Obama's Mortgage Police: Has he learned from the last financial crisis? The answer is no

American Thinker ^ | 08/28/2013 | Peter Wilson

[SeekAndFind]

This summer the White House unveiled "President Obama's Plan for a Better Foundation for Middle Class Homeownership," which is so amazing it merits a second slogan, the "Better Bargain." A cutesy infographic explains the Plan, using language that seems out of place among Obama Administration statists:

"Put private capital at the center of the mortgage system"

"NO MORE TAXPAYER BAILOUTS!"

"End Fannie and Freddie's failed business model"

The White House explains further:

[President Obama] made it clear that we can't go back to the same bubble-and burst housing system that caused the financial crisis. We need a rock-solid foundation for financing homeownership with a bigger role for the private sector, where taxpayers aren't on the hook for the irresponsible behavior or bad decisions of financial institutions.

Obama of course has not suddenly become a champion of the private sector. He remains at heart a leftist with contempt for "fat cat bankers." Why then would he want to create a "bigger role for the private sector"?

When a socialist government nationalizes private industry, it gains control, but it is also forced to take responsibility for the financial losses of the industry it now owns. For example, British Leyland was nationalized in 1975 and, writes the New York Times, "the company that went through £11 billion of inflation-adjusted British taxpayer money, or $16.5 billion, in the '70s and '80s before going out of business."

Obama's strategy here is more devious: he takes control by expanding regulatory power, but then would like to absolve himself of any responsibility when the costs of red tape and defaults on mandated subprime mortgages generate losses for these private institutions. It's the institutional enactment of the Limbaugh theorem, the strategies that allow Obama to escape blame for his failures.

[Zuse]

B0 does not need to “learn” anything. He already knows everything.