Obama: $350b bailout needs to help people

[maseman]

Source: MSNBC/AP

WASHINGTON - President-elect Barack Obama wants more transparency and strict guidelines for using the second $350 billion of the bailout fund Congress approved last fall to stabilize the nation's financial system.

Obama's economic team has been talking with the Bush administration about having Treasury Secretary Henry Paulson ask Congress as early as this week for access to the $350 billion remaining in the bailout fund. If Congress rejected such a request, a presidential veto could still free up the money, unless Congress overrode the veto.

(snip)

Among the things under consideration by Obama aides and congressional Democrats are limiting executive pay at institutions that receive the money and forcing such institutions to get rid of any private aircraft they may own or lease.

"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," Obama said.



Read more: http://www.msnbc.msn.com/id/28603203

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Gee Obama might actually be thinking of the people, not the Execs and cronies.

[Deja Q]

1. I think he's thinking of *both*; people and corporations.

And that is good. (We can't live without corporations, that's as simple as the recipe for lemonade.)

[BootinUp]

5. sacrilege!

but true.

[TomClash]

2. Give it directly to the People

Bypass the banks. They already squandered the first half.

[Dawgs]

4. Give it to the people to help both.

Using the money to help keep people from going into foreclosure will help people keep their homes and banks from losing money.

[Baby Snooks]

6. Use it to refinance...

Not that it would help those who have already lost their homes, but it would help those who still may. The money should be used to pay the "buydown" and closing costs for homeowners to refinance at a lower fixed rate. Rumor is some of the lenders, the banks, are refinancing at lower ARM rates. Meaning in a year or two, well, here we go again.

Congress has made no attempt to ensure the money really helps anyone other than the CEOs. Maybe Obama can force their hand. Maybe he can't.

The first $350 billion went to help the victmizers. How about the other $350 billion going to help their victims?

It may be just "Monopoly" money to Bush and Obama and to Congress but it is "real" money to everyone else. And it's their money. Our money.

[PSPS]

7. Not a good idea

I don't want my money used to "refinance" (pay for) the $750K house bought with a liar's loan (no-doc option ARM) by someone who really makes $20K/year. There are a boatload of those coming through the pipeline for the next year or two. And "refinancing" won't help the guy who's upside down, now that their grossly overpriced house is really worth 50% of the mortgage value. In both of these cases, the person should lose the house and do what they should have been doing all along -- renting.

Even if these loans were renegotiated with a low interest rate and a long fixed term, like 40 years, almost all of these people could never qualify for a loan anyway, now that one has to actually prove what they earn and make a 20% down payment with non-borrowed cash.

[Frank Booth]

8. Exactly. The government has encouraged enough bad behavior already.

The housing market was driven up by people spending way more on houses then they could ever hope to afford. They should lose their houses. I don't want my tax money going to flippers and incredibly irresponsible buyers.

[jaybeat]

13. You're WAY too broad-brushed, here

Do either of you have any data to back up your assertion that most people are in trouble because they have "more house" than they somehow "should" or that most of the problems have to do with flippers and "incredibly irresponsible buyers"??

What about the person who had "challenged" credit (due to the economic instability of the post-dot-com, post 9/11, early Bush years) and refinanced their home with an adjustable, on the very reasonable premise that their credit would improve and they could refinance before the 2 or 3 year adjustment period? (A premise fueled by very persuasive 24/7 advertising from mortgage brokers that basically make you sound like a complete moron if you didn't refinance every time rates dropped.) 2-3 years and more bad employment luck (layoffs, downsizing, profit taking, leveraged buyouts, "restructuring," etc.) and said homeowner is facing foreclosure, not because they "bought more house than they could afford" but because the got *screwed* by a system that minimized the appearance of risk for them while actually minimizing the risk for those selling the loan. (The broker long ago having been paid and moved on to someone else.)

What about the person slapped with outrageous healthcare costs, increasingly shifted from employer to employee and from insurer to insured. It doesn't take many $3,000 MRIs for uncovered pre-existing conditions or kids' broken bones when mommy or daddy are between jobs to rack up tens of thousands of dollars in medical debt. But since bankruptcy has both a huge stigma AND will only let you "keep" your house or car if you have very little equity, lots of people refinanced to use their equity to pay off other debts. Only now, as their adjustables adjust, and lenders are refusing to refinance even those with perfect credit, they are stuck, drowning.

I hear way too many people willing to rush to judgment and assert that whenever someone can't pay, it is by definition their own fault. When the heck did this site turn into "Puritan Libertarian's Underground"??

In the 1930's, 25% of the workforce was unemployed, and the prevailing social attitude was, if you lost your job, that YOU had failed, that YOU were no good, that YOU should be ashamed.

Now, with the percentage of homeowners facing foreclosure going up and up and up, it seems like we're facing the same kind of judgmental "blame the victim" attitudes. Everyone on Wall Street who made shitloads of money (millions and millions of dollars for individuals) buying, selling and marketing these loans--none of them are having to give that money back. But if someone is upside down on their mortgage, or needs a few months to get caught up, or needs their loan refinanced so they don't end up having to lose the equity they do have, we should tell them "tough shit?"

No. Not good for the American economy. (You want to see speculators, flipppers and other financial parasites having a field day? Stop by the courthouse steps and watch. It's not a pretty site.) Not good for neighborhoods. Not good for families. Not good for the middle class. Not good for the karmic wheel that will take care of those who help take care of others.

We pull together or we will pull apart.

We've already had 8 years of "I've got mine. Screw you!" and look where it's gotten us. Time we try something different. Time for a change.

[Frank Booth]

17. Guess you're not from Southern California.

If so, you'd know how, all of a sudden, houses tripled in value and the streets became full of H2s and Tahoes. There are some who were defrauded, but most people were just irresponsible. Despite what most people seem to think, owning a house and a big SUV and going out to eat five times a week aren't rights.

I make a good salary and am extremely frugal, but I still can't hope to afford a house here, even with prices going down a couple hundred thousand.

There's literally no affordable housing (at least around here); if everyone hadn't been so eager to get on the refinancing gravy train there just may be a little.

[PSPS]

18. I don't think so.

At least 75% of re-cast option ARM loans end up in foreclosure. This is because the person lied to get the loan.

You list several reasons someone may be unable to afford to pay a mortgage. For whatever reason, if someone can't afford to buy a house, why should my tax money buy it for them? They should let go of the house (which they can't afford for whatever reason) and rent. That's called life.

You seem to think that once someone buys a house, whether they lied or not to do so, they are somehow entitled to stay in the house no matter what adversity befalls them. That's just silly nonsense.

[jaybeat]

19. Libertarian Underground, anyone?

Good grief!

1. It is in *all* of our interests to prevent short-term, reversible setbacks to individuals (unemployment, uninsured health-care costs) from becoming *life-changing* watershed events that catapult productive, middle-class citizens into destitute, forever-behind-the-eight-ball have-nots. Surely, you don't need me to list all the reasons!! Do you?

2. For whatever reason? No, it is not "for whatever reason." The reasons I listed are *society's* problems and therefore it is in *society's* best interest to share the the burden of those problems with the individual. What? Are we somehow saying that "solitary, nasty, brutish and short" is a good thing?

3. For whatever reason? Part 2: MOST of the time the "reason" is "Ha, ha, I screwed you and made a quick buck." Times BILLIONS OF BUCKS. America (that means Americans, for those who need reminding) has been RIPPED OFF. Are we supposed to accept, "Tough luck. That's called life."?? I don't think so. Not on my watch, anyway.

4. "...wheather they lied or not..." What about the *millions* who were lied TO??? Tough luck for them, too? That is worse than "silly nonsense"--that's an intra-class cluster-fuck the likes of which re-makes a nation for generations. In a BAD way.

5. "At least 75% of re-cast option ARM loans end up in foreclosure." Maybe that's because middle-class people, having been brought up that it is bad to be a dead-beat, drain on society, etc., BELIEVED IT when people told them that, with rising home values, they could overcome the fact that they have BEEN WORKING HARDER AND HARDER, FOR LESS AND LESS, for DECADES, by borrowing MORE money. After all, what other choice did they have? Kiss their hard-earned equity good-bye in a fire sale? Walk away from their home with a credit-ruining stigma that would last LONGER than bankruptcy? Admit that they WEREN'T GOOD ENOUGH TO MAKE IT (even when it REALLY WASN'T THEIR FAULT but that of the Republican/Corporate elites who have conspired for over 28 years to DESTROY the middle class, all the while preaching the whole time that economic success is solely a measure of personal virtue and financial distress only attributable to personal FAILURE, when in reality THE GAME WAS RIGGED AGAINST US)?????

Give me a fucking break. Go back to EnslavedDictatorship.com or wherever else you came from. DU should be a place where people come together to support the greater good. Not to scream, "I wasn't STUPID, like you, so TOO BAD."

[dysfunctional press]

15. EXACTLY right- if the banks refuse to resume lending when they were given TAXPAYER money to do so-

then the government needs to get into the business of loaning money directly to the people who need/want it- and at rock-bottom interest rates, to boot.

just the suggestion that the obama administration plans to do so could get the bank execs off their asses...unfortunately, it would probably be to their legal departments to find a way to stop him.

something's got to change, something's got to give...BIG time.

[Myrina]

3. ... to whit, the Republicans cried en masse ...

"LET THEM EAT CAKE!"

[debbierlus]

9. Don't give them a fucking nickel until Obama is in the White House

But, the dems will alllow another 350 billion to be stolen.

In talks with the Bush administration? Excuse me? This is BULL SHIT.

[RCinBrooklyn]

20. Don't give a fucking nickel - period! The first $350 did NOTHING but ensure bonuses.

[FreeStateDemocrat]

10. Put some lipstick on that porker BO and see if the public fall for it.

[DJ13]

11. If I was Obama, I would wait for one week so his people are inplace

Dont give Paulson another penny, theres nothing that can be accomplished in the next week that cant wait until Bush and Paulson are gone.

Dont give them a chance to give away anymore money to their buddies.

[antimatter98]

12. The Obama econ team--Rubin and Summers--are not for the people.

And thus, we will not see the kind of help for working Americans that we've seen
handed over to the banks. Rubin did not make his millions worrying about the
people side of the economy when he had his big job at Citicorp and pushed under Clinton
for NAFTA and deregulation. Summers has never been for the people side either.

America still believes in business over people. FDR almost suffered a coup d'etat
because of this at the hands of Prescott Bush and other king pins.

Americans are just consumers, not more.

[TheWraith]

14. Here's a thought: why don't we simply endow a new bank with it?

If the problem is that the banks aren't loaning money, let's create a new one that will.

[Mark Twain Girl]

16. A fantastic start would be demanding some accountability for the first 350 billion of bailout. nt

[RCinBrooklyn]

21. Agreed. Tell us where the first $350B went and THEN figure out what to do.