The Wall Street Journal today reports that John Edwards has some $16 million invested in Fortress Investments, which has foreclosed on some subprime borrowers who couldn’t keep up their payments.
In a tizzy over the bad publicity, Edwards has declared that he will get rid of the odious investment in Fortress (the same group that paid him a bundle for alleged consulting work last year) and will give personal financial help to people in New Orleans who have lost homes because they couldn’t make the payments.
Well, good for him. But why is it that big-time populist politicians like Edwards want first to reach into their bag of legislative tricks and grandstand for legislation that would block foreclosures rather than identifying individuals who through misfortune can’t make their payments and give them assistance?
If we block foreclosures, we a) interfere with private contracts and b) throw losses onto lenders. Voluntary charitable actions to help Katrina victims from being evicted are infinitely preferable. The fact that Edwards appears to have thought of that only after this publicity disaster doesn’t speak well for him.