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.
The scientists are all talking like it’s a sure thing.
On August 21, the “moon” will pass between the Earth and the sun, obscuring the light of the latter. The government agency NASA says this will result in “one of nature’s most awe-inspiring sights.” The astronomers there claim to have calculated down to the minute exactly when and where this will happen, and for how long. They have reportedly known about this eclipse for years, just by virtue of some sort of complex math.
This seems extremely unlikely. I can’t even find these eclipse calculations on their website to check them for myself.
Meanwhile the scientists tell us we can’t look at it without special glasses because “looking directly at the sun is unsafe.”
“Seeing a partial eclipse bears the same relation to seeing a total eclipse as kissing a man does to marrying him.”
Ever since it was first published in 1982, readers—including this one—have thrilled to “Total Eclipse,” Annie Dillard’s masterpiece of literary nonfiction, which describes her personal experience of a solar eclipse in Washington State. It first appeared in Dillard’s landmark collection, Teaching a Stone to Talk, and was recently republished in The Abundance, a new anthology of her work. The Atlantic is pleased to offer the essay in full, here, until the day after the ‘Great American Eclipse’ on August 21.
It had been like dying, that sliding down the mountain pass. It had been like the death of someone, irrational, that sliding down the mountain pass and into the region of dread. It was like slipping into fever, or falling down that hole in sleep from which you wake yourself whimpering. We had crossed the mountains that day, and now we were in a strange place—a hotel in central Washington, in a town near Yakima. The eclipse we had traveled here to see would occur early in the next morning.
Dan McLaughlin got famous for valuing hard practice over talent. Then he didn’t reach his goal.
Dan McLaughlin reckons he’s sat down to compose the farewell post to the Dan Plan a hundred times. “I just don’t know what to write,” he says.
Sitting in his spartan home in Portland, Oregon, McLaughlin is self-effacing and soft-spoken. He recently launched an artisanal soft-drink venture. Discussing the Dan Plan is like reaching back into another life: Seven-plus years ago, aged 30 and unsure even of which hand to grip a golf club in, McLaughlin quit his job as a commercial photographer, took in lodgers to cover the mortgage, husbanded his savings for green fees, and set out to make the PGA Tour, home to the world’s elite golfers.
He created a catchily named blog to document his quest, and in short order the Dan Plan commanded magazines spreads and TV spots. Along the way, it drew an avid community of followers riveted by the spectacle of a regular Joe living out an everyman fantasy. No less captivated: a salon of leading figures from the science of learning and human performance.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
The country’s exceptionally thin safety net prompts residents—especially those with less-steady employment—to view partnership in more economic terms.
Over the last several decades, the proportion of Americans who get married has greatly diminished—a development known as well to those who lament marriage’s decline as those who take issue with it as an institution. But a development that’s much newer is that the demographic now leading the shift away from tradition is Americans without college degrees—who just a few decades ago were much more likely to be married by the age of 30 than college graduates were.
Today, though, just over half of women in their early 40s with a high-school degree or less education are married, compared to three-quarters of women with a bachelor’s degree; in the 1970s, there was barely a difference. The marriage gap for men has changed less over the years, but there the trend lines have flipped too: Twenty-five percent of men with high-school degrees or less education have never married, compared to 23 percent of men with bachelor’s degrees and 14 percent of those with advanced degrees. Meanwhile, divorce rates have continued to rise among the less educated, while staying more or less steady for college graduates in recent decades.
The nation’s current post-truth moment is the ultimate expression of mind-sets that have made America exceptional throughout its history.
When did America become untethered from reality?
I first noticed our national lurch toward fantasy in 2004, after President George W. Bush’s political mastermind, Karl Rove, came up with the remarkable phrase reality-based community. People in “the reality-based community,” he told a reporter, “believe that solutions emerge from your judicious study of discernible reality … That’s not the way the world really works anymore.” A year later, The Colbert Report went on the air. In the first few minutes of the first episode, Stephen Colbert, playing his right-wing-populist commentator character, performed a feature called “The Word.” His first selection: truthiness. “Now, I’m sure some of the ‘word police,’ the ‘wordinistas’ over at Webster’s, are gonna say, ‘Hey, that’s not a word!’ Well, anybody who knows me knows that I’m no fan of dictionaries or reference books.
Jen Hatmaker says the “days of silence are over” in polite evangelical culture.
By her own estimation, Jen Hatmaker is “low-grade Christian famous.” She has written 12 books, starred in an HGTV series with her family, built a large social-media following, and gone on tour with other prominent female Christian writers.
In some circles, Hatmaker is also controversial. Last fall, she told the writer Jonathan Merritt she thinks LGBT relationships can be holy. LifeWay, a large Christian retailer, pulled her books from their stores. Some of her followers were “angry or shocked or confused,” she said, and her interview set off a round of debate on the authority of evangelical women in ministry. This spring, Hatmaker wrote on her blog that she has “[become] painfully aware of the machine, the Christian Machine.”
Participants in a “free speech” rally in Boston say they aren’t white nationalists, but claim there is a “war against whites” in America.
WOBURN, Mass. — Kyle Chapman was sitting in a dimly lit Irish pub about 20 minutes outside of Boston, where Saturday afternoon’s so-called “Free Speech Rally” had just been shut down by tens of thousands of counter-protesters.
“The white man is one of the most discriminated against people in this entire country right now,” he explained.
Chapman—a muscly right-wing organizer who went viral earlier this year after video footage showed him swinging a heavy wooden stick at liberal Berkley demonstrators—had been scheduled to speak at the rally on Boston Common. But organizers ended up pulling the plug early, he said, when the crowd of counter-protesters grew too large. After being escorted to safety by police, he and other attendees retired here to lick their (metaphorical) wounds.
Empty pedestals can offer the same lessons about racism and war that the statues do.
Six years before it would become the inspiration for bloody protests, the Robert E. Lee monument in Charlottesville, Virginia, was vandalized. The 2011 incident capped off my 11-year residency in the small city—where I’d taught high-school history and where my understanding of the legacy of the Civil War was nurtured. There was no better place to teach the Civil War than Charlottesville. Some of the most important battlefields in Richmond, Fredericksburg, and the Shenandoah Valley are within an hour’s drive. But it was the region’s monuments that played a central role in my teaching, and I believed they should be left alone.
I argued my position in an essay for The Atlantic: “For better or for worse, monuments to Confederate heroes are part of our story, but each of us can choose how to engage with these places. We can express outrage over their existence. We can alter them with statements of our own. Or we can let them be, appreciate their aesthetic qualities, and reflect carefully on their history.” I fell short on understanding what they still meant to some in the community. I didn’t realize that so many of my neighbors didn’t need further reflection at all.
The legend of the Confederate leader’s heroism and decency is based in the fiction of a person who never existed.
The strangest part about the continued personality cult of Robert E. Lee is how few of the qualities his admirers profess to see in him he actually possessed.
Memorial Day has the tendency to conjure up old arguments about the Civil War. That’s understandable; it was created to mourn the dead of a war in which the Union was nearly destroyed, when half the country rose up in rebellion in defense of slavery. This year, the removal of Lee’s statue in New Orleans has inspired a new round of commentary about Lee, not to mention protests on his behalf by white supremacists.
The myth of Lee goes something like this: He was a brilliant strategist and devoted Christian man who abhorred slavery and labored tirelessly after the war to bring the country back together.