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March 6th, 2009
12:37 PM ET

President Obama's "fair" warning

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/02/18/art.foreclosuresign.jpg]

Tom Foreman | Bio
AC360° Correspondent

On the untamed frontier of American grocery stores, I have noticed a change.

It used to be, whenever a new register opened on a crowded Saturday morning, a hell-for-leather stampede of desperate moms and dads lunging from the backs of the waiting lines, hoping for a checkout stand land grab. While shoppers closer to the front gaped at the unexpected onslaught triggered by people who could see the opening much more easily from where they were backed up in the paper goods aisle, the herd thundered forward. Tempers flared. Slim Jim displays were knocked to the ground. Sometimes innocent Soap Opera Digests were trampled. And finally amid much muttering and dirty looks, some pushy soul would plop down a box of Pop Tarts and declare victory.

Not anymore. These days what I most often see when a new register opens, is a checkout clerk stepping to the front of the adjoining line and asking that person if he or she would like to come over to be checked out next. It’s a lot less dramatic, but I don’t hear complaints, because deep in our American soul I think we all know what’s fair: The person who has been in line longest should be served next.

I bring this up because, if a recent poll is to be believed, President Barack Obama has taken his first step onto the dangerous ground of doing something that he clearly thinks is right, but that Americans think is unfair. A national poll by Quinnipiac University finds that 64 percent of you feel like his plan to bail out people who are in danger of losing their homes is unfair to others who pay their mortgage bills on time.

The equation is simple. Even if people made reasonable mistakes that landed them in mortgage trouble or if they were lured into shaky deals by disreputable lenders or if they fell victim to a lost job or unexpected expense, many voters just don’t like the idea of some getting help while others foot the bill.

There is majority support for the bailout despite that feeling, and that says a lot about either the generosity of Americans or their instinct for self-preservation. After all, the information has been spread far and wide about how much more our economy might tank and how much lower housing prices might drop if we don’t dam up the foreclosure flood.

Without a doubt, President Obama still enjoys tremendous public support and the nine million families that the government hopes to help are more than thrilled. But like motherhood, apple pie and the flag, fairness is something politicians play with at their peril.

soundoff (25 Responses)
  1. Annie Kate

    I don't mind helping those in foreclosure trouble. I know there are some who made foolish decisions and bought more than they could afford but there are also those who are in trouble because they lost their jobs, or they became ill, etc. And like it has been pointed out – the houses of those of us not in trouble right now will go down the more foreclosures there are. So what if its not fair – we weren't promised fairness in life.

    March 6, 2009 at 8:20 pm |
  2. Mac -- San Jose, Calif

    I know this is a serious subject, but your opening paragraphs are hilarious - thanks for the giggle (sorely needed these days).

    March 6, 2009 at 6:24 pm |
  3. Dotto

    When my wife and I purchased our first home (1977), the lender offered 3 formats: 1) 25% downpayment @ x% interest rate, 2) 35% downpayment at x%-.25% interest rate, or 3) VA loan at 10% downpayment. And you could NOT obtain a loan if your fixed payments were greater than 35% of your gross income.

    It took us 2 years to save for our 20% downpayment on a $24,000 home. What's wrong with requiring people to acutally have equity in the home? Is instant gratification necessary? And why should you be able to obtain a $300,000 loan with no money down or a 125% Home Equity loan? There's nothing backing it.

    The greed of an industry, left un-checked by enforcement of rules and guidelines, will always be taken to the extreme. We just had this experience in the "tech bubble" when 10 new tech companies were being taken IPO daily by these same financial houses. This was done with nothing but the excitement of instant wealth if you were one the fortunate who got shares, ran them up 30% and bailed while the rest rode it down to junk status. Deja vu all over again!

    March 6, 2009 at 5:14 pm |
  4. James C. Barnes

    People are cheap and have no moral values like the ones many profess to have. They also can't figure out that by saying let them lose their homes they are hurting themselves. If they want their property values to come back up and the economy to reverse it downward trend foreclosiers must stop and people being thrown out in the street is no good for anyone. We all know love thy brother as ones loves himself were wasted words and teachings even from Jesus. People are so dumb they don't realize they are going to pay in unemployment food stamps and other benefits to those people evicted.
    President Obama should have put a moratorium of foreclosiers and told the banks fix these loans. They own them and it is their duty to work something out with the borrowers to fix them. There should be a two year wait before they can foreclose to give the home owner a chance to change their cercumstances to see if they can find a way to pay the loan. The loss of interest for those two years is little to what the banks are losing by foreclosing on properties.
    The banks have no mercy even if they contributed to the problem. We are also seeing they take no responsablity for their actions. Few of the people who have been foreclosed on bought those homes in bad faith but they fell victem to circumstances beyond their control. The people in those polls would be the first to yell for help if it was them in the bad situation.

    March 6, 2009 at 4:42 pm |
  5. Dulcie - Denver

    I've been pretty appalled at how many people absolutely do not want the government to help their neighbors. Maybe President Obama can give each of them a gold star for not getting destroyed by our economy.

    I fall back on what my mother told me. She wasn't a nice woman and if I had the gall to whine about something that seemed unfair to me, she'd tell me, "Life isn't fair! Get over it!"

    March 6, 2009 at 4:34 pm |
  6. Wardell katrina survivor

    Tom, where do you get some of these people from, where have they been for the past eight years, I suppose making a killing on the stock market, along with all the other republican RIPP-OFF artist, don't blame democrats for your blunder, "PAT" you backed the wrong party to long,now we have to pay for your GREED, as if nobody else is suffering because of George,Dick,and the repub. crew's fanasy economy, the MONEY, was gone a long time ago, the Republican RIPP-OFF crew made sure of that, it's your fault that you were not in the "CLICK", What's being done now is for ALL, of america,and hopefully oneday ,all can prosper, not just a few, so get over yourself, go sit in a corner and suck your finger,maybe that will passify you,OUR country is in trouble, because of your GREEDY REPUBLICAN con men and women .

    March 6, 2009 at 4:02 pm |
  7. CL

    Which Poll are you referring to when the Author says Americans support this stimulus bill. The only people I have heard is support of it are Liberal news anchors, and psuedo Republicans that CNN marches into studio and pay money too. I have taken a poll also, albeit unofficial, still a poll. No better or worse than a poll delivered by a Liberal news station with liberal viewers. Without exception, no one wants to give the government upto 40% of their salary. The problem is the way the question is asked, and your producers know it. The 40% is what we will be paying in taxes in two years, to cover this sham. One of your polls today ask about healthcare. In it, 66% of people that participated stated they were satisfied with the health-care provided through their job. So 34% of people either did not think it was enough, or were not able to get insurance. In that number ( 34 % ), there are people who chose not to take insurance though work ...... I don't know how many that is, but when 1/3 of Americans can force their will on the other 2/3's, we have a problem. It's a Democratic Republic, for now anyway.

    March 6, 2009 at 3:54 pm |
  8. JIM FALLBROOK CA

    The devestating impact that the current administration has had on the stock market it is unlikely that anybody will ever be rich. This prompted some economist to predict that we have a 30% chance to go into a depression. If we do, I am sure Barack Hussein Obama will blame George Bush. However, he should be advised that no economist made that prediction while George W. Bush was president. Obama's motive is to have the poor, working and middle class dependent on the government like BIG Brother. This is to ensure the democrats stay in power. I just hope the American ppeople who voted for Obama wake up and vote the democrats up for election in 2010 out of office.

    March 6, 2009 at 3:41 pm |
  9. Kate

    Here is the deal:

    I am a homeowner in a neighborhood where there is one foreclosed house that was empty for 7 or 8 months. The neighbors pitched in and mowed the lawn, picked up the trash, called the police when it was vandalized, and watched the house for unusual activity. The bank repo "For Sale" sign changed RE agents a couple of times, but we breathed a collective sigh of relief when the painters finally came to paint the interior for new owners. This is the grief for ONE house - mutiply that by 2 or 3 or 4 for some suburban blocks. For other mortgage holders in the neighborhood, mortgage relief is cheap at twice the price.

    This phony indignation about mortgage relief rings very hollow to real people in real neighborhoods - just more well-funded fake/PR hooey.

    March 6, 2009 at 3:33 pm |
  10. Lisa in CA

    There is a way to be fair ... mandate a drop in interest rates to EVERYONE on their mortgages. Those who have been paying on time, give them 0% for a year or maybe 1-2%; those with okay credit 3-4% and those with bad credit 5%. Do the same thing with credit card and auto and business loans. The banks may not like it, but they did help get us into this mess. As such, and since they are getting my taxpayer dollars to help them out, they need to "give back" and help us out.

    We've seen that aftermath of Tricke Down economics from the Reagan administration; we've seen it with the Bush II administration; and it will not have a different result with the Obama administration.

    People may think it is unfair that they've been good and are being penalized, but it's also not fair to people who have worked hard and suddenly find themselves without jobs and losing their homes. People need to remember that "but for the grace of God go I" and while they are complaining need to remember that they may find themselves in the same situation. They need to ask themselves if they did everything right and found themselves in this situation, wouldn't they want help as well?

    March 6, 2009 at 3:23 pm |
  11. Pat Matassarin

    Just wait. Most of us have heard the saying " I'm not poor enough or rich enough to be a Democrat". I think that I've unraveled the mystery. Given the devestating impact that the current administration has had on the stock market - it is unlikely that I or the rest of the "middle classers" will ever be rich - but there is a very real possibility that we are all headed for the poor house. All of the activity by the Democratic Congress in throwing away all the money that the Country has or can muster for the next three generations has been designed to ensure that we will all be poor - and thusly Democrats!You know, their strategy just might work. They are intentionally CREATING ( or buying) more Democrats.

    March 6, 2009 at 3:06 pm |
  12. James L. Whittington

    Americans have a history of helping others. So what's so different now with housing? Lets look at the following example:
    An elderly couple owns a beautiful home and pays above average taxes, never had children. In their community a family lives in a modest priced home wih six children attending the local public schools with three of the children in special education. Consider that the average cost/ year of regular schooling is $12,000 and special education is $18,000 per child and all six receive free lunch. If my arithmetic is correct, it cost this community close to $100,000 per year to education these six children. Is it fair for our elderly couple to pay up to twice as much school taxes vs our 2nd family if they have never had children?

    March 6, 2009 at 2:17 pm |
  13. wesleywhatwhat

    specious reasoning.

    March 6, 2009 at 2:05 pm |
  14. Bob VanB

    Yes and people are becoming aware enough to realize that solutions are not always 'fair' but if they fix a problem its what needs to be done.

    I mean, want an easy to conceive massive jump start to ending the recession? Have the government buy up all the outstanding credit card debt in the US at about 60¢ on the dollar ($500 billion or so), cancel all cards and require tougher standards on the issuing of new ones both in chargeable interest and limits.

    Bingo! The major 'debt reduction' drain on homes would be eliminated, most people would once again be able to pay their mortgages and spend some money at the mall and the recession would soon be a receding memory.

    Totally unfair to people like me who pay off their cards every month, but would fix so many problems for so many people who don't.
    and our nation too.

    To paraphrase an old homily 'The world isn't fair and sometimes your rewards will have to wait for heaven.' People are just getting bright enough to realize that sometimes that's really true and this is one of those times.

    March 6, 2009 at 2:00 pm |
  15. Tim Bergsten

    I pay all of my bills on time. I have a good job. I work hard. I am very fortunate. Our country has economic problems because of decisions made in Washington and on Wall Street, AND because of the way most Americans choose to live...in debt. This includes me. All of us must change our behavior. Change the way we save and spend. And, more than ever, we're going to have to stand together as U.S. citizens. But we don't need to stand against our government. We need to stand up and help our neighbors in whatever way we can. If this means my neighbor is bailed out, but I see no monetary reward, that's fine by me. I'll be happy for my neighbor because I realize I am very fortunate.

    March 6, 2009 at 1:59 pm |
  16. Aileen

    Hi Tom,

    I try to tune into CNN every chance I get the
    programs are very enlightening.

    My question to you and the rest of the team is
    in relation to the tax free/penalty free withdrawal
    from your 401Ks that President Obama had mentioned
    while he was campaigning. I have not heard it that mentioned
    again. Are there any updates on this?

    Thanks,
    Aileen

    March 6, 2009 at 1:51 pm |
  17. Jim

    Much of the bailout is wrong, but enabling homeowners to stay in homes they never should have bought (or been able to buy) in the first place is foolish. Spending billions of taxpayer dollars to do so is inane.

    I don't mind some kind of help for people who simply got in over their heads and can't get out. But, that'd be the best kind of help - helping people to get out without bankruptcy. Instead, we're going to basically pay a major portion of the mortgage of people who made some really dumb decisions (buying houses with monthly mortgages of 40% or more). I don't see any assurance that they'll make good financial choices in the future.

    The worst thing about the whole stream of bailouts is the message that it embeds in our financial psyche - whether you're a bank, a business, a car company, or someone who buys too much house; don't worry the government won't let you fail, no matter how much it costs to save you. In case anyone missed it, THAT is not the free market.

    When you hear about people who became phenomenal successes, they have often had spectacular failures that they learned from. The government is now in the business of making sure no one fails.

    March 6, 2009 at 1:31 pm |
  18. Marie

    High cost at the supermarket are certainly on the rise- I spent more time checking prices than standing on line– Thinking that a victory garden(WWII) might help, my daughter (nutritionist) told me that seeds available have problems- Is this true?

    March 6, 2009 at 1:27 pm |
  19. Michael "C" Lorton, Virginia

    Who said---life is fair? Obama can help some of the people some of the times--but he can't help all of the people all of the times--help those who need it--–because since life is not fair--we might just be next--and yet--it will still be unfair-right? It all depends where you are in line when you check-out.

    March 6, 2009 at 1:24 pm |
  20. Michael "C" Lorton, Virginia

    Who said---life is fair? Obama can help some of the people some of the times--but he can't help all of the people all of the times--help those who need it--–because since life is not fair--we might just be next--and yet--it will still be unfair-right? It all depends where you are in line to check-out.

    March 6, 2009 at 1:24 pm |
  21. Arachnae

    Tom – what polls don't tell you, because of the way the questions are placed, is the number of people who don't like something but think it has to be done anyway.

    Many kids don't like having to do homework. A lot of people hate having to have their cars repairs. If you took a poll of women, I suspect a pretty large majority would dislike mammograms. Does that mean they're against them?

    March 6, 2009 at 1:22 pm |
  22. toadman

    There will always be people who take advantage of the system. But this cannot keep us from helping people who made mistakes, or bought too much house. Why? Sound illogical? It shouldn't. Letting a house go into foreclosure in your neighborhood would lower the value of your own home, the same way having a crack house on your block would.

    It just doesn't matter, anymore, who gets the money...it ALL needs to be propped up. I don't like bailing out the moron either, any more than anyone else, but it has to be done to save MY house value.

    March 6, 2009 at 1:22 pm |
  23. Marie

    Having a 15,000 tax credit was a good idea, however it should and would have made a difference if it did not only cover low cost homes- I do not see people buying low cost homes needing the 15,000 tax credit – however those who have money, and do not trust the stock market might have bought- and given a shot in the arm to the housing market.

    March 6, 2009 at 1:06 pm |
  24. Rick

    Home Owners Union of America

    I am getting sick and tired of coming home every night and listening to congress, the bank, economist, making promises, they will never keep.

    So I decided to create the Home Owners Union of America, this union will never have any union dues, it will always be free.

    There is only one demand from the union. ALL banks and lending institutions will allow home owner role forward. What is a Role Forward? Any home owner can send the bank a role forward notes’ at any time. The interest and principle will be moved to the next month. The loan length will just be 30 years one month long, but the loan will only pay interest for 30 years. There will never be any kind of charge for this service.

    Like all union the power is in the membership, if we all stick together, what can they do for close on 100,000,000 homes? We are the police, secretaries, and clerks, and paper work guest lost every day.

    The Home Owners Union of America is calling for a boycott starting April 1 to June 25, 2009. Sign and place your pelage on your refrigerator door.

    I _______________________pelage, to NOT make a house payment from April 1 to June 25, 2009. I also pelage to save half of my house payment in to a savings account. I will encourage and support all other Home Owners Union of America members, and promote and encourage all home owners to make this pelage. I will also protect union members from, intimidation, for any and all sources.

    March 6, 2009 at 12:59 pm |
  25. Maria

    May God give President Obama the wisdom and help Americans to revive the economy. In politics, many people wish President Obama to fail and might keep fighten his policies, but they forget that the majority of US people elected President Obama and they put faith and hope on him.
    President Obama is on the center of the stage since Sept. 2008 and politicians will continue keeping him under the radar.

    March 6, 2009 at 12:52 pm |