NEW YORK (TheStreet) -- The nation awoke yesterday morning to find that our president was right on the job. President Obama proclaimed that he wasn't going to let a recalcitrant Congress kick him around anymore."Obama's Mortgage Financing Plan: This Time It's Different," asserted a blogger at The Atlantic. The Obama administration is going to help underwater homeowners refinance, having correctly identified the lagging housing market as an enormous continued drag on the economy. Wouldn't that be great if it were so? A defiant president finally taking on the "do-nothing" Congress, just as Harry S. Truman did in 1948, and using the powers of his high office to help people, and not just to uplift them with speechifying. But as usual in such situations, when you dig down into the details of a new presidential initiative, the early enthusiasm wanes -- the way that early enthusiasm for the Obama presidency has waned pretty much from the beginning. Sure, the newly modified Home Affordable Refinance Program has a number of excellent new features. Borrowers can get low-rate refinancing if the value of the home is less than what is owed on it, regardless of how much equity homeowners have in their homes. This is great news. The problem with this plan is that in order to refinance, you've got to prove that you don't need to refinance. You have to be current in your mortgage payments for the past six months, and cannot have missed more than one payment during the past year. You have to have good credit. I haven't looked at the Federal Register or tried to figure out who dreamed up these requirements, but I have a sneaking suspicion that his first initial is "F" and his last name begins with "K," as in "Kafka." The result, as one housing finance expert told CNNMoney yesterday, is that the plan "may still only help a limited number of borrowers." I would interject that given these strictures, the number of the most desperate borrowers -- the ones close to being thrown out of their homes -- eligible to participate will be even more limited than "limited." The word that comes to mind is bupkis.
The bottom line seems to be a lot of sound and fury signifying no substantial decrease in the number of foreclosures. With foreclosures continuing to be a blight on the housing market, pulling down home prices for everybody, Americans will continue to see their net worth decline, and there will continue to be many other consequences, including the inability of homeowners to refinance via normal means or to get conventional mortgages to buy homes. Lower housing prices mean worse "comparables" during the appraisal process, making banks even more reluctant than usual to issue mortgages. "The administration appears to have accounted for all of the major obstacles to refinancing and eliminated them," opined The Atlantic. Correct. All you have to do is be in Grade A financial health and not need to refinance. For the rest of us, and for the neighbors and potential neighbors of the rest of us, it's continued depression in the housing market. Now, you may ask yourself, why is this even news? Why am I bothering to write about this? After all, Obama has been disappointing the people who put him in office since practically the day he raised his right hand at the Capitol. He appointed Timothy Geithner as Treasury secretary to appease the banks, Mary Schapiro as Securities and Exchange Commission chairperson to appease the large brokerages, and made terrific speeches to appease everybody else. His weakness, equivocating and double-dealing are old news by now. What makes this newest nonevent significant is that it is a kind of bellwether of the kind of election season that lies before us, in its unsurpassed pettiness and ugliness. I think the 1980 Jimmy Carter-Ronald Reagan campaign is an apt analogy, and so is the race in 1968 between Hubert Humphrey and Richard Nixon. It is going to be a contest between the less bad of two unsatisfactory alternatives. It is going to be a clear ideological choice, less because of any display of progressivism on Obama's part than the stalwart ultra-conservatism of the Republican pack. This being 2011 and not the 1960s, there is no possibility that the Republicans will nominate a Rockefeller or Percy; today a liberal Republican is as much an oddity as a Hassidic pig farmer. Instead we have a Republican field of contenders that seeks to outflank themselves on the right like crazed World War I generals.
So what can a moderate voter do? Voting against Obama is like voting against Humphrey for not sufficiently opposing the Vietnam War. Many followers of Eugene McCarthy stayed home on Election Day, despite McCarthy's lukewarm endorsement of Humphrey, and the result was six years of Richard Nixon. Carter constantly disappointed the people who put him in office, and the result was eight years of Ronald Reagan and an assault on regulation and the tax system whose repercussions are felt to the present day. It's obvious that a similar dilemma will face the voters a year from now. Obama has disappointed, is disappointing and will continue to disappoint the American people. He will continue to put forward programs that fail to adequately address the miseries of the electorate. His inability to take action will be exacerbated by a Republican-dominated Congress anxious to see his presidency fail. The result: a choice between the lesser of two evils. The problem is that Americans haven't always figured out that the devil you don't know may be considerably worse than the one you do. Gary Weiss's forthcoming book, AYN RAND NATION: The Hidden Struggle for America's Soul, will be published by St. Martin's Press on Feb. 28, 2012.