Creating the illusion of help…

Recently I heard a report in the news that only a few thousand people have actually been helped by all of the Federal programs that were created and ballyhooed in press conferences and telecasts as our saving grace. Like much of what comes from politicians at almost every level, this was high drama, meant more for the press and photo-ops that it provided for them than for the little people in the trenches who are battling to save their homes. Not a day goes by when either President Obama or some Congressman or Senator doesn’t remind us all of the bills that they’ve passed in Washington to help us all out here in the boonies.

It goes a a little like this…”Harrumph, harrumph, harrumph, we’ve passed legislation that will encourage the banks to make loan modifications rather than foreclosing on homeowners.” To which the banks replied – “Yawn!” “Harrumph, harrumph, harrumph, we’ve asked those banks who took TARP money to do everything in their power to enable homeowners to modify their loans, so that they can stay in their homes.” To which the mortgage lenders replied, “Yeah, right.”

Why the lack on compliance on the part of the lenders? Two reasons – there are no real penalties in the bills that asked nicely for them to cooperate (their lobbyists did a better job that the homeowners’ lobbyists) and the banks would rather wait to see if maybe the Feds will eventually buy all of these bad loans off their books. That’s also why they aren’t in a rush to do short-sales. The lenders are all awaiting the creation of the rumored “bad bank” to buy up their bad assets.

In the interim, everybody concerned, the politicians and the lenders all need to appear to be doing something, to be empathetic to the plight of the constituency (or at least a part of it, the contributors to their campaigns being the only constituency that they really care about).
So, they go on… “Harrumph, harrumph, harrumph we’re passing bills to protect the little guys, the homeowners. It is unfortunate if the lenders will not join us in this collective harrumph. Now where’s my next press conference scheduled?” Politicians have become such masters of illusion that they should be required to join the magicians union.

Meanwhile, out in the trenches, when the illusion of help fades away and the reality of losing their houses sets in, the natives are getting restless. At some point there will be a revolution, likely a quiet one, but a revolution none the less, that will sweep from office all of these self-serving illusionists and put some solid hard working citizen-politicians in power. Of course, they'll have to rent a place to live in Washington, since they probably will have lost their homes in the "great recession" and be unable to get mortgages from the friendly, TARP-funded bankers.