Hillary on housing: Clinton’s foreclosure bailout plan
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Sen. Hillary Clinton (pictured) made a political speech today about the foreclosure crisis, and as a political effort, it may prove fairly successful for her. But, thankfully, this is not a politics blog, so my analysis can largely ignore politics and stick to housing and economics.
Of the three presidential candidates, Clinton’s fix is the most aggressive -- the biggest bailout, if you will. That makes it the most offensive to those who believe the solution to artificially inflated housing prices is, yes, a period of declining housing prices. Instead, she says the government should get ready to start buying mortgages: ‘... I believe the Federal Housing Administration should also stand ready to be a temporary buyer -- to purchase, restructure, and resell underwater mortgages.’
She also proposes a freeze on foreclosures and a $30-billion fund so that cities and states can start buying foreclosed and ‘distressed’ properties for possible resale or rent (Imagine the bungling, the fraud, and the favoritism, if the city of Los Angeles -- which can’t even keep track of foreclosed houses -- gets a pile of federal money to start buying them).
The headline-grabber was the suggestion that the president assemble a group of economic geniuses -- an ‘emergency working group on foreclosure.’ She suggested, evidently with a straight face, that the group would be led by ‘nonpartisan’ economic leaders like former Treasury Secretary Robert Rubin.
Now, Bob Rubin is a smart guy and all that, but he served in a Democratic administration, which his not a bad thing, but is not ‘nonpartisan.’ Further, he works for a company, Citigroup, that, as Fortune recently reported, ‘has written down more than $24 billion in losses due in large part of greed, cynicism, and bad judgment.’ Citi has been so wounded by the mortgage mess that Rubin had to jump on a plane and fly halfway around the world to ask the government of the United Arab Emirates for money. This is a nonpartisan figure capable of objectively analyzing the mortgage crisis? This is like putting Snoop Dogg on an anti-drug panel.
Clinton manages to acknowledge that reckless borrowers bear some responsibility for the housing mess, but can’t bring herself to call it what it is: the inevitable unwinding of a bubble of unsustainably high prices and disastrous lending against those prices.
She also can’t bring herself to blame her good friends on Wall Street -- see Rubin, Robert -- for their role in the mess. This is not an oversight. Instead she tries to score a few points by calling attention to the Bear Stearns bailout, without actually criticizing it. Populism Lite.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: AP