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Let Them Sleep On The Street! It's Better For The Economy

Reported by Ellen - February 24, 2009 -

FOX News' Saturday business shows, collectively known as “The Cost of Freedom,” continued its unbalanced, highly politicized attacks on distressed homeowners this past weekend. Last weekend, the Cashin' In show painted them as undeserving deadbeats. This week, Bulls & Bears portrayed them as undeserving roadblocks to a better economy. Updated with video.

The “Cavuto mark” of a topic was whether or not President Obama's mortgage rescue plan “risk(s) making home ownership a birthright, not a privilege.”

Gary B. Smith, of Exemplar Capital said, "I think we've moved past birthright, we've moved into goverment mandate. I mean it's almost like the government now is forcing people into homes... I don't even know why the interest rate deduction, the mortgage deduction, is in the tax code." … Why is home ownership better than rental? ...I tell you what, the rental option is what these people who are in these foreclosed homes - 95% of them should be (in rentals) anyway.”

Responding beautifully was Democratic strategist Malia Lazu. She called it "insane” to blame the distressed homeowners. Lazu said, “Our system here is broken, and we need to fix the system... Subprime mortgages were being handed out like hotcakes.... Barack Obama needs to stabilize our economy, we need to make sure that we don't have nine million people homeless. That is far from saying that it's a government mandate to have a house... Millions of Americans got caught in a system that is busted. For us to say they didn't get the protection, and therefore they should be held responsible is irresponsible as a country. And as an American, I think that is an absolute shame that we can sit here – and as we're facing the economic crisis of our time – and say it's OK for 9 million people to go homeless, to default on homes, for our values to continue to fall."

Smith said, "There shouldn't be a mortgage interest rate deduction in the tax code. That pushes people into homes." Comment: As opposed to pushing people out of homes and out into the street, Gary?

Pat Dorsey, of Morningstar.com, said that while it was a bit of an overstatement to say that Obama's program made housing an entitlement, “I don't think we need to keep people in homes they can't afford. That just kicks the problem down the road a little bit further... You have to let the market clear.”

Tobin Smith, of ChangeWave Research said, “In capitalism, we have to have failure... so that we can grow again... Nine million homeless is another one of those fear tactics.”

Gary B. Smith shouted to Lazu, “You make it sound like every one of those nine million people is gonna go living in a cardboard tent out on the streets. That's not true. Most of those people have been living rent-free for months. They shouldn't be in those homes and all they're gonna do is take the money they save and they're gonna go rent a place. That's what's gonna happen and, as Pat said, it's going to allow the mortgage market to clear.”

It was telling that none of the regulars (everyone but Lazu) seemed to have any hands-on experience with distressed homeowners. Wouldn't it have been a lot more informative for viewers to have the perspective of say, lawyers or judges who work with these cases or even a bank officer? While waving off the 9 million homeless figure as a “fear tactic,” neither Tobin Smith nor Gary B. Smith ever mentioned how many homeless there would be. Nor did they divulge what they considered an acceptable level of homelessness in return for “clearing the market.” Maybe because there's no limit to the suffering of other people they'd tolerate in their quest for the right kind of market.

Demonizing homeowners as FOX does simplifies the issue in a way that just happens to nicely dovetail with its schedule full of attacks on all things Obama. Not mentioned in the discussion (nor have I seen it mentioned anywhere on FOX News, and I watch it a good deal) is that the plan's purpose is to rescue the housing market not individual homeowners. As the Christian Science Monitor (hardly a liberal outfit) reported last week, “The $225-billion plan aims to help millions of homeowners either on the cliff of foreclosure or living in houses worth less than the mortgage. The real purpose, though, isn't a long-term social program but to put a floor under a housing market in a downward spiral. If prices stabilize, then a value can be put on the bundles of mortgages held as securities by wobbly banks. Banks in turn will start lending again. The credit crunch will decrunch.”

Shouldn't the “fair and balanced” network explore that angle, especially if it means that the rescue may greatly benefit the economy at least as much as doing nothing except “letting the market clear?” And aren't we constantly told by FOX that the economy is more important than individuals' problems? Yeah, except when there's an anti-Obama axe to grind.

Many thanks to guest blogger Brian for his contributions to this post.