Over at U.S. News and World Report, James Pethokoukis suggests that the mortgage meltdown might hand 2008 to the Democrats.

I’m not sure I agree. Bafflingly, I find myself in… in… partial agreement with… with… Paul Krugman today — God, it hurt to say that! But Krugman, in a rare moment of lucidity, notes all the voices calling for a bailout, “for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds” and correctly labels that idea as saving bad actors from their misdeeds.

Sen. Chris Dodd thought out loud about a bailout fund, and the government lending money to people whose problem was that they couldn’t pay their mortgage. Hillary’s plan involves some not-so-bad proposals, but also a ”relief fund” that would be simultaneously too small to make much of a difference and simultaneously establishing a precedent that the taxpayers should bail out those who buy more house than they can afford.

He notes that calls to “curb abusive lending practices” do nothing for the problem that already exists.

Krugman wants the government to step in and arrange “workouts” instead of “bailouts” – that it’s better to rework the terms of mortgages and keep the lendee paying what he can than for foreclosure and the lender to try to sell the home in a thoroughly bad market. That would work in some cases, but the problem is, some of these lendees are sitting in enormous houses, with very little capacity to pay – they somehow managed to secure jumbo mortgages with no money down, with no verified assets or verified income.

Rob Long has a great column on the mortage mess in the latest issue of National Review, citing “Flip This House!” reality shows as a red flag of trouble.

If the Democrats propose anything that gives off a whiff of taxpayer bailout, I think that could easily backfire on them – they would justifiably be accused of trying to buy votes by bilking taxpayers to save the irresponsible from the consequences of their actions.