L.A. Times sees the big bailout coming

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The L.A. Times finally warms to the ‘big bailout is coming’ story this morning, reporting in a front-page story, ‘Housing bailout gains backers.’ The story by business ace Michael Hiltzik summarizes recent developments nicely and concludes the Barney Frank plan is ‘perhaps the one with the most political clout behind it.’

Agreed: When Congress is through with it, the Frank plan will become a Christmas Tree in July bearing all manner of goodies for the homebuilding industry (tax incentives to buy now!), local governments (money to create new bureaucracies to buy and manage foreclosed properties!) and on and on. The biggest giveaway will likely be to the biggest industry, financial services, which will unload bad mortgages at subsidized prices and probably get massive tax breaks on past income.

The story repeats one of those Washington half-truths (‘border security!’) that politicians seem to believe will somehow become true if only repeated again and again: ‘Any relief program will have to be carefully fashioned to focus only on deserving homeowners whose financial ills are no fault of their own.’

A worthy but unrealistic goal; anybody in need of government help at the moment -- borrowers, lenders, builders, investors -- is there at least in part due to their own financial mistakes and miscalculations. No one’s in this sinking boat through ‘no fault of their own.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.