The government almost always intervenes on behalf of the suppliers, not on behalf of the consumers. So it is in this case. The justification has been that there must be orderly markets for homes. This means keeping sale prices higher than the free market would produce.
Let's not kid ourselves. This bailout is a subsidy to the suppliers of homes. It is a subsidy to the few surviving homebuilders, to people who own homes, and to people who may want to sell their home to buy an even bigger home later on.
This is an assault on home buyers.
The government bails out to disguise the fact that government programs are the reason the bail outs are necessary. Gary North explains.
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