Good Sense on the Housing Market

Robert Samuelson makes a good argument against Barney Frank's proposal.

This is a pet peeve of mine. Glaeser calls home buyers "owners". This is the wrong label. An individual who has little or no equity in his home is not an "owner". He is a borrower and the owner of the property is the entity that paid for it - the lender.

He basically thinks that people who bought homes they can longer afford should be subsidized by taxpayers. So, even if taxpayer Joe would never ever lend someone that much money on such loose terms, the government will act as Joe's agent and loan Joe's money on his behalf, against Joe's will. If the borrower manages to pay off the mortgage, the borrower gets the entire benefit of owning the asset and Taxpayer Joe doesn't get adequately compensated for his risk. If the borrower stops paying the mortgage, Taxpayer Joe eats the loss. Anyone see a pattern here?

If Glaeser thinks negative expectancy bets are such a great idea, why doesn't he get a bunch of like-minded folks to form a private consortium which buys these mortgages instead of forcing Taxpayer Joe?