{"id":17559,"date":"2011-10-27T10:59:17","date_gmt":"2011-10-27T17:59:17","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=17559"},"modified":"2011-10-27T14:21:22","modified_gmt":"2011-10-27T21:21:22","slug":"obama-cant-wait-to-screw-with-the-market-even-more","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2011\/10\/27\/obama-cant-wait-to-screw-with-the-market-even-more\/","title":{"rendered":"Obama “Can’t Wait” to Screw with the Market Even More"},"content":{"rendered":"

Okay, as long as we’re talking politics this week, let’s just dive in head first. I’d like to discuss the latest federal “relief” plan that made news this week. Here’s an AP story from Monday: Obama Offers Mortgage Relief on Western Trip<\/a><\/p>\n

LAS VEGAS \u2014 President Barack Obama offered mortgage relief on Monday to hundreds of thousands of Americans, his latest attempt to ease the economic and political fallout of a housing crisis that has bedeviled him as he seeks a second term.
\n…
\nHis jobs bill struggling in Congress, Obama tried a new catchphrase \u2014 “We can’t wait” \u2014 to highlight his administrative initiatives and to shift blame to congressional Republicans for lack of action to boost employment and stimulate an economic recovery.
\n…
\nWhile Obama has proposed prodding the economy with payroll tax cuts and increased spending on public works and aid to states, he has yet to offer a wholesale overhaul of the nation’s housing programs. Economists point to the burst housing bubble as the main culprit behind the 2008 financial crisis.<\/p><\/blockquote>\n

Wait, what? No, the main culprit behind the crisis was all the insane financing, derivatives, bogus ratings, leveraging, and all of the other nonsense that went on during the housing bubble run-up. The bust and financial crisis were just the inevitable consequences of the near-universal death of responsibility at both the personal and the corporate level.<\/p>\n

Moving on…<\/p>\n

Under Obama’s proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe.<\/p><\/blockquote>\n

Because there are so many<\/em> people whose homes are worth half what they owe who just want to refinance to a lower interest rate. Or something.<\/p>\n

“Now, over the past two years, we’ve already taken some steps to help folks refinance their mortgages,” Obama said, listing a series of measures. “But we can do more.”<\/p>\n

At the same time, Obama acknowledged that his latest proposal will not do all that’s not needed to get the housing market back on its feet. “Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges,” he said.<\/p><\/blockquote>\n

Please, don’t “do more.” Hasn’t the government already done enough? Killing financial oversight, over-promoting “ownership,” over-expanding Fannie & Freddie, bailing out irresponsible banks…<\/p>\n

Presidential spokesman Jay Carney criticized Republican presidential candidate Mitt Romney for proposing last week while in Las Vegas that the government not interfere with foreclosures. “Don’t try to stop the foreclosure process,” Romney told the Las Vegas Review-Journal. “Let it run its course and hit the bottom.”<\/p>\n

“That is not a solution,” Carney told reporters on Air Force One. He said Romney would tell homeowners, “‘You’re on your own, tough luck.'”<\/p><\/blockquote>\n

I’m certainly no Romney fan (he’s probably my least<\/em> favorite potential 2012 challenger), but he’s right on this one, and Mr. Carney has got it backward. Foreclosures are not the problem. The problem is over-inflated values that got completely detached from all sound economic fundamentals. Foreclosures are<\/em> the solution, not some sort of government-forced refinance plan that helps people to continue throwing good money after bad for decades to come.<\/p>\n