Rick – A bunch of readers emailed me about that line, it was part of the debate I initially missed. Obama said:
There is no doubt about it. Not only — Even if we get all $700 billion back, let’s assume the markets recover, we’ holding assets long enough that eventually taxpayers get it back and that happened during the Great Depression when Roosevelt purchased a whole bunch of homes, over time, home values went back up and in fact government made a profit.
It’s been a while since I studied this stuff, so maybe I’m missing something (and I’ll try to read-up today). But I think this is another great example of how the New Deal serves as the creation myth of liberalism. If something is worth doing today, FDR must have done it back then. Roosevelt did establish the Home Owners Loan Corporation and the Federal Housing Administration under the National Housing Act. The government did establish a whole system of mortgage insurance and mortgage refinancing — often attacked from the left as a bailout of the big financial interests (though I think liberals are right to say it helped individual homeowners as well). But as far as I know, the government never bought homes, never mind a whole bunch of them. I’d be curious to hear from readers who might know if Obama could have had something else in mind.