- The Washington Times - Wednesday, December 23, 2009

ANALYSIS/OPINION:

President Obama’s constant demands that America’s banks begin a new surge of lending clearly shows that he has no idea how our banks got in the predicament in the first place (“Banks focus on covering losses,” Page 1, Monday).

The banking institutions have dropped the ball on occasion, but their sole purpose is to make money for their investors. To do that, they must base loans on a client’s ability to pay the loan back in normal circumstances. Enter the Democratic Party, led by Rep. Barney Frank, Massachusetts Democrat.

The Democrats’ plan, called “red lining,” required banks and other institutions to make loans to millions of people who had no hope of paying it back. Giving a mortgage loan to a family making $35,000 a year for a $700,000 home is foolish. Ergo, another feel-good program strikes out at the expense of American taxpayers.

In 2002, the Bush administration alerted Mr. Frank and other Democrats that Freddie Mac and Fannie May were in deep trouble and that the situation would get much worse. With a wave of the hand, Mr. Frank and others dismissed the warnings, saying that all was fine.

Affording a home is an evolutionary process based on the growth of the individual through education and work experience. First comes an apartment, then a small house and finally a larger one if the means allow. Each of us must earn his way in the world. A free ride is a one-way trip to disaster.

WILSON FARIS

Gaithersburg, Md.

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