Naked Capitalism has the post How Obama Framed Trump with Faux Mortgage Insurance Rate Decrease.

This was nothing more than an opportunistic political maneuver by the outgoing president, to set the incoming president up for failure. All while pretending to care about American homeowners. If the President Obama really wanted to help Americans, he would’ve considered this move–or something similar–long ago. Instead, he told them he was giving them a gift and promised that it would be delivered by Trump, knowing full well that he would never follow through. Lower-income Americans were used as pawns in a cheap political game.

I am not sure what to make of this story. The missing piece is an analysis of whether the rate cut was good or bad policy, and no analysis if restoring the rate was good or bad policy. There is an analysis in the comments that does give some answers to the question.

I don’t know what that rate should have actually been, but if it was 0.55%, then Obama and the FHA should have lowered the rate years ago to avoid overcharging people. And if 0.80% was the right rate, then Obama should never have lowered it at all, given that it would ultimately require a taxpayer bailout. Either way, Obama is incompetent.

If the only consideration is cost to customers, then the proper rate is 0%. Offer it for free!! But if you want to the program to actually be self-sustaining, so that it doesn’t require continuous injection of taxpayer dollars and be a perpetual target for cancellation by Congress, then you have to charge enough to cover losses. Whether the average mortgage rate is 3.5% or 4.0% or 6.2% matters not a whit in this calculation.

A comment on this comment adds further data to the discussion.

Muni bond insurers were publicly traded, profit seeking companies. But they underpriced their insurance, probably because no one expected a 1930s-style crisis like 2008.

Obama had no more concept of how to price mortgage insurance than I do about how to perform brain surgery. He was just mindlessly handing out bennies at public expense in the dark of night, before skulking away into well-deserved obscurity.

There is one thing in this story with which I can agree wholeheartedly,

If we can’t win with the truth, we don’t deserve to win.