The market for housing has been such a strong influence on the larger economy for so long that people are grasping at all kinds of straws to keep it viable. So now, according to an NPR news report, we have the National Association of Home Builders (NAHB) looking to Congress for help in keeping the home building going. This, at a time when there is a glut of homes on the market. Let’s see, we have too many homes so…let’s build some more!

The idea being proposed is to give home buyers a tax credit (as much as $22,000) for purchasing a new home and throw in some subsidies that would effectively make the interest rate on the purchases about three percent. One analyst puts the cost of such a program at hundreds of billions of dollars. When we add this to the mounting price tag associated with all the other bailouts we begin to see that at some point what may be good for business, is no longer good for taxpayers. And whether we are in business or not, we are ALL taxpayers.

It’s understandable and completely expected to try to fix things when your back is against the wall. But for many years home builders have enjoyed great profits and steady work. How much of that money has been squirreled away for a rainy day? Apparently not enough. How much of that money is the result of spending millions on lobbying against past legislative efforts that might have helped minimize the current economic doldrums?

Just related to the Fannie Mae and Freddie Mac debacle consider how NAHB supported those things that would keep the frenzied pace of building going, even in the face of mounting evidence the mortgage behemoths were on a collision course with failure.

In 1998 the NAHB successfully lobbied to increase the values of homes that Fannie could insure, a change that Fannie itself was opposed to.

In April of 2005 when Congress was trying to toughen oversight of Fannie and Freddie, and restrict the sizes of their portfolios, (so tax payers wouldn’t be over-exposed), the NAHB said it would oppose any legislation that would reduce Fannie and Freddie’s capacities.

Then in December 2007 NAHB came out against a Fannie Mae effort to shore up its revenues by charging a fee for loans purchased by lenders. NAHB also conveniently reversed its earlier position and called for more, and quicker, federal oversight of the organization.

Of course let’s not forget the help home builders have already received like the ability to write off losses from 2008 and 2009 to offset profits.

At what point is the health of the nation considered when you advocate for one piece of legislation or another? Is keeping the money flowing the only criteria? Where is the barometer that a lobbying organization uses to make sure it isn’t just flitting from issue to issue and loosing sight of the big picture? By one estimation 34,000 of the nation’s home building businesses will fail during this economic event. That’s really bad news, but it’s quite possible they are not blameless for their collective fate. Everybody is being visited by this disaster and its sad to see the groping and grabbing and narrow-minded solutions that focus on filling the lifeboat with treasure even as the ship sinks.

We aren’t going to be able to build our way out of this one. This is the time to shore up what we’ve got, weather the storm, and learn to make better decisions when the going gets easy again.

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