Beyond Uncle Sam’s Big Bailout

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James -- You main point, “that falling home prices and the deluge of foreclosures remain squarely in the center of America’s current economic problems”, is exactly right and the problem that must be reckoned with. It has not been at all, ignored by the bailout plan. The bailout plan is leaving it for all Americans that bought at high prices to suck it up for 10 years, pay the mortgage if they can, and take the loss that went to the greed of investment bankers, loan officers, and owners of Mortgage Backed Securities. Obviously, you’re going to get a lot of foreclosures and a freeze in the liquidity of homeownership.
Fatesrider of CA says
“RUN FANNIE AND FREDDIE the way they should be run - as investment lenders. Let the government take a piece of (if not all of) the profits and guarantee the risks.”
Means what??................ They are run as investment lenders, the problem are the overvalued loans, larger than the property that back them…………………….
Other than the government paying down these mortgages, the problem will persist for a long time………….. the only solution is to have a foreclosure board established with judges to decide on workout plans, somewhat subsidized by the government to make the workouts conventional loans that loan no more than the property value???

nikeduke of MA 6:28PM October 07, 2008

“If you stop the snow from melting, you won’t have a flood in the valley.” Government participation in a homes appreciation will melt the economic snow, why snort the snow when you can smoke it, James!
What, Socialism is the only way out of this, melt some more snow James, better yet wear a t-shirt and do what you want then you may do what you like!

SimonSez of CA 11:12PM October 06, 2008

Dude, you JUST lambasted the idea of subsidizing homeowners in your last article, accusing it as being a 'liberal' practice. And the housing market DOES need to find stability, which it can't do if the market is artificially supported by government intervention.
Here's MY suggestion:
REGULATE THE DAMN MARKET.
RUN FANNIE AND FREDDIE the way they should be run - as investment lenders. Let the government take a piece of (if not all of) the profits and guarantee the risks.
Use those profits to invest in new technologies (Gee, I don't know, how about GREEN TECH for a change?). Investing (not giving away, but investing) in emerging technologies will stimulate job growth, creating more money in the market, freeing up credit.
The credit crunch is the major fear, which keeps businesses from being able to borrow for future growth. Green tech is emerging and promises to be a huge growth market - if given the investment opportunities. The government can make a MINT just finding the right technologies in which to invest, reducing the deficit, making the dollar stronger so that even with a credit crunch, we can buy more with less.
We spent so much money propping up investment banks choking on their own greed and mismanaged practices we shouldn't have let them live. Other banks will buy them up or they will pass into oblivion and new ones will emerge. But we need to make the dollar stronger and this particular Bushit idea will only make it weaker.
Perhaps consistency in ideas is genetic, but we've seen what 'fiscal responsibility' has done to this country. It's too bad they voted against stem cell research. That might have helped them learn how to be realistic when it comes to economics and human nature.

Fatesrider of CA 2:43PM October 06, 2008