On poor economy and help to homeowners in mortgages...

The so-called policies put forth by GOP normally don't make much sense to me, but they're right about one thing: Obama shouldn't be pushing for mortgage modifications to help homeowners who are underwater, with big mortgages worth more than the underlying property. As it is, liberal media like NYTimes is advocating exactly that, that federal government should help struggling homeowners by forcing banks to modifying loans.

I'm no economist, but the policy makes little sense to me. What's more important to the economy is jobs and the income generation, and not wealth protection (ie. protecting the value of the property). Albeit all the reports that property prices have come down alot, in some states, significantly lower than the peak at 2008, the price level is still considerably higher than what it used to be. Those artificially inflated prices were propped up by outsized leverages that needs to be rid from the system. The market has its way of finding its equilibrium by having prices come down (and supply increasing) to a level where demand can meet. It's unreasonable to expect the government to step and get banks to artificially lower the outstanding mortgage or interest rate on the loans (thereby forcing banks to eat the losses), in order to allow the carpetbaggers to stay in their properties. In the logic of the government, doing so would provide much needed support to the property prices. When people feel wealthier, they'll spend again, so the thinking goes.

There is also the push to get banks to lend again. Given that general financial conditions of the populace are still rather dire, it's only fair and prudent that banks don't want to lend. I don't see much problem with that. Obviously, if banks are getting effectively free cash from government, with an obligation to lend, it could be a different matter.

To be sure, it doesn't matter how low the property price level goes, any sane person won't jump onto a 30-year fixed mortgage if s/he is not sure whether their job is safe. Afterall, that's the prudent and right thing to do. As the contemporary thinking goes, people should buy properties again, if it's low enough. If you ask me, I'd tell you, that is but one of the many factors that I would consider long term fixed investment like real estate.

In this respect, both GOP and Dem/Obama are suspects, in pushing for mortgage help to underwater homeowners. It amounts to a move to appease voters to buy their votes. I don't buy that. I don't want the burden and responsibility to get push down to the future generations.