"In Texas, if you come to play, you better be ready to pay"
You know how conservatives just love
to say the government shouldn't be in the business of picking winners and losers? Well:
As Texas governor, Rick Perry spent tens of millions in taxpayer money to lure some of the nation's leading mortgage companies to expand their business in his state, calling it a national model for creating jobs. But the plan backfired.
Just as the largest banks began receiving public cash, they aggressively ramped up risky lending. Within four years, the banks were out of business and homeowners across Texas faced foreclosure. In the end, the state paid $35 million to subsidize it.
An Associated Press review of federal mortgage data, court filings and public statements found that Perry downplayed early warnings of an impending mortgage crisis as alarmist. That's even as Perry's own attorney general would later investigate whether Countrywide Financial Corp. encouraged homeowners to borrow more than they could afford.
As Perry offered $20 million in grants to Countrywide and $15 million to Washington Mutual Inc. — each blamed for having a major role in one of the country's most serious recessions — he took in tens of thousands of their dollars for his gubernatorial campaign.
Contrary to conservative dogma, there actually are examples where the market needs a helping hand from the government—examples like supporting the development of new technologies or preventing pollution come to mind. But I'm pretty sure there's no good reason governments at any level should have subsidized individual subprime lenders, especially ones involved in widespread fraud. Nonetheless, you probably won't hear a peep about this from anyone on the Republican side of the aisle, because it's okay if you're a Republican—especially if the "it" in question is crony capitalism.