Sure, Congress Has Principles
Robert Nozick’s “Anarchy, State, and Utopia” occupies a cherished place on my bookshelf. In this Forbes.com editorial, Cato’s Richard Epstein cites Congress’ lame-brained and ultimately doomed push to manufacture increased rates of home ownership as an example of what Nozick calls “patterned principles of justice.” Here’s Epstein:
Believers in patterned principles hold that there is some preordained social order that is more just than others. Accordingly, the function of the state is to use the levers of powers to manipulate behavior to achieve the desired outcomes. These patterned principles stand in opposition to historical principles of justice, which are content to establish the rules of the game and then let the legal moves by individual players determine the social outcomes. For Nozick, the key rules were rules of justice in acquisition (to set up the initial property rights) and justice in transfer, whereby those rights (and others derived from them) could be exchanged or combined through voluntary transactions.
Further down:
Congress, alas, is a pattern junkie. In his perceptive Wall Street Journal op-ed, How Government Stoked the Mania, Russell Roberts noted that the current congressional fixation called for a relentless increase in homeownership relative to renting, with certain minimum fractions allocated to low-income families. Pray tell, what patterned principle dictates that we should have 12% of all mortgages made to low-income borrowers in 1996, 20% in 2000, 22% in 2005 and 28% by 2008?
And finally:
The grand objectives articulated by Congress–and to be fair, by Republicans who preach the virtues of the “ownership society”–are not freebies that can be satisfied at no real cost. Quite the contrary. Once Congress set in place a destructive lending policy, we could count on private parties to issue bad loans from which they profited, knowing that dear old Fannie and Freddie would happily pay face value for paper that everyone knew was worth a whole lot less.
But Congress lived in a dream world. It forgot that the quality of the paper would deteriorate as its ambitious social objectives let its underwriting go south. So, too late in the game, we learn from yet another case where Congress should have done good by doing nothing at all. Let people rent or buy in unsubsidized markets and then watch with supreme indifference what residential patterns emerge. That distribution would have been a lot less toxic than the brew generated by our fevered political leaders. So says our frustrated libertarian.
And so says this one. This echoes my point in this earlier post. Why is “ownership society” a good thing?
Wait, this is a democracy, and a “good thing” is what the majority says it is, you say? Democracy is a sheep and two wolves voting on what to have for dinner. We live, by the grace of God, not in a democracy, but a constitutional republic…
…if we can keep it. Color me skeptical.
