When former Gov. John Rowland announced at one point during his reign that Waterbury was the “center of the universe,” we believed him.
No, no, we did not think it was a joke; we did not shrug it off as a bit of tomfoolery from a local boy made good, before he made bad, and now, as Waterbury’s economic development czar, made good, again.
And since Waterbury was the center of the universe that meant that the rest of us lived at least on the periphery of the center of the universe.
Democratic Enthusiasm
I’m caught up in the enthusiasm of the Democratic legislators in the General Assembly, who believe that we can launch universal health insurance; we can game the mortgage crisis; we can, in fact, teach this nation a thing or two about how to do stuff. Lots of stuff. Almost everything.
Poor Gov. M. Jodi Rell, who is a Republican (whatever that is), proposes all sorts of solid, measured, calibrated, cautious, ideas about health insurance and mortgages and other stuff that the nation hasn’t quite figured out yet — and then she waits for the Democrats to chant, “we’re number one; we’re number one,” on the way to proposing grandiose plans for unsustainable subsidies for health insurance and home-loan bailouts.
This actually works out well for Rell and the four Republican legislators in the General Assembly. Without being draconian, they can come across as fiscally responsible (a good, Republican thing to be).
The Right Idea
The original Rell mortgage package was just about right for Connecticut. It committed a reasonable $50 million and focused on first-time homebuyers who were at least minimally creditworthy.
The new Democratic instinct is to commit much more money — and would increase eligibility to include almost everybody who walked through the door with a tear in their eye. In fact, stripped of all its bailout nonsense, the Democrats have included a bit of regulatory disclosure language and counseling programs that seem about right.
In the end, something not terrible will be worked out, but it will still be yet another welfare-style income-transfer program that commits the state to unjustifiable expense.
At the end of the day, folks committed to houses that they can’t afford; agreed to loans that were above and beyond what they could reasonably expect to repay. In many cases, these folks were first-time homebuyers, making little or no down payments. If in fact, they end up back in the rental market, they have lost little more than a bit of dignity and some moving expenses. There is little justification for the state to commit to major subsidy masquerading as “loans” to folks in such circumstances.
The Democratic plan rewards every imaginable real estate foible or personal misadventure with a potential state government bailout — with no acknowledgement that financial institutions and the Federal Reserve may be available with grown-up programs for credit-worthy victims.
Federal Reserve Chairman Ben Bernanke has called on lenders to make accommodations to homeowners. That makes more sense than Connecticut-style paternalism.
It’s not Connecticut’s business to ensure that everyone has their very own three-bedroom ranch house. Home ownership is characterized as the “American Dream,” not the “American Guarantee.”
Laurence D. Cohen is a freelance writer.
