The Political Smoke and Mirrors Solution to the Real Estate Crisis

I was very interested to hear what President Bush was going to say this morning concerning the mortgage crisis we are facing in America. I figured it would be more of a political answer than a real solution.

He actually identified the real problem being the adjustable rate mortgage. He also made a point of saying that it was not the government's job to bail out speculators. (read: we are not going to bail-out the homeowners who are in trouble)

The Government cannot just step in and bail out the mortgage crisis. It would be rewarding mortgage companies and banks for being irresponsible and greedy.

He made some references to a few changes that really would not help all of the homeowners who are facing this ominous situation in the future. He basically offered up the political smoke and mirrors solution.

He made a big speech acknowledging the problem. Then assured the America people that they were going to implement some changes that will help solve the problem. It is the political smoke and mirrors answer. In politics, you just have to look like you are solving the problem when really you are just crossing your fingers and hoping it will blow over. (read:Irag)

The mortgage crisis in America will have to work itself out over time. This is the bursting of a major debt bubble with the mortgage crisis being the final phase of the bubble. You don't just take 25 years of debt accumulation and expect that the problem is just going to go away. We will have to go through the "de-tox" process.