Monday, March 23, 2009

They are at it again

March 23, 2009

Headline from USA Today
As bankruptcy filings mount, attention turns again to reform


The article contains this statement: " ...Congress is focused on efforts to stem home foreclosures by altering the law so that bankruptcy court judges will be allowed to modify certain mortgages to help people keep their homes."


Just great. Another deplorable step on the road to serfdom and the collectivist state and just what we need - to allow judges to modify this specie of contract. Yes, that is really going to be the ticket now isn't it?

I mean, it is not like the banks are now going to have to price into the equation the reality of the risk that some bleeding heart judge will later step in and change the terms of the contract to "help out" those that made a wrong choice and now need to pay the price consisting of the consequences.

Just another example of why the Constitution reads the way it does - to prevent Federal meddling in the economic engine and meddling in social policy. And please do not send any comments about the Commerce Clause of the Constitution. That was to prevent the individual States from setting up a set of protectionist taxes or bounties on trade coming in or going to another state. It was never thought that it would be used to stop a farmer in Ohio from selling corn to his neighbor because in doing so, his neighbor would not buy corn from Illinois, and thus there would be an effect on interstate commerce thus giving rise to an authorization for Federal intervention/control.

Try a little reductio ad absurdum to see that if this view of intervention is allowed, then everything falls under (and beneath the grinding wheels of ) the commerce clause. Indeed, even my posting this to my blog, typed on a black colored keyboard, because it may be read by a person in Ohio and induce him to not invest in any home because I convinced him that the government could come in an change his contract, can be deemed as having an effect on interstate commerce, and thus fall under control of the government and be used as an excuse to place restrictions on keyboard colors.

3 comments:

RKL said...

Normally I don't support this kind of legislation but why not do the following?

Make adjustable rate mortgages illegal in the future.

As for the current situation, kick those people out of their homes if they can't pay. They can go back to apartments. Then their homes can be purchased by people who can pay. But that approach would be too American.

RKL

Publius said...

RKL, I think that your misgivings that you "normally don't support this kind of legislation" is a good clue, and might I propose that we take a page from your posts (and mine too) about responsibility and instead press the point that the adjustable rates would self-regulate themselves out of existence if those that used them, and those that provided them, had to bear themselves the consequence of making and taking them?? (Just like the last part of your comment indicates.)

This way you and I keep both feet firmly OFF the slippery slope of Federal government intervention for the "good", which invariably leads to the "bad".

(Note here how I say Federal. I am certain that THEY are overreaching and that the Constitution was intended to prevent just what they are trying to do, but I am still making my moral judgments as to how much state legislation is morally appropriate/legal."

RKL said...

You're right, I was in a weak moment, because I was home sick from work yesterday.

Yes the federal government shouldn't be doing any of this crap!

RKL