Tuesday, March 25, 2008

Sen. Clinton's Economic Cure-Alls

Sen. Clinton gave a big speech on economic matters yesterday, and if she was hoping to get major media attention out of it, she failed (substantive issues = way boring). That's probably for the best, though, as it seems none too brilliant.

Here's the Associated Press report on her proposals-
Democrat Hillary Rodham Clinton proposed several remedies to the nation's home mortgage problems Monday, including one tool more often associated with Republicans than Democrats.

The New York senator proposed greater protections for lenders from possible lawsuits by investors, a variation of so-called tort reform. For years, GOP leaders have called for restrictions on what they consider unwarranted lawsuits against businesses.
Democrats have often resisted them on grounds they limit injured parties' legitimate rights to redress.

"Many mortgage companies are reluctant to help families restructure their mortgages because they're afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers," Clinton said in what she billed as a major address on the economy at the University of Pennsylvania.

Yes, that's Senator Hillary Clinton basically reworking President Bush's talking points about why the telecoms deserve wiretapping immunity to make the case for why mortgage brokers deserve similar shielding.

Funny... she later says, "So I think that people who would be voting for either me or Senator Obama are going to ask themselves, 'Wait a minute, there are really big differences between the Democrats and the Republicans, and let's have a unified party and elect a Democratic president.'" Yes, Senator, let's. Have anyone in mind?

She goes on to expand on further proposals-
Clinton said she supports pending legislation to establish an auction system for hundreds of thousands mortgages in default. Under the plan, drafted by Democratic lawmakers, lenders "could sell mortgages in bulk to banks and other buyers," Clinton said, who in turn would "restructure them to make them affordable for families, because they know the government will guarantee them once they're reworked."

The Federal Housing Administration, she said, "should also stand ready to be a temporary buyer to purchase, restructure, and resell underwater mortgages" if the auction plan falls short.

I can barely understand most of this stuff, but it sounds to me like a huge mess that will be completely unworkable in reality. I'm not sure, unfortunately, that much of anything can be done about those already screwed over by the housing mess (how do you separate those screwed by predatory lenders from those who just defaulted?).

The focus should instead be put on putting in place the new laws and regulatory measures needed to make sure that this doesn't happen again. In short... stop trying to put a band-aid on this shotgun wound, and start actually fixing the system. You know, like we were going to do after Katrina, but didn't.

And here, to me, is the most ridiculous part of the proposal-
Clinton also called on President Bush to appoint "an emergency working group on foreclosures" to recommend new ways to confront housing finance troubles. She said the panel should be led by financial experts such as Robert Rubin, who was treasury secretary in her husband's administration, and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.

Yes, that's what will solve all our economic problems... a stimulus check task force to sit around and ruminate on their own importance (lead, of course, by the brilliant Alan Greenspan). And then they can file a fancy report-- like the Iraq Study Group!-- and we can all pretend that it matters.

Matthew Yglesias notes that Sen. Obama also proposed a similar summit/task force a year ago, though his would not be packed with the people responsible for the policy and mentality that caused the mess that the new group would be entrusted with cleaning up.

One wonders what amazing plan John McCain will come up with. He may not know anything about the economy, but he bought Greenspan's book and no doubt has absorbed all his wisdom and genius by now. Have no fear, fellow Americans, the economy will be fixed in no time...

[UPDATE: Seems McCain spoke on this today. Basically plans to talk it out or do nothing.]

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