While much of the media attention has focused on National Review's recent editorial endorsing GOP presidential candidate Mitt Romney, another of the magazine's editorials may have been overshadowed. This is a pity, because it's of high significance in the credit and housing policy debate. In an editorial posted on NR's web site on December 11, the premiere conservative magazine came out squarely against the Bush administration's "voluntary" rate freeze for borrowers with resetting adjustable-rate mortgages (ARMs). The unsigned editorial hit all the right notes on how the bailout rewards irresponsibility, limits choices, and may send a terrible signal to international investors about America's upholding of its contracts. "For markets to work properly, imprudent actions must have consequences, and with few exceptions the government's role should be limited to punishing fraud and enforcing contracts," the editorial begins. "But the Bush administration has proposed a plan that goes far beyond this — rewarding people who took out loans they couldn't afford, and encouraging lenders to back out of their contractual obligations to the investors who bought their mortgages." The editorial is also notable in that it doesn't indiscriminately condemn the financial innovation of ARMs. "When used responsibly, adjustable-rate mortgages can help young families afford to buy homes while raising small children or completing an education," the editorial explained. NR then made the novel suggestion that GOP candidates help prove their conservative bona fides showing "the political courage to call this the bailout that it is and oppose it." Well said! Similar points are made in my "Opposing view" in USA TODAY countering the paper's editorial and in the piece I wrote for The American Spectator. Also, check out my colleague Eli Lehrer's column in Business Week's "Debate Room" pointing out that in many cases, borrowers do bear the responsibility for loans going bad.