This is the Cato Daily Podcast for Tuesday, April 6, 2010.

I'm Caleb Brown.

The President's second attempt at a plan for stemming the tide of foreclosures, while something

of an improvement, still ignores that the best way

to get back to a stable housing market is to let prices rise and fall without government

intervention.

So says Mark Calabria, Director of financial regulation studies at the Cato Institute.

What was wrong with the President's original plan to prevent foreclosure?

Well, the original plan, and it's certainly fair to say that the President's original

plan, the HAMP, the Housing Affordable Mortgage Plan, was based on the last administration's hope now.

So the same assumptions that the last administration made

or the same assumptions this administration made,

which is people were having their homes foreclosed

because they're having exploding arms adjusting

payments that are going up or that they were somehow tricked that they were

predatory lending. That was the primary driver of foreclosures. That was never

the case then the amount of actual foreclosures

driven by predatory lending or arms are a very small share of it. The new plan

ties benefits associated with your mortgage with whether or not you are

receiving unemployment benefits? Well to some extent and I will say to the

administration's credit there is a finally a recognition

years after it was obvious that unemployment is the number would driver foreclosures.

...