Homeownership is Not a Mitzvah

The New York Times today erupted in righteous fury over the President's plan to help subprime borrowers: http://www.nytimes.com/2007/12/07/business/07mortgage.html?pagewanted=1&_r=1&hp. The Times' reaction is predictable, and wrong.

I have followed the U.S. housing bubble for some time now, and I still have no idea what the fuss is about. Part of the problem is that I do not, as many fellow Americans seem to, regard homeownership as a right akin to life, liberty, and the pursuit of happiness. I do not see home equity as a necessity. And so I do not feel much sympathy for people who claim they have been "shut out of homeownership forever" or been "priced out" of particular neighborhoods.

It's not clear to me why the government should do anything to save 500,000 subprime borrowers from their own folly. People, it's very simple: if you can't get a mortgage except by taking on a 2-year ARM at double the going interest rate, it's a sign that you can't afford to buy a house. Or at least, that you can't afford to buy s big and snazzy a house as you had hoped to. Tough. That's life.

I see even less reason for the government to step in to save lenders who have made poorly thought-out loans to risky borrowers. About a year ago, I saw a film called Maxed Out, which was about Americans' addiction to debt, at both the personal and the national level. The film made clear that a lot of these subprime lenders are nothing more than gussied-up loan sharks, and that a lot of people are getting mortgages without any documentation whatsoever and just blatantly lying about their incomes. Gee, what a surprise: all of those cashiers at Home Depot who took out $500,000 mortgages were not really making $60,000 a year. I say let the industry stew in its own juice.

It's amazing how much this American attitude toward homeownership and saving differs from the way things are done in Taiwan. On this side of the Pacific, saving money is still a priority for most people. When Taiwanese think about "giving the best" to their children, they think of bushibans like the one that employs yours truly, not of giant back yards in the suburbs that--let's face it--are really more to relieve parents from the strain of bored children than they are a necessity for those children's development. In Taiwan, people often forego larger houses and better neighborhoods specifically because they want to give their children the best education.

But what about these poor souls who will be forced out of their homes through foreclosure? The media talks and writes as if they were facing the street. In reality, the vast majority are simply facing a future as renters--the same life I have led for three years now.

It's not the government's responsibility to help protect your ownership of something you knew you couldn't really afford in the first place. That we think it is suggests how far Americans have given up on the idea that individuals have any free will or any responsibility for their own actions.