Top of the News: The Obama administration is facing a political backlash, and I’m not writing about tonight’s healthcare speech. The Treasury reports that only 12 percent of those eligible for loan modifications under the Obama mortgage rescue plan have been helped.
The plan aimed at encouraging the private loan servicers to work with homeowners to avoid foreclosure. Forty-seven have joined the program, but according to the Treasury, 21 had modified less than 5 percent of eligible troubled loans. Some had not modified a single loan. Millions still face foreclosure, joining the record numbers who have already lost their houses.
One can be hard-nosed and say: These people shouldn’t have taken on more mortgage than they could afford. True enough. Except millions were duped by fine print and outright fraud. And the same rough justice hasn’t awaited the banksters who cooked up the crisis, or retired Fed Chairman Alan Greenspan who inflated the bubble, or the deregulators of the Bush and Clinton years.
But if the angry public reaction to this double-standard comes, it will be President Obama holding the bag.
Midweek Briefing: The consumer economy shows no signs of returning to its old habits. In July, consumer credit fell by 10.6 percent, a record $21.6 billion. It’s the sixth consecutive month of contractions.
–Where did that bailout money go? The distinguished business journalists Donald Bartlett and James Steele have the disturbing answers in a must-read Vanity Fair article.
–Michael Parks, who has for 29 years observed and analyzed the regional economy from his perch as owner of Marple’s Pacific Northwest Letter is retiring. The newsletter is being purchased by Eugene-based Random Lengths Publications. Parks will be editor emeritus through at least 2010.
–Seattle is the fifth-best metro of its size in the nation to attend college, according to a report from the American Institute for Economic Research. In addition to the academic environment, the report looks at quality of life and professional opportunities. New York ranks No. 1.
Today’s Econ Haiku:
The Bravern is brave
With consumers cowering
So who will blink first?