In the latest missive from the White House, David Plouffe, a senior advisor to the president, writes:
For many of us, buying a home is about more than a roof over our heads. It's the place where we'll watch our kids grow up and an investment that will guarantee our long term financial security. There's a reason that a home is an essential part of the American dream…
[The President's mortgage refinancing plan is] the kind of change that can have an outsized impact on the entire country. With a little extra money each month, our friends and our neighbors will be able to do more for their families. That means stronger communities and a stronger national economy.
So even if you don't own a mortgage or don't need to refinance, it's important to add your voice.
We need to show that this is the kind big, national priority that transcends petty partisanship. Republicans and Democrats alike own houses, and they call each other neighbors. It will mean good things for all of us if every responsible homeowner can get some relief.
So speak out beside President Obama. Tell us why you support refinancing, and we'll make sure your story resonates here in Washington and around the country.
Nick Gillespie explained how we got to this point in the first place:
Our story thus far: Thanks to a combination of tulip-bulb-style mania among investors (either stupid or greedy, depending on your predilections), government policies (mortgage-interest deductions for two homes, subsidized loans, giant agencies instructed to buy up all private mortgages, etc.), and Fed policy (keep interest rates as low as possible for as long as possible), record numbers of Americans bought houses (read: took on debt), typically at inflated prices (partly due to other government policies that restricted supply).
You know the next part: The housing bubble popped, leaving lots of people underwater (owing more than their houses are worth at the moment) and triggering a financial crisis (panic probably a better term) that somehow was solved by bailing out big financial houses in such a way that there are fewer of them but they are bigger and more powerful than ever.
After spending most of 2011 in a kind of kabuki theater over government funding, the federal debt limit and expiring tax breaks and other assorted minutiae, President Obama shifted into election mode with the "We Can't Wait" for Congress campaign, and more mortgage refinancing became a part of that, so though this e-mail comes from the White House, it's hard to read as other than a campaign letter.
About 65% of Americans own their own home, a historical low, even though the federal government has spent decades propping up "affordable housing." While David Plouffe may claim only more government intervention (even in the form of seemingly "free money" for the economy) can alleviate the housing crisis, there's pretty solid evidence government is actually the culprit.
The cult of homeownership also makes the labor force less mobile, having the effect of limiting opportunities for employment. It is not a source of wealth creation, despite the White House's "investment" refrain. The government's insistence that homeownership is essential to the American Dream is misguided and even destructive, and above all, wrong, David Plouffe's invocation of some kind of Voodoo economics where refinancing mortgages and further distorting the housing market will lift all boats notwithstanding.