The political risk of a housing bailout

By: HousingWire staff
May 12, 2008 7:44 AM CST

The Wall Street Journal ran an interesting story Monday looking at the flip-side of a proposed housing aid package being pushed aggressively by Congressional Democrats — namely, that there are a pretty good number of people that don’t want to see Federal dollars used to help troubled borrowers.

It’s a polarizing question, according to the WSJ:

The public is split. “If you’re the Secretary of Bailouts, and people come in and show you that they’re worthy of being helped out, everybody will have a story,” says Robert Krance, 64 years old, a Houston physician and McCain backer. “I don’t know how you can create a reasonable, enforceable method for deciding who should be helped.”

A hands-off approach by the government is “the right thing to do,” agrees Jeff Cohu, a 40-year-old professor attending a McCain rally last week. “The market will readjust faster and better than the government could.”

A Gallup Poll in late March found that 56% of Americans favor government intervention to prevent people from losing their homes because they can’t pay their mortgages, while 42% oppose it. The partisan divide was sharp: 58% of Republicans opposed intervention; 71% of Democrats and 55% of independents supported the idea.

We’ve interestingly seen housing and mortgages move to the back-burner for the Presidential wanna-bes from both major parties. It’s strongly polarizing results like this that suggest the issue won’t be on the back burner for very long — and that any Presidential candidate ignores housing policies at their own peril, regardless of party affiliation.