I find myself in a daily battle not to write cynically about our economy and the political dynamic within our nation.
Just this morning I find myself wanting to rail on the Obama administration’s latest efforts to support housing when past efforts have been such enormous disasters. How enormous? I cannot help myself…….
Well, as the FT highlighted the other day in writing, Foreclosure Prevention Plan Has Limited Impact,
The White House has rolled out programmes to forgive borrowers’ second liens and give unemployed homeowners a months-long forbearance from payments while they look for a new job. It has even tried to entice lenders to reduce loan principal in exchange for being protected from losses due to default by allowing borrowers to refinance into a cheaper mortgage backed by the US Federal Housing Administration (FHA).
Two years later, the FHA programme has helped only 646 borrowers….,
646 borrowers….heh? Is that a misprint? Nope!! None other than the Special Inspector General of the Troubled Asset Relief Program provided that figure to the FT. That is Uncle Sam at work. How great!!
Why and how does something like that happen and why are we supposed to believe that Obama’s “new and improved” housing plan might work? Don’t hold your breath.
What does Josh Rosner, co-author of Reckless Endangerment and managing director at Graham Fisher have to say about Obama’s new housing initiative?
“The structure suggests [administration officials] don’t really want it to work. They just want it to look like they’re doing something.”
Fairly easy to be cynical, don’t you think?
Let’s turn positive and get something accomplished by listening to somebody who truly understands what is going on in our economy and what is the key to real long term prosperity. To whom do I refer? Sense on Cents Economic All-Star Kenneth Rogoff addresses the knee jerk political quick fixes to which we have become accustomed and the key to real long term prosperity in today’s FT. Rogoff writes, Our Ignorance Will Yield More Crises in Capitalism,
One absolutely essential prerequisite is emphasised in Adam Smith’s letter to the Financial Times (as imagined by David Rubenstein): educate, educate, educate. It is really hard to see another way out of the growing sustainability problems that capitalism has given us. Mr Rubenstein focuses on the inadequacies of primary and secondary education, as well as the need to re-educate and retrain adults.
I would take the point much further: Societies need to find ways to make adult education, including economic and financial literacy, far more available and far more compelling. If voters are uninformed and easily swayed towards demagogues peddling short-term ill-considered policies, there is little hope for righting the course of capitalist economies.
The idea that the masses are indifferent to education, and that any broader notion of literacy beyond the three R’s (reading, writing and arithmetic) is a hopeless cause, is nonsense. As someone who has spoken to all kinds of people in the wake of the financial crisis, my sense is that most citizens are starved of information, and would consume it hungrily if offered in a palatable form.
Rogoff nails my motivation which drove me to launch and grow Sense on Cents along with the numerous sites to which I link.
Where do I go when I want to learn what is really going on with the consumer across every major sector, including housing and autos?
Consumer Metrics Institute.
Where do I go when I want to learn what is really happening on the unemployment front? John Williams’ Shadow Government Statistics.
What about trends on the domestic and global inflation front? The Billion Prices Project.
Cutting edge market based research across all sectors? Seeking Alpha.
Something you cannot find? You can also ALWAYS ask your friendly writer here at [email protected]
Mr. Rogoff might be quite pleased.
Uncle Sam? He’s busy playing games and wasting OUR money.
646 homes…”The structure suggests [administration officials] don’t really want it to work. They just want it to look like they’re doing something.”.
Do your friends, family, and colleagues a favour and get them to do the same. Thanks!!
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.
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