Arnold: “This crisis is not going to last”

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A couple of newsy items warrant mentioning today:

Gov. Schwarzenegger (pictured at left), is striking a hopeful tone about housing: ‘This crisis is not going to last,’ the governor said in Stockton yesterday. ‘It’s a bump in the road.’ He predicted that California’s declining home values would turn upward again soon.

I’m pretty certain he is wrong, but being hopeful is often a good leadership strategy nonetheless. It’s not entirely fair, but Schwarzenegger is in a position to suffer more from the housing downturn than any other elected official in the state. A state budget crisis -- entirely possible over the next couple of years -- is a governor’s burden.

In other words, the easiest way to be a popular governor is to have good timing -- time your career so that you govern during an economic expansion. Schwarzenegger had great timing until the past few months.

Moving, on, the Federal Reserve, as most of you already know, is proposing a series of new regulations aimed at bringing more sanity to the mortgage business: ‘The Fed proposal would require lenders who make sub-prime loans to consider borrowers’ abilities to make payments and to verify that they have the income and assets they claim. It also would require better disclosure of special bonuses that mortgage brokers earn when they write loans at higher rates than a borrower is eligible to receive.’

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