A daily dose of philosophical food for your noodle!		NoodleFood : RSS Feed | via E-mail | Recent Comments | Archives NoodleCast : M4A via iTunes (MP3) | via Feed Reader | via E-mail Diana Hsieh : Rationally Selfish | PhiloFiles | Explore Atlas Shrugged OList Mailing Lists | FIRM | FRO | Secular Government

Monday, January 11, 2010 Not Unintended Consequences By Diana Hsieh @ 8:00 AM Surprise, surprise: The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good. Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes. As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies. Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system. Go read the whole article. Conservatives tend to speak of these kinds of harms to underwater homeowners and financial markets as "unintended consequences." That's terribly wrong, I think. Politicians should know better than to enact such laws. They ought to take some care in how they do their job -- just as electricians, doctors, and even garbage collectors do. That includes investigating the likely effects of proposed laws -- rather than hand-waving them away with the thought that they mean well. If they fail to do that due diligence, we are entitled to think them negligent -- or worse... that they intend their laws to fail so as to excuse even more violations of our property and contract rights. Let's make sure that we call the spade that's digging our mass grave "a spade," not an "unintended consequence." Labels: Economics, Politics Share |    E-mail Diana Hsieh     PermaLink ()    Comments (New Page)   Subscribe to NoodleFood Blog Posts via Feed Reader   via E-mail Subscribe to NoodleCast Podcasts M4A via iTunes (MP3)   via Feed Reader   via E-mail

Comments
	Monday, January 11, 2010 at 8:12:06 mst Comment ID: #1 Name: Brian E-mail: brian0918(at)gmail.com URL: http://reality.ohio.newintellectuals.org/?p=569 Diana - I think you should submit your bit as a Letter to the Editor, or have the other Dr. Hsieh polish it up into an op-ed for a newspaper.
	Monday, January 11, 2010 at 10:36:47 mst Comment ID: #2 Name: PDS E-mail: pdspds(at)gmail.com What if the Trillion dollars we borrowed from our grandkids were not spent on this kind of BS, but had instead been "spent" in the form of a tax cut to those few of left who still pay taxes? In other words, a "tax cut to the rich"? Probably two results: one, the economy would be humming right now and two, more troublesome to both parties, people would see what happens when a 40% tax anvil is taken off the shoulders of those being mooched to death.
	Monday, January 11, 2010 at 12:28:06 mst Comment ID: #3 Name: Galileo Blogs E-mail: rayniles(at)rcniles.com URL: http://galileoblogs.blogspot.com Diana, Good point and good article excerpt. I was trying to imagine a scenario where an electrician performs some faulty wiring in my home which shorts out and burns down my home. He just shrugs and says it was an unintended consequence, with the implicit plea that I should not condemn him for it. After all, he tells me, he intended to wire my home properly. Your article also reminds me why the institution of bankruptcy is such a necessary and good thing. I will plug my post on it: http://galileoblogs.blogspot.com/2009/03/case-for-bankruptcy.html -GB
	Monday, January 11, 2010 at 12:28:12 mst Comment ID: #4 Name: Galileo Blogs E-mail: rayniles(at)rcniles.com URL: http://galileoblogs.blogspot.com Diana, Good point and good article excerpt. I was trying to imagine a scenario where an electrician performs some faulty wiring in my home which shorts out and burns down my home. He just shrugs and says it was an unintended consequence, with the implicit plea that I should not condemn him for it. After all, he tells me, he intended to wire my home properly. Your article also reminds me why the institution of bankruptcy is such a necessary and good thing. I will plug my post on it: http://galileoblogs.blogspot.com/2009/03/case-for-bankruptcy.html -GB
	Monday, January 11, 2010 at 12:43:28 mst Comment ID: #5 Name: Andrew Dalton E-mail: andrew.s.dalton(at)gmail.com URL: http://witchdoctorrepellent.blogspot.com "I was trying to imagine a scenario where an electrician performs some faulty wiring in my home which shorts out and burns down my home. He just shrugs and says it was an unintended consequence, with the implicit plea that I should not condemn him for it. After all, he tells me, he intended to wire my home properly." The conservatives' reply would be that you would have been safe following tradition, rather than messing around with that newfangled electricity.
	Monday, January 11, 2010 at 18:04:57 mst Comment ID: #6 Name: Jason Crawford E-mail: jasonc(at)alumni.cmu.edu URL: http://jasoncrawford.org To paraphrase Francisco d'Anconia: "When we'll see men dying of starvation around us, your intentions won't be of any earthly use to save them. And when you'll scream, 'But I didn't know it!'â€"you will not be forgiven."
	Monday, January 11, 2010 at 19:28:48 mst Comment ID: #7 Name: Jim May E-mail: seerak(at)gmail.com The so-called "Law of Unintended Consequences" is a logical outgrowth of pragmatism's willful refusal to think in terms of principles. If one's eyes are closed, they figure, they can't be held responsible for the failure to notice the wall. They sometimes refer to it in jest as a "law", but the real joke therein is lost on them. The idea that one is morally responsible for cognition and failures thereof, is largely unique to Objectivism AFAIK -- and it's a big, big source of mainstream hostility to us.
	Monday, January 11, 2010 at 19:49:00 mst Comment ID: #8 Name: Diana Hsieh E-mail: diana(at)dianahsieh.com URL: http://www.dianahsieh.com/blog Jim -- Actually, that's a point about which Aristotle was quite clear -- via the concept of "voluntary ignorance." See the Nicomachean Ethics, Book 3, Chapter 1-5. Or see my dissertation, whenever I post that. :-)
	Tuesday, January 12, 2010 at 14:02:30 mst Comment ID: #9 Name: Bob Gifford E-mail: bob.gifford(at)gmail.com Good article. I saw somewhere that the amount spent up to now averaged about $800,000 per house "saved" from foreclosure, or over four times the average price of a house in the U.S. We should never forget the corruption that accompanies a federal program. People have compared Obama with FDR, and this is another way Obama and FDR are alike. Both know how to spend money to keep themselves in power.
Post Your Comment
Name or Handle: E-mail: URL:   Remember Me   Comment:   No HTML is allowed. URLs will be automatically converted into clickable links. Commenters are welcome to clearly state their own views, as well as to criticize opposing views and arguments. Unjust personal attacks are not welcome. The NoodleFood comments are not a general discussion board. Do not post random questions or comments, except on the designated "open threads" posted on Wednesdays and Sundays. To weed out spammers: 5 plus 7 equals 308250879494391378