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.
Republicans are going to insist otherwise, but that’s simply not the case.
If there was one goal Senate Republicans had set out to achieve in developing their health bill to show they were less “mean” than their colleagues in the House, it was to take away the House Republicans’ green light for insurers to once again discriminate against those with pre-existing health conditions. Senate Republicans were willing to drive up deductibles and co-pays and be more draconian on Medicaid cuts, but on the one issue of pre-existing conditions they were intent on being less “mean,” as President Trump termed the House bill. Now that the text of the bill has been released, it’s clear that they have failed to achieve that.
As they argue for the bill, Republicans are going to claim that it will not allow insurance plans to discriminate against people because they have a pre-existing condition. But that just isn’t the case. The Republican plan may not allow insurers to discriminate against a pre-existing condition through the front door, but they’ve created a backdoor way in.
Mounting evidence that Trump’s election was aided by Russian interference presents a challenge to the American system of government—with lasting consequences for democracy.
Day by day, revelation after revelation, the legitimacy of the Trump presidency is seeping away. The question of what to do about this loss is becoming ever more urgent and frightening.
The already thick cloud of discredit over the Trump presidency thickened deeper Friday, June 23. The Washington Post reported that the CIA told President Obama last year that Vladimir Putin had personally and specifically instructed his intelligence agencies to intervene in the U.S. presidential election to hurt Hillary Clinton and help Donald Trump.
Whether the Trump campaign knowingly coordinated its activities with the Russians remains uncertain. The Trump campaign may have been a wholly passive and unwitting beneficiary. Yes, it’s curious that the Russians allegedly directed their resources to the Rust Belt states also targeted by the Trump campaign. But it’s conceivable they were all just reading the same polls on FiveThirtyEight and RealClearPolitics.
By searching the church's famed family trees, scientists have tracked down a cancer-causing mutation that came west with a pioneer couple—just in time to save the lives of their great-great-great-great grandchildren.
Nobody knew it then, but the genetic mutation came to Utah by wagon with the Hinman family. Lyman Hinman found the Mormon faith in 1840. Amid a surge of religious fervor, he persuaded his wife, Aurelia, and five children to abandon their 21-room Massachusetts house in search of Zion. They went first to Nauvoo, Illinois, where the faith’s prophet and founder, Joseph Smith, was holding forth—until Smith was murdered by a mob and his followers were run out of town. They kept going west and west until there were no towns to be run out of. Food was scarce. They boiled elk horns.The children’s mouths erupted in sores from scurvy. Aurelia lost all her teeth. But they survived. And so did the mutation.
The party has made gains in special elections, but continues to fall short of outright victory.
Kansas. Montana. Georgia. South Carolina. A string of special election defeats in each state, and with each one, a missed opportunity to take over a Republican House seat, has left Democrats facing the question: Why does the party keep losing elections, and when will that change?
The most obvious reason that Democrats fell short is that the special elections have taken place in conservative strongholds. In each case, Democratic candidates were vying to replace Republicans tapped by the president to serve in his administration, and in districts that Trump won. Despite the unfavorable terrain, Democrats improved on Hillary Clinton’s margin in every district except in Georgia. But if the party wants to take control of the House in 2018, it needs more than just a strong showing in Republican districts. It needs to win.
Richard Ben-Veniste on the uncanny parallels between the scandal he investigated and the controversy over the White House’s alleged links to Russia
Watching the national controversy over the White House and Russia unfold, I’m reminded of Karl Marx’s oft-quoted observation: “History repeats itself: first as tragedy, second as farce.” I was a close witness to the national tragedy that was Richard Nixon’s self-inflicted downfall as president, and I’ve recently contemplated whether a repeat of his “Saturday Night Massacre” may already be in the offing. Given how that incident doomed one president, Trump would do well to resist repeating his predecessor’s mistakes—and avoid his presidency’s descent into a quasi-Watergate parody.
The massacre began when Nixon gave the order to fire Watergate Special Prosecutor Archibald Cox, a desperate effort to prevent him from hearing tape-recorded evidence that proved the White House’s involvement in a conspiracy to obstruct the investigation of a break-in at Democratic National Committee headquarters. Nixon’s misuse of executive power backfired, immediately costing him two highly respected members of his administration: Attorney General Elliot Richardson and his deputy William Ruckelshaus, who both resigned rather than follow Nixon’s directive. Third in command at the Justice Department was Solicitor General Robert Bork, who agreed to do the dirty deed and fired Cox.
Why Millennials aren’t buying cars or houses, and what that means for the economy
In 2009, Ford brought its new supermini, the Fiesta, over from Europe in a brave attempt to attract the attention of young Americans. It passed out 100 of the cars to influential bloggers for a free six-month test-drive, with just one condition: document your experience online, whether you love the Fiesta or hate it.
Young bloggers loved the car. Young drivers? Not so much. After a brief burst of excitement, in which Ford sold more than 90,000 units over 18 months, Fiesta sales plummeted. As of April 2012, they were down 30 percent from 2011.
Don’t blame Ford. The company is trying to solve a puzzle that’s bewildering every automaker in America: How do you sell cars to Millennials (a k a Generation Y)? The fact is, today’s young people simply don’t drive like their predecessors did. In 2010, adults between the ages of 21 and 34 bought just 27 percent of all new vehicles sold in America, down from the peak of 38 percent in 1985. Miles driven are down, too. Even the proportion of teenagers with a license fell, by 28 percent, between 1998 and 2008.
A seller of dietary supplements is succeeding by promising power to the aggrieved.
There has always been money in testosterone, but especially now. The world is awash in ads for products that “enhance” and “support” testosterone levels. They promise health and virility. They are predicated on the contested assumption that there is a widespread dearth of testosterone—that more problems lie in scarcity than surplus.
Among these products is a potion known as Super Male Vitality. A single two-ounce vial costs $59.95. (The “retail” price on the seller’s website is given as $69.95, but that price has been conspicuously crossed out.)
For buyers who are not convinced by the discount and the phallic applicator and the promise of some kind of superior maleness, there is the question of what this product is. Its seller claims: “As men age, they may often experience a slow-down in vitality, energy, and overall wellness,” so Super Male Vitality is “specifically designed to assist the body in regulating proper balance to create superior vitality in males.”
The spread that’s poisonous to a growing number of people also is the basis of a medical therapy that saves the lives of millions of children.
Despite their diminutive scale, peanuts play an outsized role in American culture. Peanut butter has long been a mainstay of the American lunch box, with its sticky, slightly sweet nuttiness flavoring the memories of generation after generation of kids. And it’s hard to imagine ball games without, as the song goes, peanuts and Cracker Jacks (which, of course, also contain peanuts). But today, peanuts are the source of both hope and fear: While there’s been a surprisingly steep rise of peanut allergies in recent decades that can—though rarely—lead to death, peanut butter is also the basis of a medical therapy used to save the lives of millions of children around the world. This episode, we discover how the humble peanut got to be such a big deal.
The president’s attempt to intimidate James Comey didn’t merely backfire—it may also embolden hostile regimes to conclude his other threats are equally empty.
This is a first for the Trump presidency: the first formal presidential retraction of a presidential untruth.
President Trump tweeted a warning to James Comey: The fired FBI director had better hope that no “tapes” existed that could contradict his account of what happened between the two men. Trump has now confessed that he had no basis for this warning. There were no such tapes, and the president knew it all along.
The tweet was intended to intimidate. It failed, spectacularly: Instead of silencing Comey, it set in motion the special counsel investigation that now haunts Donald Trump’s waking imagination.
But the failed intimidation does have important real world consequences.
First, it confirms America’s adversaries in their intensifying suspicion that the president’s tough words are hollow talk. The rulers of North Korea will remember the menacing April 4 statement from the Department of State that the United States had spoken enough about missile tests, implying that decisive actions lay ahead—and the lack of actions and deluge of further statements that actually followed.
How leaders lose mental capacities—most notably for reading other people—that were essential to their rise
If power were a prescription drug, it would come with a long list of known side effects. It can intoxicate. It can corrupt. It can even make Henry Kissinger believe that he’s sexually magnetic. But can it cause brain damage?
When various lawmakers lit into John Stumpf at a congressional hearing last fall, each seemed to find a fresh way to flay the now-former CEO of Wells Fargo for failing to stop some 5,000 employees from setting up phony accounts for customers. But it was Stumpf’s performance that stood out. Here was a man who had risen to the top of the world’s most valuable bank, yet he seemed utterly unable to read a room. Although he apologized, he didn’t appear chastened or remorseful. Nor did he seem defiant or smug or even insincere. He looked disoriented, like a jet-lagged space traveler just arrived from Planet Stumpf, where deference to him is a natural law and 5,000 a commendably small number. Even the most direct barbs—“You have got to be kidding me” (Sean Duffy of Wisconsin); “I can’t believe some of what I’m hearing here” (Gregory Meeks of New York)—failed to shake him awake.