Speaking of ideological purity and keeping certain memes in place, I think we can "put paid" to the notion that most mortgage borrowers are ignorant of basic economics. When you have tens of thousands of subprime borrowers flushing down their mortgages BEFORE the resets happen, that should give you a fairly good indication that contract terms are read with a clear mind. This is no different than the 20% default rates on subprime credit cards that were happening back a decade ago.

Now if you want to call the holders of Mortgage-Backed Securities ignorant for not taking into account such perfectly rational borrower behavior, be my guest.

Yes OJ, the Republican trait of standing on principle without bending is a real problem. Between the numbers lost to the little parties that float away on little platforms of purity, like the Libertarians or the Constitution party, and the fevered dreams that break out in the rank and file(Best example of that being the number of people who think of themselves as Gandalf on the bridge. "Illegal Immigrants Shall Not Pass!"), the Democrats have been able to sacrifice millions of lives to their culture of Death(in and out of the country).
How did we go from "Paris is worth a Mass" to "Justice, though the Heavens fall"?

A Wall Street Journal article last week highlighted a provision in the "bailout" that allowed for bancruptcy judges to strike clauses on mortgages on a "case-by-case" basis.

This type of thing is occuring in many areas, and it is becoming clear that we are devolving back to a "nation of men" with the arbitrary and capricious decisions on matters of policy, and rapidly undermining the "nation of laws" that the text books talk about.

The interest rate drops, SIVs and central bank shenanigans are the bailout of the super-rich, (at the expense of the long-term health of the currency) while the mortgage bill creates the massive moral hazzard of allowing judges and corporations ("voluntary" indeed) to decide which people get the bailout and which don't.

One need not an "ideologically pure" CATO maven to see that this bailout is awful policy that once again, does nothing to solve any problem, while setting in place another "arbitrary and capricious" structure in place of one based up contract.

Actually, you do have to be a fanatic to think it vital to discourage people at the margins from attempting home ownership in order to protect the profits of banks. The very definition of an ideologue is one for whom the idea is more important than the result.