A House, Not A Portfolio

Rob Horning has some sharp words for those in danger of foreclosure:

Shelter is something you consume; it’s not an investment. Bailing out homeowners is rewarding the people who treated housing as an investment and not a consumption good, a fulfillment of personal need. Preventing foreclosures is often a matter of rescuing people from their failure to properly assess risk, not from some unforeseen natural disaster. Let’s not pretend this is any different from bailing out imprudent or inept investment bankers.

Every time the government protects someone or some company from the consequences of their own economic profligacy, the chances of future profligacy increase. It's vital that the government let the Big Three automakers go down, and vital that only minimal help be given for those so greedy or so stupid that they took on loans they had no way to pay off.