Binyamin Appelbaum looks at how the Obama administration's effort to "finesse the cleanup of the housing crash", while using blunt instruments to aid the auto and financial industries, resulted in a program "that failed to meet even its own modest goals."
With the housing market finally beginning to recover, after dragging down the recovery and threatening Obama's reelection bid, some are wondering what might have been if the administration's housing response had been designed and implemented differently.
"They were not aggressive in taking the steps that could have been taken," said Representative Zoe Lofgren, chairwoman of the California Democratic caucus. "And as a consequence they did not interrupt the catastrophic spiral downward in our economy."
According to Appelbaum, "some economists and political allies say the cautious response to the housing crisis was the administration's most significant mistake."
Despite the 20/20 hand-wringing, Appelbaum says "it is impossible to know whether a more forceful response would have produced better results. Administration officials argue that the missed opportunity was relatively small because mortgage companies were unprepared to help homeowners even if the government had pushed harder - and the government was unprepared to take the companies' place."
Nevertheless, Appelbaum traces the missed opportunities that could have triggered a more robust housing rebound than the one we have today.