook for other people's homes when I live in a tiny apartment.

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