Did you hear of the Grasshopper who sang all summer while the Ant worked hard collecting food?
Well, one cold winter’s night a hungry, miserable little Grasshopper hopped by the window of an Ant, warmly lit up by a lamp.
He peeped in, hoping to find some food on their table to beg. Looking through the glass, he saw mounds of grain stacked in a corner and happy chatter among the ants as they walked around busy with their work. The grasshopper decided to knock.
“Could you please spare me some food, dear Ant, I am so cold and hungry,” pleaded the Grasshopper when an ant opened the door.
“Weren’t you the Grasshopper who sang all summer while we worked? You even laughed at us while we gathered grain under the blazing sun!” said the Ant.
“Yes, I was,” admitted the Grasshopper.
“Well, you sang then,” replied the Ant as he closed the door. “You can dance now!”
For decades, starting with Jimmy Carter’s Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out because of their credit scores or ability to pay back the loans. But it led to tremendous pressure on Fannie Mae and Freddie Mac — which in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity.
And now the government wants normal taxpayers … those people that are paying back their loans … to rescue this circus to the tune of $700 billion.
This will be a bailout that will include many irresponsible people who acquired homes they could not afford and an equity position for taxpayers in companies that accept public funds. A more plain-spoken description would be one word: “socialism.”
Perhaps the most unfortunate thing about all the Republican support for this fraudulent “rescue” plan is that there are free-market alternatives that have been essentially ignored during the debate. These include repeal of (or at a minimum, dramatically scaling back) legislation such as the Community Reinvestment Act, which gives liberal activist types legal authority to shake down corporations to get them to give mortgages to people who are bad credit risks. What a novel concept, huh?
Community Reinvestment Act, Fannie Mae, Freddie Mac, mortgage
