Welcome, Obama! Hello, Troubled Economy
As the man formally swears into office, we’re looking forward to a recovering America.
Barack Obama is finally in the White House and with the same enthusiasm in his speeches during the campaign, he promises to bring us all out of the recession currently lingering in our economy. Obama swears, “to restore the economy by creating jobs through public works projects, improving education, promoting alternative energy and relying on new technology.” That’s his promise and here’s what we’re looking for in the days to come as he and his team would finally walk the talk:
Stem the Foreclosures
This one’s already in the works as he’s bent on pursuing a halt in the rising foreclosures in the country. California, Nevada and Florida are just some of the most troubled states that have come from the devastating effects of the subprime mortgage catastrophe. If his $50-billion allotment for foreclosure prevention works out, the plan can tame the tremendous plummeting of home values persisting since last year.
Recapitalize the Banks
We’re a bit worried with their plan of creating a “bad bank” institution that would buy up financial institutions’ bad assets, such as mortgage-backed securities, which could hopefully minimize losses and help rebuild confidence in the market. It’s a wise move after the government has guaranteed large and small banks last year through the Troubled Asset Relief Program (TARP) but was caught in some issues including alleged large recipients’ misuse of funds for bank acquisition and weak oversight in terms of program implementation. We believe that if a “bad bank” shall be created, they’d have to prepare a larger budget to handle the toxicity of illiquid loans that will be acquired.
Provide More Employment
Construction firms are rushing to put their fingers in the public works’ pie. Obama’s goal of mitigating the rapid ascent of unemployment rates can work best for those in the construction business but for an investment banker or a mortgage broker who was recently laid off and is now struggling to make ends meet by waiting tables (this isn’t an isolated case), it would take a longer time to have a career comeback. Should Obama’s economic fine tuning through his stimulus plans change the credit landscape, businesses should be propped up to open its doors for the new 2.8 million job seekers waiting for their opportunities in the labor force.