The Need To Remind Politicians Of Who Holds The Whip

Believe me this isn’t meant to be another attack on Sheila Bair. She just happens to be the politician of the day who exemplifies a disturbing trend.

Bair took issue with lenders and investors in mortgage securities who are not bending to the government’s loan modification whip. It’s fine for politicians to try and push people and companies in a direction they want to go but that sort of prodding should be gentle, indeed, and should never creep over into threats. Today, Bair came perilously close to threatening if the Washington line isn’t toed.

For lenders and companies servicing loans held by struggling borrowers, Bair said, “There is an obligation to modify, not to foreclose.”

“Investors should be taking a hard look at what they’re advocating,” she said. The harder investors push, “the more there’s going to be backlash here.”

In addition to being pompous, the remarks send a chilling message. Conform or suffer retribution. At a time in which the political class will be given great liberties in order to solve the current conundrums, it is imperative that they remember that they are elected, not ordained and that their still exists a rule of law and a Constitution. When they forget that, case in point Ms. Bair, then they need to be reminded.

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