The Financial Tsunami ( FT ) - The Way Forward ( 10 ) - Homing on Homes

One of Obama's wisest moves on his rescue package so far has just been unveiled. A home rescue fund of US$ 275 billion will be set aside to help refinance the home mortgages of up to 9 million " responsible homeowners " to allow them to stay in their house and avoid foreclosure by banks. Those who lost their speculative investments through greed and misjudgment at the peak of the property bubble in the USA will not be included in the rescue package and so will those who bought beyond their means. This is a fair condition in applying precious and limited taxpayers' funds.

Economically speaking, the logical thing to do is to let people bear the consequences of their own economic decisions. If they had bought at the wrong time let them lose their homes and stay in rented property. However, strict economic principles may be too harsh on the ordinary citizens who acted honestly and spent within their means. Speculators and greedy opportunists apart, most honest and hard working folks are mostly victims of an impersonal capitalistic system run wild. Sometimes, pure logic and dogmatic adherence to rigid economic principles are not user friendly. Take for example. We are in the desert with only a limited supply of precious water and there is a millionaire among the travellers. According to the strict operation of the sacred economic law of supply and demand the millionaire can bid the highest price and so is theorectically capable of getting all the water for himself to save his own life. However, common human decency and generally accepted moral standards will dictate a fair rationing of the precious and limited water supply. That is where the enlightened form of capitalism should come in. No single consideration or working principle relating to any public issue should dominate relevant decisions on the matter.

Economic considerations aside, the psychological effects on boosting the morale and confidence of the general population through such a home rescue package are bound to be far reaching to the point of arresting the rapid decline of consumer confidence. This will in turn produce its desired economic stimulus in terms of consumer spending especially from those who still have savings that are horded because of a gloomy economic outlook. So, it can be easily seen that everything is inter-related in all human affairs and, hence, my personal motto of " ONLY CONNECT " borrowed from the famous and beloved British novelist - E. M. Forster - in his revered novel Howards End.

Three cheers for Obama for landing an effective punch on the Financial Tsunami. This is just a start but hopefully it will be a good start for all global citizens' sake.

JKHC.