'This Week': George Will vs. The World on Housing Bailout

     George Will must have known to eat his Wheaties before going on ABC’s “This Week” on March 30.


     Will, a conservative columnist, was decidedly outnumbered by three liberal commentators in a roundtable discussion about the economy on the show hosted by George Stephanopoulos – who worked for former Democratic President Bill Clinton.


     The panel included Robert Reich, Clinton’s former Labor Secretary; Paul Krugman, an openly liberal professor of economics at Princeton University; and New York Times columnist Donna Brazile, Gore’s 2000 presidential campaign manager.


     Against those odds, Will criticized Democratic presidential hopeful Hillary Clinton’s plan to bail out homeowners facing foreclosure. Will was the only one of the four panelists who defended the notion that free markets operate efficiently without more interference from government.


     “[T]here are 55 million mortgages in this country – 94 percent of which are being handled just fine, not effortlessly. Families are saving and sacrificing to get by,” Will said. “And they will not be amused, that 94 percent, if the other 6 percent get by some other means a bailout. Now, Mrs. Clinton’s answer – in the command-control model of Democrats – is price controls. That is, control the price of money by freezing for five years the mortgage interest rates.”


     Will referred to government encouraging lenders to give mortgages to low-income borrowers as one of the reasons for the housing crisis. But Krugman answered with the media’s usual template – blaming lenders and placing no blame on irresponsible borrowers.


     “I don’t blame you [referring to George Will], but there’s a truly reprehensible thing, where [CEO] Angelo Mozilo and Countrywide (NYSE:CFC) went out and did this essentially predatory lending to people, giving them complex mortgages they didn’t understand – the most complex mortgages to the least sophisticated buyers,” Krugman said. “And now they’re saying, ‘Oh, we were forced into doing it because it was affirmative action.’”


     Will challenged Krugman’s logic: “What is mysterious about the phrase ‘variable rate?’” Will asked.


     Reich responded by saying everyone – including taxpayers – should shoulder some of the responsibility for the irresponsible borrowing and lending that caused the turmoil.


     “Everybody is going to take a hit, George, and everybody should take a hit,” Reich said.