Obama’s secret problem
During 2007 and massively in 2008, the major media along with every politician looking for an election or air-time was speaking about the mortgage foreclosure rate. Sub-prime loans were the rage. Everyone was pointing a finger at the Bush Administration and Republicans for the growing mess. Then President Obama was elected. By January 2009 the mention of mortgage delinquencies and foreclosures faded way with plans of a Making Home Affordable being created. Problem solved.
Not quite.
As has been addressed here before, the mortgage housing crisis is anything but over. In fact it is worse than ever. Here are just a few of the facts as reported in January and February 2010:
1 in 4 mortgage owners owe more than their home is worth, dlinquencies and forclosures are up to unprecedented levels, and the Government help that was promised is far short of anything effective or realiatic. It’s not just the sub-prime home owners, it’s every homeowner that is being effected. But where is the story on the news? Where are the politician’s speeches?
Rep. Barney Frank was more than willing to get on television and discuss how Fannie Mae and Freddie Mac were in sound shape (2 weeks before they collapsed – something we are still paying for), and then defended his statements and lack of action on everyone but himself or Democrats. But he is still in charge of the Banking Committe (along with Sen. Dodd in the Senate’s version) and mortgages are at ever growing historic levels. Where are his comments to the public now? Why is he quiet?
MSNBC, CNN, Fox News, and all the public broadcasters spent days of coverage on the mortgage crisis. There was not a month or a week where some aspect of the story was not covered for over a year. Since the beginning of 2009 the story has gotten only worse, affecting more people and the economy more harshly. Where is the coverage? Where is the pressure on politicians to live up to their words and promises?
It’s almost as if once President Obama was elected the problem was solved. That would be the conclusion of anyone looking at the media coverage today versus in 2008. The impression would be that President Obama, Rep. Barney Frank, and Senator Dodd fixed it all. There is nothing more to report.
Such a theory is more than just obtuse, it’s dangerous. Considering that the unemployment rate will end the 2010 at roughly 10% – which says nothing of the potential peak expected this year which might be as high as 11.5% – and will only decrease to 9% at the end of 2011, it seems logical that mortgages and the real estate markets are in for more trouble. The same logic would state that something needs to be done, or at least planned. Yet no one is willing to even speak about this via the major media.
Obviously creating jobs is one solution. At present, the proposals to resolve that will cost at least $400 billion and to date have had questionable success and potentially negative impacts. Even more important is the next thing to occur, taxes.
If taxes are increased as has been proposed in the latest Obama budget, and the Cap & Trade Bill is passed the problem will be exponentially higher. The Cap & Trade Bill proposes to dramatically increase (as President Obama promised) the cost of energy, adding to the cost and pressure of owning a home. Another factor that is not considered in the equation is the passage of the Health Care Reform, which the President and Speaker Nancy Pelosi have pledged to make law. It will further add a new cost to the budgets of cash-strapped home owners that are struggling to meet financial obligations now.
Imagine what will happen to millions of homeowners that are just making ends meet, or slightly beyond that. Add in potentially double the cost of energy bills, and then add the cost of a mandatory healthcare, and then add higher banking fees (to pay for the new banking tax), and higher costs of goods and services (to pay for the new taxes on those companies). All of this while jobs are scarce and incomes are lucky to remain frozen at present levels. Where will the money come from? How is a mortgage, and everything else, supposed to be paid?
The housing and mortgage crisis is far from over. Not speaking about it does not make it go away. But not speaking about it does seem to allow for some elected officials to bolster their re-election potential. It also makes the Obama Administration look more effective than it has been. Which is great if you are politically motivated – like MSNBC – but not as important if you are trying to keep your home.
