I have one comment about the press conference today. Obama is toying with his food, since he knows that compromising with him on anything is the one thing that the Tea Party does not want to do under abny circumstances (since a majority of them think he's a Kenyan citizen).
Phones are open at 930 pm EDT at 646 200 3496. More below the fold.
Obama should actually enjoy his new predicament. The Republicans have promised its Tea Party base to make the Bush tax cuts permanent, repeal health care reform and never compromise with Obama (whom many Tea Partiers regard as illegitmately elected). Of course, the GOP cannot deliver on any of these promises - so its base is assured of disappointment.
Obama could still have pulled this out - not by campaigning but by taking bold action earlier on mortgage modifications. He should have forced Freddie, Fannie and the Federal Reserve to "detraunche" the mortgage backed securities in their possession and modify the underlying loans under his mortgage modification plan. This would have eased the finances of enough families to get them spending again, jumpstarting the entire economy. Larry Summers thought the economy would work itself out. Larry was wrong and Obama is good to be rid of him.
It is actually a good thing that Obama did healthcare the way he did. If he had waited, it would not have ever passed and the economy still would have stayed in the tank with the same Democratic losses.
What to do next? Fiscal policy won't solve the problem, nor will QE2 as is. Recovery will come from either repealing bankruptcy reform and allow cram-downs on residential mortgages and/or to have the Federal Reserve and the GSEs "un-traunch" the mortgage backed securities in their possession and mark each of these mortgages to market - and then buy up the other outstanding US mortgages at market value. In order to not bankrupt the Fed in doing this, have them first buy the GSE's from the Treasury for the market value of their portfolios and then split them up into regional institutions (two for each Federal Reserve Region) and do IPOs to recapitalize them, with the Fed getting enough money to meet their costs, with the excess going to the Treasury.
I'm talking about this tonite on www.blogtalkradio/the-christian-left at 9:30 EDT. Call in at 646-200-3496 if you have an opinion to share.