KEYWORD "REFORM"
*** Housing Crisis, Obama’s White Whale? Still, the president’s visit to Arizona is the practical focal point of the day, as he heads back to the site of his first presidential address on the faltering housing market, just weeks after he took the oath the first time. The president plans to point to Arizona as evidence of a recovery -- two years ago home prices were down 60 percent and banks were foreclosing on 70,000 homes a year. Now, home prices are up 20 percent from a year ago, but they’re still down 40 percent from their peak in 2006. And therein lies the White House conundrum on the economy in general and housing specifically. Things are better but there not nearly as good as they were. Today’s event is part of this summer push by the White House to do two things: 1) show the country he’s focused on the number one issue in their minds: the economy; and 2) he’s trying to get some credit for the recovery from the Great Recession. But of all aspects of the economy, getting credit on housing is not going to be easy. Republicans contend the housing recovery is simply happening because home prices finally bottomed out, arguing the market had nowhere to go but up. During his first term, close aides admitted that tackling the housing crisis was very difficult and they couldn’t find a silver bullet. Government couldn’t order banks to refinance. They tried some incentive programs but many of the programs didn’t help the folks who were most at risk. Sure, they helped on the margins but didn’t have the impact the White House had hoped at the time. All this said, what the president is rolling out today, calling for reform of the government mortgage agencies, known as Freddie and Fannie, to include more private capital so that taxpayers are more shielded from bailouts, on paper, should have a chance at getting some bipartisan support in Congress.
