Chris Adams

From the "We need a credible opposition party" file: Mitch McConnell wasn't laughed out of the GOP for claiming that the stimulus bill is flawed because it needs more cheap mortgages.

Senate Republican leader Mitch McConnell on Monday demanded an amendment to the mammoth economic stimulus package to give government-backed, low-interest loans to homeowners -- a revision that he says will both increase the demand for houses and boost the average household income.

"We believe that a stimulus bill must fix the main problem first and that's housing," McConnell told reporters Monday in introducing a plan to offer fixed mortgages of 4 percent to "any credit-worthy borrower."

What is it about housing that causes this to be treated any more reasonably than, say, the idea that the US government should have offered cheap loans back in 2000 to protect the people who bought Pets.com at its peak? That's effectively the situation in many parts of the country and the housing market isn't going to settle on reasonable valuations any time soon if the federal government gets into the business of encouraging mortgages which no sane bank would otherwise offer. I can offer some recent experience: last week none of our local banks was anywhere near 4% even with excellent credit, a solid job, 50% down and a special employer-negotiated discount — and that's entirely what you would expect if you looked at the historical record.

McConnell is shamelessly pandering to people who don't want to accept reality - and it seems increasingly unlikely that the remaining fiscal conservatives are going to be able to put adults in charge of GOP policy any time soon. It's also likely that the buckets of cash McConnell gets from real estate might have something to do with his zealous bubble-conservation efforts…