Here’s a great little video on the government’s role in the housing crisis.

Click image to see full size.

Yep.

The New York Times, that stalwart mouthpiece for all things Democratic (as in the Party of “Now What?”) has a story today about the disappointing performance of the Making Home Affordable program.

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.

“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.

So we’ve managed to kick the can down the road a little ways while the problem gets bigger and more unmanageable, government doing what government does best: gumming up the works.  Looks like it’s time to invoke W.C. Fields again: “Take the bull by the tail and face the situation.”

Government has no business being in the mortgage industry, nor, should Congress in all it’s asinine wisdom decide to bail out all these distressed home owners by buying up their bad mortgages, the housing business.  When I was in High School I had the opportunity to drive a 1953 Ford that had this disquieting quirk: you had to turn the steering wheel fully 1/4 turn before it would engage the steering gear and the wheels would respond.  I kept it mostly inside the lines, but it I was fishtailing a great deal until I got the hang of it.  It’s a wonder I didn’t wind up in a ditch or worse.  The bigger the bureaucracy the longer it takes to respond to inputs, the wilder and more out of control it gets.  When that bureaucracy is the government, it’s drunk too.