The Foreclosure Bailout Poses Questions About the Froth and the Bubble

March 3rd, 2009 | Tags: Foreclosure Crisis

The foreclosure bailout measures of Obama raises questions about whether it is all froth and bubble sans content.

Allowing the entry of class frustrations in to the scene is like placing a time bomb ready to burst. Before pressing the button it is better to stay out of the blast zone. This is what history repeatedly tells us..

By bringing in the foreclosure relief bailout plan Obama has fundamentally altered the character of class struggle in USA. The point is whether Obama can skirt the inevitable fallout. In the immediate present it is laurels for him and for his $75 billion plan. Many think that since money is being thrown around like grapeshot from Washington it will cause no harm if the unfortunate foreclosure victim got some – especially since the hullabaloo is in his name. If those who cracked banks and drove companies off the cliffs are getting dollars why not the decent regular fellow who tries to budget his monthly intake. Obama has to show that he is doing something for the small guy and not only for the bigwigs.

With time, realities might force the shine and sparkle of the beginning to wear off and blur from the memory of the voters. Obama came. Obama spent. Obama sparkled and then?

The ordinary person does not know the difference between a government worker who is trying to stimulate the economy and another who is not doing so. To an outsider the bank whether nationalized or not looks very much the same. The political ramifications of the bailout are very simple – are things getting better and will it be so this time in the following year? If the unemployment dips to 4% and Dow floats up to 14,000 once more then one can say that the razzle-dazzle of the launching in February 2009 has been positive and worth it. But if the economy falls into depression and inflation erases benefits of retirees and the clouds of spending and borrowing are the same then it can be termed a political nightmare.

The plans of the president on rescuing bankers and automakers are pretty clear but the mortgage plan is still foggy. An editorial in Wall Street journal makes the potential dangers ahead quite clear. Even with the best possible favourable terms the economic situation is such that the majority of the borrowers will not be able to make any mortgage payments.