As a longtime renter, I have to admit that mawkish sagas about people who bought houses they could not afford and then faced the predictable foreclosure leave me cold. Having, as I do, a belief that we mostly learn through mistakes, I have no desire to shield them from learning an important lesson, especially not with my tax dollars.  

President Obama realizes taxpayers have no appetite for helping out these irresponsible souls. But that, according to Karl Rove, isn’t going to stop him. Now, egged on by the Department of Justice, he is trying to force banks to help them:

The money would come from a settlement with JP Morgan Chase, Citibank, Bank of America, Wells Fargo and other banks accused of “robo-signing,” in which foreclosure documents were signed by bank employees or agents without properly certifying all the papers. The attorneys general admit that virtually no one was erroneously foreclosed upon because of robo-signing. The banks foreclosed on people who were on average 18 months delinquent, and after multiple attempts to modify the loan had been tried and failed.  

But Justice and the state attorneys general are demanding $20 billion for sloppiness, which they will then be able to hand out to voters-and potential supporters. The money won’t come from the banks; it will come from their customers, millions of whom will pay more in fees and interest and will, in some cases, be denied credit.

This stinks. It’s not only corrupt, it’s bad policy.

This will create an incentive for people who are current with their mortgages to get behind so that they can be helped. Oh, and, some of the money will go to the federal government to be used on attractive projects that can include helping somebody to attend a junior college. I’d say it’s better to get a second job and pay off your mortgage. You can learn more from paying the mortgage than taking courses in junior college!

I’m a conservative in part because I have a mildly pessimistic concept of human nature. Maybe that’s because the only lessons I learn tend to be painful ones. If we don’t take our hard knocks, in my view, we don’t learn. Buying a house you can’t afford should be a learning experience, but you learn the wrong lesson if banks or the taxpayers assume responsibility for your errors.