It looks obvious

A year ago we purchased our first house. It took us long time to calculate how much mortgage we are going to afford based on our income and once we made our decision we stood firm against persuasions to buy house that was more expensive than we planed to. The arguments were very compelling, after all a more expensive property is usually better and spreading the cost over the life time of the mortgage resulting in a smaller monthly. However, we didn’t made a clear decision not to take a loan that is beyond our means.

Today I learned that we, along with many others, were stupid. Instead of getting a better house, that we couldn’t afford, we are going to pay for someone else’s house:

WASHINGTON, Aug. 30 — President Bush, in his first response to families hit by the subprime mortgage crisis, plans to announce several steps Friday to help Americans who have credit problems meet the rising cost of their housing loans, administration officials said Thursday.

The officials said Mr. Bush would call for the Federal Housing Administration to change its federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up, beyond the 160,000 likely to use it this year and next.

The administration is offering his plan, which will include what one official called jawboning of lenders to persuade them not to foreclose on some borrowers, at a time of growing attacks on Mr. Bush from Democrats who say he has remained on the sidelines amid increasing anxiety over whether millions of Americans could end up losing their homes. Other elements of the plan would need legislative action, requiring Mr. Bush to win over the Democratic leadership in Congress.

Some might jump and explain that this is done to save the entire market from collapsing, which might be true. Some will also explain that the President move actually helps the banks getting the mortgages, they so recklessly offered, secured - and they would be probably correct as well. And some will point to the fact that the risky mortgages are the results of the Federal Reserve’s policy in 2000.

However these arguments doesn’t change the fact, that taking money from those who didn’t buy houses that they can’t afford to pay for those who did, is simply immoral.

I’m reading these days an excellent book about the 30’s depression, which I’ll write about when I’ll finish. At the beginning of the book the author quoted from the "Forgotten Man", written by William Graham Sumner, which is still very relevant:   

The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man. For once let us look him up and consider his case, for the characteristic of all social doctors is, that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble; they do not understand that all the parts of society hold together, and that forces which are set in action act and react throughout the whole organism, until an equilibrium is produced by a re-adjustment of all interests and rights. They therefore ignore entirely the source from which they must draw all the energy which they employ in their remedies, and they ignore all the effects on other members of society than the ones they have in view. They are always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion - that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.

And one small remark to the NY Times reporter - those people that cannot pay the mortgage they took didn’t not get his by the subprime mortgage crisis. It isn’t a force of nature, a storm, that his them. Words have meaning, and the NY Times choice distort the reality.