Ben Stein: Bail Out Homeowners, Not Banks

I sometimes love Ben Stein*.
He posted a vitriolic commentary in the New York Times against the bailout plan:

Maybe the bailout should not be of the banks at all, but of homeowners themselves. Maybe if we make the government the buyer of last resort of homes, we will stabilize the markets, stabilize the debt associated with the markets and take the gain out of the credit-default swaps for the speculators. Yes, price would be a huge issue, but so it is for Mr. Paulson’s plan for buying debt from banks.

Why not? We do it for farmers.

I received an email forward in the same vein authored by advertising executive TJ Birkenmeier. It sounded good at first, but a math error takes all the wind out of his argument.

Still, I wonder–would it be feasible for the bailout plan to be shunted to individual citizens rather than a massive insurance agency and series of banks? It would be a massive welfare (read: Socialist, Communist, whatever) move. It would fuel Main Street’s sense of entitlement, which would be bad for the bankrupt government, but also potentially good for consumption.

Just one quick fix, and that’s it. Failed institutions go bankrupt; people are bolstered back into consumption mode. They loan money to one another if big banks’ credit dries up. They start to rebuild the institutions they lost. It doesn’t sound half bad.

Would such a thing work economically? Thoughts?

*I don’t agree with some of his views, so can’t indiscriminately love him.

  • b

    We are programmed that giving money to peopl eis welfare and just horrible for any self-respecting human but HELLO? what is $700 billion (for a minimum) to major companies so they can pay off their overpaid execs but another form of welfare and frankly i don;t think they need it. Especially while Joe down the street is trying to make it work with his home, family etc. Will the big companies keep their family well or just sell off the bits for more profit after the American people give them a great BIG welfare check?

  • As long as there were strict constraints and regulations on the process, I feel that it could do some good! I’m only worried about the amount of people who may try to cheat the system for their own selfish gain.

  • TheDoctor

    I laugh at people who suggest they are “worried about the amount of people who may try to cheat the system”. Isn’t that what the criminal element that runs these banks have done. From the S&L crisis to this scam of a bail out, no one, but no one cheats the system better then an Ivy League educated 7 plus figure a year CEO’s and their boys. Corporate welfare is the most costly welfare and what have you gotten from it, a growing unemployment rate, record foreclosures, stolen 401k $$, and declining incomes. Ben Stien is right!

    Give the money to the people. Is it so crazy to give money to the people who have elected you? Welfare to a few, give me a break have you not checked the value of your house lately? We are all impacted by the foreclosure housing market. These jerks haven’t simply taken money from my 401k, they haven’t just tied up the credit market, no they have taken value from my home that I pay for each month. The sub-prime market they created has nuked one of my most valuable assets, my home. So Ben Stien is right we need to stabilize the housing market mess they have made, and let’s see how things flow from the bottom up.

    Let the progressive nation be born, and loss the backward conservative view that holds this nation back. Other nations are surpassing us in every area and we are content to remain in the broken pass. I still can’t understand why seeming educated people are willing to work more hours for lower wages then any other advance industrialized nation and then pay the oppressors for oppressing them. Do we enjoy being victims or is just your blind excitement for wallowing in your own average mediocrity that doesn’t allow you to see that giving money to the same people who got you into this mess might not be a bright idea.