A month or so ago, I posted a diary complaining about the stone wall a close friend had hit in applying for one of Obama's much-ballyhooed 2 percent mortgages. So far, the concept of "incentivizing" the private sector into enacting good public policy is a dismal failure. In short, the mortgage assistance programs, originally intended to help "as many as 9 million homeowners in danger of foreclosure or who have suffered sudden drops in income," are a joke without a punch line. This unamusing humor has some nasty implications for Obama's recently announced "reform" of the financial sector, and for the upcoming debate on health care reform.
For more on the failure of the mortgage assistance programs, see this article in last week's Times, which, if anything, overstates the effectiveness of the programs so far.
http://www.nytimes.com/...
Today's Times has an article suggesting how weak Obama's approach to financial sector reform is. Lenders should have to absorb FIVE PERCENT of the risk of the loans they are making? Wow. I bet they're shaking. With laughter.
As for health care, be afraid. Be very afraid. The Massachusetts solution has been a bad one so far. If you make more than twice the poverty level ($32,000), you HAVE to buy private insurance if your employer offers to pay TWENTY PERCENT of the premium. So far, it's basically like mandatory auto insurance, except without any state control of the premiums.
For all the cries of "socialism" Obama is being subjected to from the right, he might as well try to enact some reasonable policies instead of Hooverish "reforms," like the financial sector proposals, and go-nowhere attempts to prod the private sector into enacting populist policy, as with the mortgage "bailout." If Obama wants people in need to have mortgage relief, then give them low-cost mortgages. It's a complete waste of time and energy to try to manipulate private sector entities into providing relief to besieged homeowners. But if he applies the same thinking to health care reform as he did to mortgage relief, his reform will generate a lot of busy work window dressing that still pours between 16 and 30 percent of all health care expenditures into health insurance companies that produce nothing.