Friday, February 27, 2009

On Balance What Problems Might Obama be Solving?

As the new Administration continues to struggle to get new programs out the door, which is certainly understandable when you are throwing everything including the kitchen sink at the public, I wanted to offer my help to them.

First, I find it rather bizarre that after two years of investment financial analysts, media financial analysts, Congressional financial analysts and Executive branch financial analysts being dead wrong on the economy and virtually every aspect of the economy that Washington, Wall Street and Madison Avenue continue to listen to them as if they had a clue what they are talking about. Don't the leaders in the Obama administration remember? Oh yeah, the same mouthpieces that blew it before are speaking for the new administration.

Congress has been studying the collapse of the housing market for over a year and we are yet to see anything except ways to save mortgages in foreclosure or save the criminals that wrote the mortgages that are in foreclosure. Even Obama's chief of staff was part of the Freddie Mac Fanny Mae mess that evolved from the liberalization of mortgage rules.

You want to fix the problem here is a good start. Allow 4.5% refinancing with minimum closing costs. Bank of America is allowing refinancing after receiving $45 billion in federal bailout funds but the Bank of America closing costs on refinancing have risen to $16,000 when they used to be $3000-5000. What kind of a deal is that for clients? They may be lending money again, our money from the federal bailout, but now it costs us 3-8 times as much.

There is no reason to require appraisals, title searches and registration fees costs thousands of dollars for refinancing mortgages already owned by the banks. Get rid of the corrupt fees and rigged appraisals and put money back in the pocket of mortgage holders and you will finally get real stimulus. While some of those in foreclosure should be saved most should not be when over 95% of the people are making payments on time. Lowering the monthly mortgage payment of the good loans will immediately put those hundreds of dollars a month into the economy.

The sale of foreclosed homes should not be allowed to impact on the market value of homes not being foreclosed. Appraisers are dropping market rates where ever there is a glut of mortgages and applying such loss of value to regional areas experiencing no foreclosures. Unscrupulous appraisers can get away with the same manipulation to lower values as they did to raise values the past 3 years.

Speaking of appraisers, if a home has been remodeled and exceeds energy and environmental code it should have a much higher value than a home not remodeled. Even homes built to code are far from achieving energy and environmental efficiency peak potential. Right now a home needing $50,000 to $100,000 in energy and environmental upgrades to exceed standards is valued the same as a home with the most advanced materials and equipment, a joke if the nation really wants to save energy. There is no value gained by making the improvements. We are encouraged by present law to take shortcuts and not use advanced materials to keep the costs down.

Historic preservation must accommodate energy and environmental improvements and reward them when made but these homes are also discounted for age and penalized for maintaining historical standards. For example, if a home was built without closets but used cabinets or free standing wardrobe closets they will be rejected as a bedroom and significantly decrease the present value of the home even though they are being historically preserved. Does that make any sense?

What about the banks, how do we save them from self-destruction? Well, if you are liberal and believe it is our responsibility to pay for their sins then do whatever Pelosi and Franks tell you as you already have made up your mind they are too big to fail even if it takes nationalization to save them. What is a few more hundred billion dollars when money can be printed at will? Even Obama slipped $750 billion more into his new budget to cover unexpected bank losses.

I wonder why the Administration finds it so important to save banks like Citigroup and Bank of America when they have already cost us $90 billion to keep them alive, snd after all that cash they are still on life support. Now since all individual deposits in those banks were already guaranteed by the FDIC, that means any money they need has nothing to do with the little people. So why in the world have we already pumped in $90 billion when the little people were protected? Who is Congress protecting and bailing out if the money is not needed for depositors?

So where does this leave you? In the first place, 47% of you didn't even vote for Obama which the media seems to keep forgetting as they talk about the president as if everyone in the world voted for him. Here in American a six percent victory is not a landslide. Truth is he should have won by 15-20% and didn't.
However we still have those that did support him. I doubt they all believed he would advance such a liberal - socialist agenda, especially in such dire financial times.

In normal times I would say contact your Congressmen to stop the largest government spending spree in history but the Democratic Majority are demanding he spend even more. Obama promised to stop pork barrel spending. His own stimulus bill had at least $10 billion in pork and a new appropriations bill he is expected to approve has $410 billion, with a substantial amount of pork barrel. I guess Obama can't keep all his promises.

We have no campaign reform being discussed though it is the biggest violator of ethics and cause of corruption in Washington. We have no control over pork barrel spending as witnessed by the legislative record to date. We have no control over lobbyists working in government as a number of lobbyists have been hired by the Obama administration.

We do have a worldwide expansion in abortion approved. We do have stem cell research approved that encourages the "harvesting" of unborn fetuses for scientific research. We do have a move to force unions into all the states and industries nationwide, even if a state has chosen to be right-to-work. We do have millions of federal dollars being poured into liberal activist organizations that demand bigger government and more spending.

One final observation and that is regarding the liberal-biased media in the television and newspaper business who were so responsible for trashing Palin and McCain and getting Obama and Biden elected. As these media are rapidly falling into bankruptcy and disappearing I'd say your hero seems to have lost interest in your cause. Now are you glad you got him elected? Do you still have a job?

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