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Good Things

By Thomas Sowell - July 19, 2011

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There is no question that there are benefits to home ownership. And there should be no question that there are costs as well. But costs get lost in the shuffle.

Among the things that Washington politicians of both parties did for years was come up with more and more laws, rules and pressures on private lenders to lower the qualifications standards required for people to get a mortgage to buy a home.

It was a full-court press from Congressional legislation to regulations and policies created by the Department of Housing and Urban Development and the Federal Reserve, not to mention the buying of the resulting risky mortgages by Fannie Mae and Freddie Mac from the original lenders -- and even threats of prosecution by the Department of Justice if the racial mixture of people who were approved for mortgages didn't match their expectations.

The media chimed in with expressions of outrage when data showed that black applicants for mortgage loans were turned down more often than white applicants. Seldom was it even mentioned that white applicants were turned down more often than Asian American applicants.

Nor was it mentioned that white applicants averaged higher credit ratings than black applicants, and Asian American applicants averaged higher credit ratings than white applicants -- or that black applicants were turned down at least as often by black-owned banks as by white-owned banks.

Such distracting details would have spoiled the story that racial discrimination was the reason why some people did not get the Good Thing of home ownership as often as others.

Even after the risky mortgages that were made under government pressure led to huge bankruptcies and bailouts, as well as disasters for home owners in general and black home owners in particular, home ownership remains a Good Thing. The Justice Department is again threatening lenders who don't lower their standards to let more minority applicants get mortgage loans.

Higher miles per gallon for cars is a Good Thing in politics, even if it leads to cars too lightly built to protect occupants when there is a crash. More students going to college is another Good Thing, even if lowering standards to get them admitted results in lower educational quality for others.

Too much of a Good Thing is bad.

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Copyright 2011, Creators Syndicate Inc.

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