According to a study released today by the Federal Reserve Bank of Boston, the Obama Administration would do far better to simply give struggling homeowners cash instead of trying to incentivize lenders into rewriting mortgages for people in danger of foreclosure. Is this a foreshadowing of his health care "reform" plan?
"The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.
One of the study’s coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans."
Read the whole story here:
http://www.boston.com/...
The problem, as with Obama's approach to all his domestic efforts, is that instead of using his enormous political capital to try to do what is necessary, Obama is trying to bribe, manipulate, cajole, or jawbone private sector entities into enacting public policy. This approach cannot work in mortgage relief, health care, job creation, or anything else. If President I-Only-Want-Programs-That-Work doesn't figure this out soon, he'll be scratching his head back in Chicago in January 2013, wondering how he became Jimmy Carter II.
It's not complicated, Barack. If you want struggling homeowners to have lower mortgage payments, GIVE THEM NEW MORTGAGES. If you want unemployed people to go back to work, HIRE THEM. If you want everyone to have reasonably priced health insurance, PROVIDE THEM HEALTH INSURANCE. It ain't rocket science.
Obama and the Dems are going to be called socialists anyway. The only way they can lose the next election(s) is to leave the fate of their efforts in the hands of the private sector, which wants them to fail, and that's exactly what they are doing. So far, Obama's efforts have been weak, complex, and conceptually stupid at the same time. So far, his shit ain't working, period.