Legislating common business sense?

Well, yet again I don't get it. Yet again personal responsibility for one's life is being overwritten by legislation.

Our friends in Congress seem to want to legislate what normal people would call common business sense:

The House could vote as soon as next week on a bill that would make sweeping changes to the home loan industry as defaults and foreclosures continue to rise among financially strapped borrowers.

[...]

The bill would:

-- ban lenders from making loans that borrowers don't have the ability to repay;

-- prohibit lenders from steering homeowners into refinanced mortgages that don't provide any benefit;

-- make Wall Street banks that package mortgage securities into investments liable for violations of lending laws; and,

-- create a nationwide licensing system for mortgage brokers and bank loan officers.

The industry has been split on that last provision, with mortgage brokers supporting the requirement and mortgage bankers saying it should only apply to brokers.

Umm...Am i reading this right? "ban lenders from making loans that borrowers don't have the ability to repay"? Does that make sense to anyone? Why should the government be meddling in this basic business idea? If this takes place, the bank doesn't get their money back and the dumbass customer loses the home he should not have had in the first place. Basics. Why, why legislate this?

But much scarier to me is this part:

Separately, the House Judiciary Committee is scheduled to vote Wednesday on a measure that would allow bankruptcy judges to be able to modify loans to keep struggling borrowers from losing their homes. That idea is backed by Democrats and consumer groups, but ardently opposed by bankers, who say it would further dampen the mortgage market and result in increased bankruptcy filings.

Are these people kidding? Some idiot takes out a mortgage he can't afford and then a judge can overwrite his loan terms to let him keep the home? My guess is this will royally screw the mortgage market because if a bank can't use the house as a collateral against a non-paying borrower, why give the mortgage at all? Or would the alternative be taxpayer's money to hold up the mortgage? Either way this is senseless.

UPD (thanks AS): another alternative -- lenders price in more risk into the cost of the loans, which hits everyone who borrows, so other people end up paying a premium for the sorry individuals who can't read fine print. Marvelous.

Oil from a stone or A dream come true

Go Shell! Let's see that oil flow domestically (until we find something better).

Apparently, Shell has spent 28 years and 200 million working out the process to extract oil from oil shales.

And shales we have!

Spanning some 17,000 square miles across parts of Colorado, Utah and Wyoming, this underground lakebed holds at least 800 billion barrels of recoverable oil. That's triple the reserves of Saudi Arabia.

[...]

Vinegar has developed a cutting-edge technology that, according to Shell, will produce large quantities of high-quality oil without ravaging the local environment - and be profitable with prices around $30 a barrel. Now that oil is approaching $90, the odds on Shell's speculative bet are beginning to look awfully good.

Of course, considering the U.S. uses almost 21 million barrels a day and imports about ten million (and rising), even the most optimistic projections do not get the country to the nirvana of "energy independence." What oil shale could do, though, is reduce the risk premium built into oil prices because energy traders could rest easy knowing that the flow of oil from Colorado or Utah won't ever be cut off by Venezuelan dictators, Nigerian gunmen or strife in the Middle East. In a broader sense, U.S. energy security lies in diversity of supply, so enhancing domestic sources is appealing.