Tuesday, October 25, 2011

Mortgage Refinancing: The Solution or Addition to the Problem


Recently the federal administration proposed a mortgage-refinancing plan. This plan would allow people whose loans exceed the value of their homes to refinance, which they are currently ineligible for. At present, 20% equity and exceptional credit are required to refinance loans. While the plan does have its benefits nonetheless, there are limitations (e.g. limited impact considering the housing market and economy as a whole) and criticisms of the plan (e.g. not radical enough). However, the mortgage refinancing proposal does attempt to minimize the effects of the failing housing market while preventing taxpayers from financing the industry’s failings.
        
This blogger agree with the proposed mortgage-refinancing plan. Lower monthly payments would go a long way towards minimizing the strain and stress of borrowers’ financial woes on a day-to-day basis. Moreover, people would only be eligible if they were consistently paying their loans. Therefore, there is a level of accountability. Additionally, the plan is a good median between full-fledged housing bailout and doing nothing. However, this blogger questions the long-term benefits of the plan. Evidence indicates even people who have not been financial impacted by today's economy are still tightening their purse strings. One only has to look at big business and corporations which continue to make profits but limit investments (e.g. job development). Therefore, while this plan will be directly beneficial to borrowers, this blogger is unsure it will have a significant impact on the overall economy and finances of the nation as a whole, as discussed in the article “Opposing view: Let the mortgage market heal itself.” This also brings into question to what extent people are financial responsible for their neighbors and what many consider their bad investment decisions.  

For more information on this topic refer to the following:

The USA Today's editorial “Mortgage refinancings could boost the economy.”  

The New York Times' article "On the Road to Relief."

The USA Today's article "Opposing view: Let the mortgage market heal itself" (referred to above).

Sunday, October 9, 2011

Occupy Wall Street Protests: Clear or Misinformed Message?

            In the blog article “A message that ‘should be obvious,’” Steve Benen mirrors the New York Times editorial claim that the Occupy Wall Street protesters’ message is obvious. The protesters are characterized as demanding improved economic conditions and proclaiming outrage for bank bailouts. Benen goes on to pit the Republican Party against the Democrat Party claiming the former is against the protests while the latter is in support. The blog concludes by summarizing the response of Washington—restoration of the middle class versus maintenance of the status quo—and proposes the 2012 presidential election will be the deciding factor on which vision for the economy prevails.
            Benen’s blog is an arm of the Washington Monthly, which is left-leaning. Additionally, Benen refers to the New York Times, another left-leaning media source. Thus, it’s safe to say the blog’s audience, are liberals. Moreover, mainstream media strives to inform the masses, therefore, the audience tends to be the general population. However, the blog assails politicians, spurring them to take action. Therefore, the blog reaches out to the masses as well as those in Washington.
            Generally speaking the New York Times is considered a credible news source. One would then assume Benen’s blog article, which predominantly draws its content from a New York Times article, is reasonably reliable as well. Additionally, Benen has an extensive biography legitimizing his journalism as cataloged by the Huffington Post.
            In some ways Benen’s message is accurate, it is essentially impossible to deny the protesters’ disgust with the economy, banks and essentially, big business. However, as Ann Coulter points out, the protesters support Obama, who bailed out the banks, yet hate Wall Street, who donated to Obama’s campaign. Despite this, Benen’s claims and evidence is in some ways self-evident. It’s uncontested that unemployment continues to average 9%. Thus, the root of the Oppose Wall Street protests—anger at the failing economy—is accurately highlighted. However, the quote “the economy is not working for most Americans” seems an exaggeration considering the statistics—approximately 91% of Americans are employed. Granted, this does not address whether or not they are underemployed.
Furthermore, Benen quotes the New York Times’ attack on regulators, elected officials and the rich in the name of the protesters. The blog’s source and its focus (the protesters) all smack of liberalism, which by definition favors government intervention to promote equality, including economic equality. However, as previously mentioned, the left-leaning protesters are attacking industries that financially support the Democratic Party, which passed legislature bailing out the same industries. Thus, it sounds like the pot is calling the kettle black. Moreover, the protesters are attacking the rich. However, empirical evidence “demonstrates that wealthier and better-educated citizens show a greater commitment to values such as fair play, diversity, and respect for civil liberties,” which contradicts the attacks of the protesters (Losco & Baker, 2011).
Also, Benen highlights the youthfulness of the protesters. Evidence indicates today’s youth lacks political knowledge, which is crucial to political consistency. This seems to be the general concern with the Oppose Wall Street protests, no unified, consistent message. Thus, some protesters appear to be rationalizing their political stances without consistent, supportive information as illustrated about.
Therefore, while there is some merit and supportive evidence for Benen’s blog article, it remains riddled with contradictions.