THE PURITAN NATION HAS CONSEQUENCES:

Worshipping at the Church of Freedom: I am in favor of a free market in religion and a free market in housing. (Mark Steyn, 12/08/07, National Review)

Last week the Bush administration decided to “freeze” the interest rates of certain types of mortgages for five years. You’ve probably caught the tail end of news stories about “subprime” home loans, lots of foreclosures, etc. Never a happy moment when the bank takes the farm. So now the government has stepped in and said that, if you fall into a particular category of Adjustable Rate Mortgage (ARMs, in the biz) and you’re worried that it’s getting way too adjustable, don’t worry: The nanny state is about to re-adjust it well inside inside your comfort zone. By fiat of the Treasury Secretary, your Adjustable Rate Mortgage is henceforth an Unadjustable Adjustable Rate Mortgage. These new UNARMs will spread their healing balm across the land until it’s safe enough for the housing “market” to once again be exposed to market forces.

The government has, in effect, nullified the terms of legal contracts mutually agreed by both parties — borrower and lender, Mr. and Mrs. Joe Schmoe and the First National Bank of Pleasantville. This is a pretty remarkable act by a “conservative” administration. The government’s general absolution for imprudence by both borrower and lender doesn’t seem a smart move — for the U.S. credit markets, for real estate, for responsible borrowers for future homeowners, or for state and municipal taxpayers whose governments are being encouraged by Washington to bail out home “owners” by issuing tax-free debt. Democrats bemoan the lack of “affordable housing” while simultaneously demanding government rescue home “owners” with unsustainable mortgages. But saving the latter obstructs the former: the principal benefit of a property-bubble correction is, after all, much more “affordable housing.” [...]

There don’t seem to be a lot of takers for small government out on the hustings this season. We were told by plenty of experts that this would be the year in which the Christian right would be rendered politically irrelevant: Nominating Rudy Giuliani (a pro-life candidate positively Chiracesque in his sexual habits and the taxpayer funding thereof) would leave the religious right out on the fringe. Instead, the evangelicals found a candidate, destabilized the race, and we’ve spent the last couple of weeks talking about nothing but religion. Mike Huckabee’s declaration in his Iowa advertising that he is a “Christian leader” seems a barely coded dig at Mitt Romney’s Mormonism, and Mitt’s big speech on Thursday was his own attempt to put the Mormon question to bed.

For the same reason that religion plays a central role in selecting a president America ought to be expected to be intolerant of usury.

Posted by Orrin Judd at December 9, 2007 8:36 AM