Obama Thinking About Doing Something Really Bizarre and Stupid

[Victory]

Nope. Just a reg returning after a long hiatus.

But thanks for spinning some controversy.

I'll say....

 

[The Rabbi]

notwithstanding that your legitimate issue becomes fodder for the rightwingnuts, I understand your concern. But on the other hand, how does one balance the need to address the foreclosure problem appropriately, with the need to get banks lending money again? and shouldn't that have happened, instead of them giving themselves bonuses with our money?

Capital cannot be channeled efficiently by the banking system until the bad loans are cleared away. The more that unprofitable loans are kept on the banks' books, the less capital there is to lend because current capital is being used to service dead loans.

The bonus issue is a canard. Small banks aren't lending either and those guys aren't paying big bonuses.

Thanks for your response. Appreciated. I truly understand. I really do. But at what point do we say, "listen, it's time to renegotiate with some of these people. real estate prices have tanked because there are too many foredclosures on the market; you're not going to get 100% of your money anyway; and you gave loans you knew these people couldn't afford to pay in the first place".

I'm not saying that people who can never pay shouldn't be foreclosed on. But there are people who can pay what they initially signed on for, just without the jump in the ARM. Maybe it's better all around if they work things out.

And fair enough re the bonuses. But it does create negative perceptions.

And, mind you, I truly don't know what the answers are. But there is a serious problem and I'm not sure letting people get tossed from their homes solves it.

Here's a novel idea: Let banks do whatever it is in their power and self-perceived interest to do.
That will mean foreclosing the loans, getting the houses sold, and getting the loans off their books faster.
Japan spent years propping up banks and other institutions with bad loans, never allowing them to foreclose or write them off. The result was a decade or more of economic stagnation with record low interest rates.
When people get foreclosed on, they frequently end up better, renting at lower prices and moving to where jobs are. Teh idea that everyone getting foreclosed on will end up in the gutter is nonsense.
No, Obama has no idea what he is doing, which is making the problem worse, not better.