Dominic Holden

The Seattle Times reported today that a state task force has made recommendations to the governor on reducing predatory lending.

Among the recommendations: banning aggressive sales tactics that “steer” people into more costly loans than they otherwise qualify for; making mortgage fraud a felony; and limiting other onerous payment options.

But I’ve heard plenty folks say that the state shouldn’t be saving people’s ass—it’s people’s own damn fault. Here’s Mike Huckabee on NPR…

But what we don’t need is a government bailout. That is not the purpose of government, to prop people up from every poor decision they make. In fact, when you do that … whether it’s in the world of finance or the world of drug addiction … it creates an enabling codependency. It’s the last thing that really helps people.

Right, people should be punished for making bad decisions. Know the law. Be educated. Make the right choice or else. I get that principle. But here’s the problem, Mike: We don’t teach people the skills they need to make the educated choices. Schools don’t teach students how to balance a checkbook, let alone how to calculate interest payments on multi-thousand dollar investments. Schools practically ignore the law—hell, most American high-school students don’t even know what the First Amendment is. And your drug analogy — on which we educate kids more than law or finance — we fuck that up so bad that the kids who go through D.A.R.E. are more likely to use drugs.

So this mess is of our own making. And while Gregoire’s panel has made some decent recommendations to bail out borrowers, it misses the point.

Back to Washington’s task force:

But the suggestions likely are too late for 17,000 households statewide that are more than three months behind on their mortgages as of Sept. 30.

“The horse was out of the barn already,” said task force Chairwoman Carol Nelson, CEO of Cascade Bank in Everett. “We asked what rules, laws and regulations can you put together to make sure you’re not in this situation 10 years from today.”

Actually, we’ll be in this situation forever if our only strategy is damage control. Let’s hope Huckabee’s wrong about naive borrowing and drug abuse being the same; no amount of drug education can wipe out drug abuse. An investment in teaching some basic mathematical and contract-writing skills are the recommendations we need to keep us out of this mess for the long haul.