Just as the Obama administration expanded a multibillion-dollar program to prevent foreclosures, the Federal Reserve was foreclosing upon on some of the country's hardest-hit homes.
The contradictory policies are just one example in a series of mixed messages issued by the government lately. It represents the rock and hard place between which the president stands and from which he will have to get away from if he wants to move the country forward.
For instance, the government is telling banks that they need to lend more to stimulate the economy. But it's also telling them to reserve more capital and enforce tighter underwriting standards.
The government has tried to humiliate banks for not modifying enough troubled mortgages through a federal program. But the government structured the program to exclude many types of troubled borrowers.
The government is telling banks to cut back on risky practices. Yet some regulatory proposals have hampered the banking industry's ability to manage and price risk effectively.
The government has criticized Goldman Sachs (GS), American International Group (AIG) and Bank of America (BAC) for crisis-era deals. But the government was either crafting the terms or goaded the firms into those very deals.
You get the idea.
The disparities are the result of two competing philosophies on how to approach ongoing economic stress. The Obama administration is attempting to use both of them at the same time, hampering any progress that either would make on its own.
There's the argument that appeals to emotion: Average people on Main Street are still struggling to make ends meet, and the government should be providing assistance to them. Then there's the argument that appeals to logic: There's no quick-fix solution to a crisis that was a long time coming, and despite all the artificial bailout Band-Aids, everyone will have to pay for the trillions of dollars in housing value that has been lost. Additionally, while there's a clear divide between Wall Street and Main Street right now, they rely on each other for survival.
The president undoubtedly understands all of this, as do administration officials and at least some of the people in Congress. But Obama and his Democratic peers are facing a crucial election season this fall, expected to lose some of their bicameral dominance.
While campaigning with the emotional argument, they're implementing a mixed bag of policy ideas, struggling to find a solution that sticks. The result is a mixed message that gives the impression that no one in charge truly has a handle on the situation.
The contradictory policies are just one example in a series of mixed messages issued by the government lately. It represents the rock and hard place between which the president stands and from which he will have to get away from if he wants to move the country forward.
For instance, the government is telling banks that they need to lend more to stimulate the economy. But it's also telling them to reserve more capital and enforce tighter underwriting standards.
The government has tried to humiliate banks for not modifying enough troubled mortgages through a federal program. But the government structured the program to exclude many types of troubled borrowers.
The government is telling banks to cut back on risky practices. Yet some regulatory proposals have hampered the banking industry's ability to manage and price risk effectively.
The government has criticized Goldman Sachs (GS), American International Group (AIG) and Bank of America (BAC) for crisis-era deals. But the government was either crafting the terms or goaded the firms into those very deals.
You get the idea.
The disparities are the result of two competing philosophies on how to approach ongoing economic stress. The Obama administration is attempting to use both of them at the same time, hampering any progress that either would make on its own.
There's the argument that appeals to emotion: Average people on Main Street are still struggling to make ends meet, and the government should be providing assistance to them. Then there's the argument that appeals to logic: There's no quick-fix solution to a crisis that was a long time coming, and despite all the artificial bailout Band-Aids, everyone will have to pay for the trillions of dollars in housing value that has been lost. Additionally, while there's a clear divide between Wall Street and Main Street right now, they rely on each other for survival.
The president undoubtedly understands all of this, as do administration officials and at least some of the people in Congress. But Obama and his Democratic peers are facing a crucial election season this fall, expected to lose some of their bicameral dominance.
While campaigning with the emotional argument, they're implementing a mixed bag of policy ideas, struggling to find a solution that sticks. The result is a mixed message that gives the impression that no one in charge truly has a handle on the situation.
