Barney Frank Makes the Case For Artificially High Home Prices

Congressman Barney Frank in The Washington Post makes the case for artificially high home prices:

Some will object that this is "bailing out" people who made mistakes.

Yes, some people borrowed imprudently. On the other hand, though, it is clear that many of the people in this situation were misled, were deceived or were in other ways the victims of unfair lending practices.

Refusing to respond to their plight would not only be lacking in compassion but would also be bad economics. Everybody -- homeowners, lenders, neighbors, indeed our entire economy -- is worse off when a foreclosure occurs instead of a prudent write-down and appropriate refinancing.

"Everybody" isn't better off with government propped up home prices,many renters in places like California couldn't afford to buy a home.The cure for high prices is lower home prices.Those who don't own a house benefit from foreclosures.One big loser in lower home prices is greedy local governments who get more and more tax revenue from higher and higher prices.So,Barney Frank knows not everyone is a loser from lower home prices.Barney Frank(Democrat-Fannie Mae).