Earlier this week, I took a whack at Hillary Clinton, for calling for steps to deal with the subprime market mess that stepped perilously close to a bailout. Earlier this week, the Bush administration made a move that is maybe one step further back from a bailout.

Michelle Malkin points to a commenter on Hillary’s campaign blog: “Remember that many other prospective homebuyers stayed on the sidelines, saving up for a downpayment and not shoehorning themselves into loans they couldn’t afford beyond the intro period. They’re still waiting to participate in the American dream of homeownership. So they get punished for being responsible and the high risk-takers get bailed out?”

JunkYardBlog: “Count me, a prospective member of the ownership society, among the victims of the bailout. I’m going to be looking for a house very soon in an expensive area. I’ll need to take out a mortgage, but I’m not going to take out a mortgage I can’t afford, even though this bailout creates a moral hazard in favor of doing so–which puts me at a disadvantage versus people who do and did. Every time they overextend themselves to buy a house, they nudge up the price of all the other houses in that neighborhood. And they nudge them right up out of reach for most families who don’t have double incomes.”

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Phil Klein: “It is hard to think of a worse signal to send the free market economy than if you take out mortgages on houses that you cannot afford, the government will rescue you. Bush said, “We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could not afford.” Of course, the very act of making sure borrowers do not default, effectively bails out lenders. And obviously people who are having trouble paying their mortgages couldn’t afford their houses. So his statement is completely vacuous.”

A reader asked whether I was among “those too for whom an ideological point is so important that they don’t care if the whole country suffers.” It’s not an ideological point.

Millions of Americans saw the value of their houses increasing dramatically starting, in, oh, 2000, as the dot-com boom popped and suddenly real estate seemed like a safer investment than stocks. As real estate became perceived to be worth more, more people wanted to get in on what they thought was a hot market. (Think of the number of people who bought second homes.) It accelerated, as “flipping houses” suddenly became a common enough trend to warrant its own shows on basic cable. (Building a second house “on spec” hoping to sell it for a big profit even became a storyline on The Sopranos.) In Northern Virginia, some residences saw the value of their home increase $100,000 per year for several years in the property tax assessment. People took out home-equity loans, delighted to find that they were much wealthier than they thought because they owned property.

But the thing is, your house is only worth what somebody else is willing to pay for it. For all the folks who are shocked and horrified that the value of their house is down, the truth is that you haven’t lost something you had; it’s that you never really had that wealth in the first place. Your house was worth a million dollars so long as somebody was willing to spend a million dollars to buy it. Now that somebody’s only willing to spend $800,000, that’s what your house is worth.

A lot of people bet heavily that house prices would only go up, even as demand started to slow (there are only so many home buyers out there willing to move to a given area) and as supply exploded (I don’t know about your neck of the woods, but condos are cropping up like weeds around the Washington D.C. metro area). If you live in a house long enough, chances are you’ll be able to sell it for a profit, but there are no guarantees in life.

The media and various folks are acting like declining prices are a crisis. They’re not. They’re a reaction to a bubble, and more than a few see government action as a raw deal for the responsible.