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Nov 29

Written by: Diana West
Sunday, November 29, 2009 6:26 AM 

What would Poor Richard's Almanac make of this?

Side by side across the top of the front page of the New York Times today are two economic stories: "US to Pressure Mortgage Firms for Loan Relief" and "Food Stamp Use Soars Across the U.S., and Stigma Fades."

From the mortgage story:

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled home owners, as evidence mounts that a $75 billion taxpayer-financed effort aimed a stemming forclosures is foundering.

"The banks are not doing a good enough job," Michael S. Barr, Treasury's assistant secretary for financial institutions said ... "Some of the firms ought to be embarassed and they will be."

Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage ... and only a tiny fraction have been made permanent.

Mr. Barr said the government would try to use shame as a corrective, publicly naming those insitutions that moved too slowly to permanently [sic] lower mortgage payments. The Trreasury Department will also wait until reductions are permanent before paying cash incentives to mortgage companies that lower loan payments.

"They're not getting a penny from the federal government until they move forward," Mr. Barr said ....

From the food stamp stigma story:

[A] program once scorned as a failed welfare scheme now helps feed one in eight Americans ... becoming nearly as ordinary as the groceries it buys. More than 36 million people use inconspicuous cards for staples ...

While the numbers [of food stamp users] have soared during the recession, the path was cleared in better times when the Bush administration led a campaign to erase the program's stigma, calling food stamps "nutritional aid," instead of welfare, and made it easier to apply. That bipartisan effort capped an extraordinary reversal from the 1990s, when some conservatives tried to abolish the program, Congress enacted large cuts, and bureacratic hurdles chased many needy people away ....

Although the program is growing at a record rate, the federal official who oversees it would like to see it grow even faster.

"I think the response of the program has been tremendous," said Kevin Concannon, an under secretary of agriculture, "but we're mindful that there are another 15, 16 million who could benefit." ...

Once upon a Protestant-work-ethic time, shame and stigma were potent forces shaping a resilient, independent and responsible people. Now, they -- and, just as important, their absence -- are being used by the Bush-to-Obama administrations to expand and entrench a nation of government dependents beholden to the federal government -- all the assistant enablers and under overseers who are increasingly assuming the characteristics of a good, old-fashioned Soviet-style nomenklatura.

 

 

 

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