In the midst of mass hysteria, calls for a taxpayer-funded bailout of wayward borrowers, and chatter about increased regulation, a writer and former communications director for a subprime brokerage sees through all the garbage. In a column (subscription required) in today's Wall Street Journal, Rob Asghar writes that "I blame the borrower. Yes, on the eve of an election year, it is bad politics and bad manners to say that the "little guy" deserves the brunt of the blame for the global subprime mortgage crisis. But I blame him nonetheless"

He brings up an important point. Predatory lending tactics notwithstanding, whose fault is it really if someone bought a home that they couldn't afford and is now having trouble making payments? Aren't a lot, if not most of these borrowers facing foreclosures victims of their own excess, and are they really deserving of sympathy?

Asghar's column makes me wonder how this would be handled differently in a non-election year. Even the Republican Party -- supposedly the party of free markets and capitalism -- hasn't really seen a single Presidential candidate stand up and say "This is a case of irresponsible borrowing and stupid lending, and that doesn't warrant government intervention."

I know -- there are many cases where people were simply defrauded, and many subprime lenders exploited naive borrowers. But in cases where laws were broken, state attorneys general should go after the bad guys. And I hate to say it, but a lot of borrowers we are now talking about helping out are having trouble affording their mortgages because they, in concert with unscrupulous mortgage brokers, lied about their incomes on loan applications. Some studies have estimated that 50% of recent foreclosures are a result of mortgage fraud -- And we're talking about bailing those people out!

I've always thought of myself as a populist, but a bailout specifically target at being who have a history irresponsible lending, as Tracy Coenen explained on WalletPop, isn't populism: It's stupid.


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