I'm about to scratch out some thoughts on the housing plan itself. In the meantime, lemme say I thought the speech was very solid as rhetoric. Obama managed to boil down a pretty complicated situation. Take this riff in particular:
It [the housing crisis] begins with a young family -- maybe in Mesa, or Glendale, or Tempe -- or just as likely in a suburban area of Las Vegas, or Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, and they make a down payment, and they make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps somebody loses a job in the latest round of layoffs, one of more than 3.5 million jobs lost since this recession began -- or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments, or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave, you can't afford to stay. So you start cutting back on luxuries. Then you start cutting back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly 6 million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
Explaining why it's a problem when people's houses are worth less the value of their mortgage isn't the easiest thing in the world. Obama not only did it lucidly, he managed to emote along the way. I'm not sure he could have done better in terms of rallying political support for the plan.