Mr. Fix-It doesn't have a credible plan to fix the economy's biggest problem
What's black and white and red all over? I have no idea. But here's what I do know. Mitt Romney's housing plan is an even worse joke.
It's hard to imagine a bigger vulnerability for Obama than housing. The administration's policy has been too little, too late for too long. To borrow a phrase from Ben Bernanke, it's been a case of self-induced paralysis due to a pair of fears. For one, they were worried about forcing banks to recognize even more losses on mortgages back when the financial system's solvency was far from a sure thing. For another, they were worried about a Rick Santelli-led populist backlash against bailing out "loser" homeowners.
So they went small. Refinancings have barely been a rumor, even after Treasury expanded the program. That's still more than can be said for writedowns. Federal Housing Finance Agency (FHFA) chief Ed DeMarco has blocked those -- and Obama has inexplicably refused to recess appoint his replacement. The result has been a tragedy, both for families and for taxpayers. As the New York Fed pointed out, we would save $134 million for every $1 billion of refinancings thanks to lower default rates. It turns out keeping people in their homes is good for everybody.
In other words, Romney had a big opening to go big on housing. Maybe he would come out for a massive refinancing program, like his top adviser Glenn Hubbard wants. Or maybe he would come out for privatizing the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac.Something. Well, the Romney housing plan certainly is something -- something "laughably vacuous" that is, as Matt Yglesias of Slate justifiably lampoons it.
The Romney housing plan comes in two parts: embarrassing, and more embarrassing. Consider this section about fixing the financial system and the GSEs -- and all, as Brad DeLong points out, in 85 words or less!
End "Too-Big-To-Fail" And Reform Fannie Mae And Freddie Mac. The Romney-Ryan plan will completely end "too-big-to-fail" by reforming the GSEs. The four years since taxpayers took over Fannie Mae and Freddie Mac, spending $140 billion in the process, is too long to wait for reform. Rather than just talk about reform, a Romney-Ryan Administration will protect taxpayers from additional risk in the future by reforming Fannie Mae and Freddie Mac and provide a long-term, sustainable solution for the future of housing finance reform in our country.
There are so many problems crammed into so few words. For starters, too-big-to-fail is not about the GSEs; too-big-too-fail is about Wall Street. In other words, it's about the heads-we-win; tails-taxpayers-lose calculus behind big bank bets. Taking the GSEs off government life support does nothing to fix this. Then, of course, there's the question of what reforming the GSEs means. Romney says he won't "just talk" about it -- which makes sense, since he doesn't talk about it here either. It's anybody's guess what Romney wants to do with Fannie Mae and Freddie Mac.
But there are ways to actually end too-big-to-fail. One way is to tackle the "too big" half of the phrase; the other is to take on the "fail" part. In other words, you can either break up big banks until they are small enough to fail, or create a system where big banks can safely fail. Dodd-Frank tries the latter. Its logic is that even a relatively small bank like Lehman Brothers -- or a hedge fund like Long-Term Capital Management -- can topple the financial system if its counterparties are big and numerous enough. Too-connected-to-fail can be just as much a problem as too-big-to-fail. Now, there's still a political economy argument for breaking up the big banks -- so they aren't quite as powerful -- but it seems clear that we need some sort of resolution authority. Except to Romney. Perhaps. He thinks Dodd-Frank is too complicated -- maybe it is! -- and he thinks its Byzantine structure is holding back the recovery. He wants to repeal and replace it with ... something.
Sensible, Not Overly Complex, Financial Regulation That Gets Credit Flowing Again. By replacing the Dodd-Frank Act with sensible regulation (instead of the 9,000+ pages, and counting, of new rules for financial institutions), a Romney-Ryan Administration will usher in a new era of responsible lending. Sensible regulation will allow banks to approve loans for families with good credit rather than rejecting their mortgage applications. A return to more normal lending standards would produce an estimated 640,000 more home sales and 320,000 jobs next year.
Did you catch that Romney wants to do something sensible? What does that mean? Who knows! Something sensible, probably. What about Romney's claim that nixing Dodd-Frank would add 320,000 jobs in 2013 -- is that a sensible? Not so much. Would you believe it if I told you that number comes from the National Association of Realtors (NAR)? Yup, these guys.
That was from Feburary 2008, two years after housing prices peaked. That uncomfortable reality wasn't lost on NAR when they cut this ad two months later, telling people not to worry about falling prices -- increased affordability! -- because housing tends to double every decade.
I could go on. The point isn't that a self-interested group was epically wrong about a once-in-a-generation housing bust. That's true of plenty of others. The point is that Romney is relying on a self-interested group that has been epically wrong to make the case for his -- albeit, nonexistent -- housing plan. It'd be like listening to this guy about, well, anything.
It didn't have to be this way. Conservative wonks have serious ideas about what to do with housing. Mitt Romney even employs some of them as his top advisers. This ambiguity is even more baffling when you consider our jobs slump is the result of our investment slump, which is itself the result of our residential investment slump. Fix housing and you might fix the economy. Now, housing might already be fixing itself, but helping it out would be great policy -- but equally terrible politics.
Obama isn't the only one afraid of anti-bailout rage. Romney is too. Maybe even more so. After all, Romney is counting on the Santellis of the world to back him. And that's why Mr. Fix-It is running on a housing plan short of an actual plan -- a plan that actually fixes things wouldn't pass the Tea Party's ideological sniff test. It would mean helping out homeowners who might not "deserve" help. As Paul Krugman pointed out, Romney is boxed in. He feels like he has to kowtow to the base, but the base does not want to kowtow to the reality of what it will take to get the economy moving again.
Romney is running as an economic expert, but his economic plans either do not add up or do not exist. That leaves him with little more than magical thinking. The joke's on us.
When something goes wrong, I start with blunder, confusion, and miscalculation as the likely explanations. Planned-out wrongdoing is harder to pull off, more likely to backfire, and thus less probable.
But it is getting more difficult to dismiss the apparent Russian role in the DNC hack as blunder and confusion rather than plan.
“Real-world” authorities, from the former U.S. Ambassador to Russia to FBI sources to international security experts, say that the forensic evidence indicates the Russians. No independent authority strongly suggests otherwise. (Update the veteran reporters Shane Harris and Nancy Youssef cite evidence that the original hacker was “an agent of the Russian government.”)
The timing and precision of the leaks, on the day before the Democratic convention and on a topic intended to maximize divisions at that convention, is unlikely to be pure coincidence. If it were coincidence, why exactly now, with evidence drawn from hacks over previous months? Why mail only from the DNC, among all the organizations that have doubtless been hacked?
The foreign country most enthusiastic about Trump’s rise appears to be Russia, which would also be the foreign country most benefited by his policy changes, from his sowing doubts about NATO and the EU to his weakening of the RNC platform language about Ukraine.
In his convention speech, he suggested that Muslims need to earn the rights that all other Americans enjoy.
I love Bill Clinton. But I didn’t love his speech Tuesday night in Philadelphia. Given the job of humanizing his wife, he came across as genuinely smitten. But he failed to do what he’s done in every convention speech he’s delivered since 1992: tell a story about where America is today and what can be done to move it forward. He called his wife a great “change maker” but didn’t define the change America needs right now.
But the worst moment of the speech came near its end, when Clinton began to riff about the different kinds of people who should join Hillary’s effort. “If you love this country, you’re working hard, you’re paying taxes, you’re obeying the law and you’d like to become a citizen, you should choose immigration reform over someone that wants to send you back,” he said. Fair enough. Under any conceivable immigration overhaul, only those undocumented immigrants who have obeyed the law once in the United States—which includes paying taxes—will qualify for citizenship. Two sentences later, Clinton said that, “If you’re a young African American disillusioned and afraid … help us build a future where no one’s afraid to walk outside, including the people that wear blue to protect our future.” No problem there. Of course African Americans should be safe from abusive police, and of course, police should be safe from the murderers who threaten them.
Since tough questioning has failed to hold the candidate accountable, broadcast outlets need to apply pressure where it counts—to Trump’s ego.
The media is nothing if it can’t hold a presidential candidates accountable—if newsrooms and editorialists can’t force a White House aspirant to keep a promise, uphold precedent, and address suspicions that he’s a tool of Moscow.
Journalism is a joke if we let Donald Trump slide.
And so I have an idea for CNN, MSNBC, FOX News and the three broadcast networks:
Stop interviewing Trump, and stop paying his surrogates, until he releases his tax records.
I don’t make this proposal lightly. I understand as well as anybody that interviewing presidential candidates is an important way to inform the public, especially when the questioning is objective, tough, and revealing of the candidate’s character and policies.
The most ardent Bernie Sanders supporters must confront the fact that there is more in their way than corruption and stupidity.
PHILADELPHIA––Tara Kurek describes herself as an orphan. By the time she was a teenager, her parents had descended from prescription drug abuse to heroin addiction. “They didn’t raise me,” she said. “I’ve been emancipated since I was 16 years old.”
His convention speech re-introducing his wife to the country was an uneven, but ultimately effective, performance.
Just before Bill Clinton strode onstage to be his wife’s character witness, his wife’s convention planners played a video tribute to him. “When he said stuff, you believed it,” a man dressed in union gear said of Bill Clinton, “because you lived it.”
This was no accident: An overwhelming number of voters don’t trust Hillary Clinton. That credibility and character gap is the one thing that might stop Americans from electing a second President Clinton. And so the master of persuasion bragged on and on about his wife: career highlights, familiar anecdotes, and enough warm and cheesy sentiments to launch a thousand wedding toasts.
“If you were sitting where I am sitting and you heard what I heard at every dinner conversation and … on every long walk, you would say this woman has never been satisfied with the status quo about anything,” Bill Clinton said. Having been the candidate of change in 1992, Bill Clinton knows his wife faces headwinds against Donald Trump’s promise of radical, unruly change. “She always wants to move the ball forward,” Bill Clinton said. “That just who she is.”
Physicists can’t agree on whether the flow of future to past is real or a mental construct.
Einstein once described his friend Michele Besso as “the best sounding board in Europe” for scientific ideas. They attended university together in Zurich; later they were colleagues at the patent office in Bern. When Besso died in the spring of 1955, Einstein—knowing that his own time was also running out—wrote a now-famous letter to Besso’s family. “Now he has departed this strange world a little ahead of me,” Einstein wrote of his friend’s passing. “That signifies nothing. For us believing physicists, the distinction between past, present, and future is only a stubbornly persistent illusion.”
Einstein’s statement was not merely an attempt at consolation. Many physicists argue that Einstein’s position is implied by the two pillars of modern physics: Einstein’s masterpiece, the general theory of relativity, and the Standard Model of particle physics. The laws that underlie these theories are time-symmetric—that is, the physics they describe is the same, regardless of whether the variable called “time” increases or decreases. Moreover, they say nothing at all about the point we call “now”—a special moment (or so it appears) for us, but seemingly undefined when we talk about the universe at large. The resulting timeless cosmos is sometimes called a “block universe”—a static block of space-time in which any flow of time, or passage through it, must presumably be a mental construct or other illusion.
The pressures of national academic standards have pushed character education out of the classroom.
A few months ago, I presented the following scenario to my junior English students: Your boyfriend or girlfriend has committed a felony, during which other people were badly harmed. Should you or should you not turn him or her into the police?
The class immediately erupted with commentary. It was obvious, they said, that loyalty was paramount—not a single student said they’d “snitch.” They were unequivocally unconcerned about who was harmed in this hypothetical scenario. This troubled me.
This discussion was part of an introduction to an essay assignment about whether Americans should pay more for ethically produced food. We continued discussing other dilemmas, and the kids were more engaged that they’d been in weeks, grappling with big questions about values, character, and right versus wrong as I attempted to expand their thinking about who and what is affected—and why it matters—by their caloric choices.
The Democratic Party’s emphasis on race and gender is compelling to many voters—but it may not accord with the experience of many who are struggling.
After an analysis of polls gauging support for Donald Trump and Hillary Clinton, the New York Times concluded earlier this week that the Democratic nominee struggles most with one demographic group: working-class white men without college degrees. “Mr. Trump has adopted a message all but perfectly devised to attract these voters,” the article states. “He has a populist message on trade and immigration. He has abandoned key elements of the Republican agenda that hurt the party among white working-class Democrats, like support for cutting the social safety net.”
Gender may be a factor, the article adds, before addressing a final possible explanation:
It is also possible that less-educated white men are reacting to rapid changes in cultural and economic status, completely independent of Mrs. Clinton’s gender. No liberal arts college class on “power, privilege and hierarchy” will tell you that white working-class men have become a disadvantaged group. But many white working-class men do not feel privileged — not in a society where power and status are often vested in well-educated elites along the coasts. From their standpoint, the Democratic Party might look like an identity politics patronage system — affirmative action, immigration, “political correctness,” gender or whatever else.
Washington, D.C., has embarked on an aggressive clean-energy plan, but a big challenge will be making sure it doesn't worsen existing inequalities.
WASHINGTON, D.C.—For homeowners and renters, drawing energy from solar panels on their roofs can be very cost-effective: Some estimates put monthly electric-bill savings between 10 and 30 percent, and on top of that, households that install solar systems can get 30 percent of the cost as a tax credit. But for many, installing solar panels is simply not within reach: Setting up such systems can cost tens of thousands of dollars, which means that their use—and subsequent savings—are predominantly enjoyed by wealthy households.
That's why, as Washington, D.C., moves forward with its clean-energy plan—which would have at least half the city's power coming from renewable sources by 2032—it is doing so with an eye on inequality. The city has mandated that a portion of the money set aside for solar initiatives—just under one-third—target low-income neighborhoods.
Many elite universities relegate the degree program to second-class status.
Only fools pay for their champagne at Oxford. As a women’s-studies graduate student at the British university, I could always count on my professors stocking a bottle or two of bubbly in their offices, happily pouring me a glass whenever I walked in. Students of other graduate programs at Oxford had reserved seats in the library, educational field trips, or allotted funding for research materials, but the 15 women of Oxford’s women’s-studies program during the 2013–14 academic year made do with drinking in medieval-era buildings we would’ve been banned from a century ago.
“I'd felt like I'd been let into this cultural club because so much of English culture, things like Brideshead Revisited and that sort of thing, is based around Oxford,” 27-year-old Isobel Laing, a classmate from Cheltenham, told me. Lisa Bernhardt, a 24-year-old Ph.D. candidate at Cambridge, shared similar sentiments about her university: “I was just really enchanted from the outside looking in—it was so grand.”