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Troubled homeowners get details about the Obama team’s foreclosure prevention plan, bringing a little sunshine to the doom and gloom of the current economy. The president is projecting calmness to soothe American fears, but rising political tension in Afghanistan could bring Obama headaches in the months to come. Obama earns 30 points on the Change-o-Meter today.
Struggling homeowners can start modifying their loans today, according to a detailed guide the Treasury Department released this morning. The two-part plan, which the administration announced two weeks ago, has already caused the stock market to jump after hitting successive record lows the past couple of days. But some say the plan doesn’t go far enough to reduce loan balances, particularly those that far exceed the home’s actual value; merely adjusting interest rates may not solve the problem. In addition, many in the worst housing markets, such as those in California and Florida, won’t be eligible for the two programs. The ‘Meter will give 15 points for bringing good news to some homeowners but is withholding further points until it sees how many others are left out of the deal.
Meanwhile, Obama issued an executive order to change the way contracts are awarded to private sector companies—a reversal from a Bush administration policy—which the administration hopes will save up to $40 billion per year. The new policy particularly targets no-bid contracts. While the ‘Meter is often skeptical of governing by executive orders, this one could have teeth if it works. And it has John McCain’s endorsement. The ‘Meter awards 15 points for a promising policy.
New political tensions in Afghanistan, following a recent car bombing outside a major U.S. military base, could mean trouble for the Obama team, which is counting on stabilizing that country. President Hamid Karzai’s plan to move elections up by several months was rebuffed by the country’s election commission, which means Afghanistan could be without a leader for several months between the expiration of Karzai’s term in May and the elections in August. The ‘Meter is monitoring the situation closely, as the coming months will be trying for everyone with a stake in the country.
Lastly, amid the turmoil of plunging stocks and decreasing retail sales, Obama is trying to leverage his high popularity to personally rally the market. Urging Americans not to pay too much attention to the fluctuation of the stock market, he advocates taking a long-term view to help get through the difficult times. Call the ‘Meter myopic, but it’s holding onto its points on this one, too.
There’s a lot to cover, so we want to hear your thoughts on what the Change-o-Meter should be taking into account. No detail is too small or wonky. E-mail may be quoted by name unless the writer stipulates otherwise.