Unfortunately, I am not kidding. In an incredibly poorly informed piece on the foreclosure crisis (they apparently still haven't heard of the housing bubble), NPR concluded with a quote telling listeners that, "We're really just trying to figure out who bears the loss. Do we want the government to bear it all, or do we want some of it to be pushed onto investors?" Of course, that's the question. Investors can't be expected to know what they are doing, the little boys and girls need the government to help them out. After all, that is why we have the government. No one would want to leave wealthy investors' fate to the market. The only question is whether we bail them out completely, or maybe force them to suffer some loss due to their bad investments. It's great that NPR framed the range of views that it will present on this issue so clearly. Of course there are people who think that the government should focus on helping homeowners rather than wealthy investors who are too dumb to know how to invest their money. Some of us have advocated just temporarily changing the rules so that homeowners facing foreclosure would have the option to remain in their homes as renters for long periods of time. This would both give homeowners security in their home and give the banks real incentive to negotiate terms that allow homeowners to stay in their house as owners, since banks will not want to become landlords. This proposal has the advantage of requiring no tax dollars, no new bureaucracy, and could take full effect the day that Congress passes it. But, it would not help the investors make up their losses which NPR tells is the real purpose of government, so you won't hear about it on Morning Edition.
--Dean Baker
