BIO

Cliff Mason is the author of Millennial Money. He is the Senior Writer of CNBC's Mad Money with Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Rich and Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like. Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.

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Feb.20

9:22 AM ET

Friday, 20 Feb 2009

The Obama Plan: What Is Fair?

Posted By:Cliff Mason

Topics:TARP | Barack Obama | Stock Market

Fairness will be the death of us. In all the discussions of Obama's new housing plan, the notion of fairness, or rather, the plan's fundamental unfairness, comes up again and again.

You know the litany:

It's unfair to reward irresponsible homebuyers who are now underwater on mortgages they never should have taken out. It's unfair to extend a helping hand toward people who have mortgages on their primary residence, but provide no direct help for those with mortgages on a second home. It's unfair to help people with conforming loans, but not those with jumbo mortgages. It's unfair to spend $275 billion of taxpayer money helping just 9 million deadbeats.

We hear that this plan rewards the reckless and punishes the responsible.

I say so what?

Who cares if it's fair?

We can worry about right and wrong when the economy's not on life support. Right now all of these issues are totally tangential at best. I just want the housing plan to work.

Look, most people in their 20s don't own homes. So in a narrow sense, it's good for me and my friends if people keep getting booted out of their houses because they can't cover the mortgage and housing prices keep going lower. And you could say the opposite of that is true, using our tax-dollars to keep these people in their houses and prop up prices is bad for people who don't own homes but might want to.

If that's all there was to it, if this were really just a zero sum issue, then it might make sense to talk about fairness. But it's not zero sum.

As it happens, there are a bunch of people who need Federal assistance to keep up with their mortgages and stay in their homes. I suppose you could say they're lucky because they're getting government help now and "they don't deserve it." But if they don't get help, there's a domino effect that hurts all of us. The banks that loaned them money go under, or at the very least have less capital and become even more unwilling to give people financing. We need a banking system more than we need the government to spend money in a way that's "fair."

On the other side of the equation, if these homeowners don't get assistance a big chunk of their wealth is going to vanish. Many of them will be poorer, all of them will feel poorer. Now you've got millions of people who are spending less money at a time when we need just the opposite. And consider the effect on housing prices. I'm pretty sure that this program will cause home values to be higher than they would've been without a housing rescue package. That makes all homeowners be wealthier and feel wealthier, which causes them to spend more money, which helps get the economy out of recession, and I'm pretty sure that's good for all of us.

Now, you could argue that this program is too small, or that the details could be changed so that it gives us more bang for our buck, or even that doing nothing instead would do more to end the recession and that would be totally valid. Fighting about whether it's fair, on the other hand, just doesn't make any sense to me.

We've got bigger fish to fry.