Yes, the politician commenting on the $25 billion mortgage industry settlement was guilty of grandstanding. No, we're not referring to Republican Oklahoma Attorney General Scott Pruitt.
The settlement involved the federal government, 49 states and five major mortgage banks. Oklahoma was the cheese that stood alone. Pruitt said the state will have its own version of the settlement that will essentially have the same result.
We won't argue with Pruitt foes who call this political posturing. He's capable of defending himself. Those same critics, though, won't be quick to finger Barack Obama for the same offense.
Pruitt makes no bones about his activism against what he considers federal overreach in many areas, as opposed to the anti-business activism engaged in for years by liberal Democrats holding state attorneys general offices.
Oklahoma opted out of a health care exchange offer last year, when the Obama administration wanted to redistribute taxpayer money from Washington to Oklahoma City and other state capitals. The people themselves voted to opt out of Obamacare. Pruitt opted out of the mortgage settlement and thus made himself a target of scorn or praise, depending on one's perspective.
The larger issue is what motivated the settlement. The administration was grandstanding in branding it a federal rescue of distressed mortgage holders. Obama has vowed to do even more. The settlement is part sop, part shakedown. It could ultimately restrict lending or make borrowers more dependent on Uncle Sam.
“The politicized lending that led to the housing crisis has turned into politicized settlements,” The Wall Street Journal wrote, “which will in turn lead to more politicized lending.”
The administration's goal isn't just putting a bailed-out automaker's car in every garage. It also wants to put a pot of federal chicken feed into every home loan. “However this helps the politicians,” the Journal said, “it won't revive the housing market.”