The idea has been around since the crisis began: instead of giving all the Federal money directly to the banks and hoping they do the right thing, why not help individual homeowners restructure their mortgages so they can actually make their payments? Finally President Obama is talking about doing just that.

The blogosphere is afire with similar sentiments; John Nichols elaborates:

"Whatever the cause of the delay, President Obama on Wednesday offered the response that was needed -- or, at the very least, a piece of the response that was needed.

The president proposes to take administrative actions to spend $75 billion of the Financial Stabilization Fund on facilitating modifications in existing loans and he wants to require lenders that are accepting tax dollars to adopt foreclosure prevention protocols to prevent unnecessary foreclosures.

These are meaningful steps.

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The president's ambitious plan could help as many as nine million American families that are currently struggling to make mortgage payments or whose homes are now worth dramatically less than the amount they paid for them. The housing plan uses incentives to homeowners and lenders to ease and encourage the process by which home loans can be restructured or refinanced to avoid foreclosure.

"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly," says Obama, who added that the plan would do this "by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments."

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This is not a particularly new notion, however.

Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair was promoting a plan to modify mortgages last fall.

Had the Bush White House and the Department of the Treasury listened to Barr -- and to members of Congress such as California Democrat Maxine Waters -- back then, hundreds of billions of dollars might have been saved. And the dollars that were spent might have actually gone to address the real crisis, as opposed to the demand from Wall Street for money to pay bonuses, bail out speculators and keep stockholders happy.

"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," Obama explained in Phoenix, where he announced his initiative. "But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."

We should have acted "boldly and swiftly" -- and in a fiscally-responsible manner -- last fall. Hundreds of wasted billions later, we finally are. For that, Barack Obama and his administration deserve a good deal of credit -- just as George Bush and his administration deserve a great deal of blame.

The lesson is an important one.

Focus on the people who are hurting -- not the bankers who are threatening them -- first."

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