Although more than three-out-of-four Americans believe President Obama’s plan will help the housing crisis, the new administration continues to struggle with public perceptions that the plan rewards bad behavior – a belief underscored by a YouTube phenomenon set off by CNBC editor Rick Santelli, who asked derivatives traders, “Do we really want to subsidize the losers’ mortgages?”
Speaking from the floor of the Chicago Board of Trade, Santelli charged the president with crafting a housing bailout that punishes millions of people who bought a house responsibly and have been making timely mortgage payments.
“Government is promoting bad behavior,” the former trader said on his network. “Do we really want to subsidize the losers’ mortgages?”
As derivatives traders raucously called out in agreement, Santelli gestured to them, declaiming, “This is America! How many of you people want to pay for your neighbor’s mortgage? . . . President Obama, are you listening?”
Later, Santelli called for Obama to put his housing plan to an internet referendum and suggested a new Tea Party to protest the housing plan.
Since the segment first aired on CNBC, it has been viewed more than a million times in various forms on YouTube.
White House press secretary Robert Gibbs quickly responded to the populist tirade.
“I’m not entirely sure where Mr. Santelli lives or in what house he lives,” Gibbs told reporters with palpable derision.
“I think we left a few months ago the – the adage that, if it was good for a derivatives trader, that it was good for Main Street. I think the verdict is in on that,” Gibbs went on to say.
“Now, every day when I come out here, I spend a little time reading, studying on the issues, asking people who are smarter than I am questions about those issues. I would encourage him to read the president’s plan and understand that it will help millions of people, many of whom he knows.”
Gibbs added, “I’d be more than happy to have him come here and read it. I’d be happy to buy him a cup of coffee, decaf.”
The $75 billion anti-foreclosure plan, coupled with an additional $200 billion in backing for Fannie Mae and Freddie Mac, is expected to help up to 9 million homeowners stay in their homes.
In an indication that the administration is wary of a perception that the plan helps people who acted irresponsibly, Gibbs insisted it did not.
“It won’t help somebody trying to flip a house. It won’t bail out an investor looking to make a quick buck,” Gibbs said.
“It won’t help speculators that were betting on a risky market. And it is not going to help a lender who knowingly made a bad loan.”
Nevertheless, it remains inevitable that the Obama plan will at some point help someone undeserving.
Barely a month into the Presidency, Obama has inherited several economic and foreign policy issues – each with a distinct potential for catastrophe – where he has been forced between several unsavory options, and the housing crisis is no exception.
While few experts claim to have definitive answers to any of these complex dilemmas, the nascent Obama administration finds itself struggling with easing public misgivings about venturing into an unknown with a multi-trillion dollar price tag.
On Monday, Rassmussen released the results of a telephone survey of 1,000 adults conducted over February 21-22, 2009
Fifty-five percent (55%) of respondents said the federal government would be rewarding bad behavior by providing mortgage subsidies to financially troubled homeowners. Among investors, 65% held that view.
Although 51% of Democrats disagreed, 77% of Republicans and 60% of those not affiliated with either major political party agreed that it rewards bad behavior.
Over 75% of Americans said they were not willing to pay higher taxes to help people who cannot afford to make their mortgage payments, with just 14% saying higher taxes for this purpose were acceptable.
Most Americans – 53% – opposed a plan for the federal government to pay off a portion of the mortgages only for people who can’t afford their current payments.
Thirty-two percent (32%) said they though it was a good idea. Support for that plan was even lower among homeowners.
A week earlier, 45% of Americans opposed the federal government subsidizing mortgage payments for financially troubled homeowners.
However, Obama’s prime-time speech on Tuesday night appeared to be widely effective in bolstering support for his actions.
A poll conducted by CBS following the speech found that 80% of speech watchers approved of President Obama’s plans for dealing with the economic crisis, compared to just 63% before the speech.
Seventy-five percent of speech watchers said they were able to get a good understanding of President Obama’s economic plans, compared to 58% before the speech.
Among speech watchers, 76% thought Barack Obama’s economic plans would help the housing crisis, and 80% said they are optimistic about the next four years with Obama as president.
Seventy-one percent said they were optimistic before the speech.