The Associated Press put out a good story over the weekend noting that many of the “jobs plans” being pushed by the Republican presidential candidates don’t seem especially likely to, well, create jobs. The AP doesn’t break a whole lot of new ground here, but it does a good job rounding up arguments and analysis from a variety of sources—from heterodox conservative economist Bruce Bartlett to survey data from business groups—to make the case that, whatever the merits of GOP solutions like lower marginal tax rates and relaxed regulation, they seem largely unresponsive to the current employment crisis.
My favorite part of the story, though, comes at the end, when the AP catalogues what the candidates have said on how they’d respond to the housing and foreclosure crisis. From the article:
After the Oct. 18 GOP debate in Las Vegas, a center of foreclosure activity, editors of the AOL Real Estate site wrote, “We didn’t hear any meaningful solutions to the housing crisis. That’s no surprise, considering that housing has so far been a ghost issue in the campaign.”
To the degree the candidates addressed housing, they mainly took a hands-off approach. “We need to get government out of the way,” Cain said. “It starts with making sure that we can boost this economy and then reform Dodd-Frank,” which is a law that regulates Wall Street transactions.
Bachmann, in an answer that mentioned “moms” six times, said foreclosures fall most heavily on women who are “losing their nest for their children and for their family.” She said Obama “has failed you on this issue of housing and foreclosures. I will not fail you on this issue.” Bachmann offered no specific remedies.
Romney told editors of the Las Vegas Review-Journal: “Don’t try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up.”
Perry spokesman Mark Miner said the Texas governor’s “immediate remedy for housing is to get America working again. … Creating jobs will address the housing concerns that are impacting communities throughout America.”
To summarize, in order: pablum; more pablum; a coherent commitment to laissez-faire; boilerplate. “Ghost issue” is putting it kindly. The AP might have added that Mitt Romney’s 59-point, 160-page economic plan (PDF) uses the words “housing” twice, “foreclosure” once, and “mortgage” once—all in a discussion of the roots of the economic crisis, not in the section where he lays out his solutions. (Meanwhile, the conservative press seems no more interested in this issue than the White House press corps: The Wall Street Journal’s opinion page, which faulted Romney’s plan for “shrink[ing] from some of the biggest issues,” used not one of those words a single time.)
It’s unsurprising that the GOP field is reluctant to spell out policies designed to stem foreclosures, alleviate mortgage debt, or stabilize home prices: to do so would be politically dangerous. As Douglas Holtz-Eakin told The Washington Post’s Ezra Klein in a much-discussed article published a few weeks ago, “the politics on housing are hideous”—because who wants to help pick up the tab when his neighbor can’t make the payment on a loan the bank never should have approved? Holtz-Eakin speaks from experience: he was the architect of then-presidential nominee John McCain’s plan to deal with housing debt, which was reviled by conservatives whose support McCain needed. (Left-leaning observers didn’t love it, either.)
But there’s every reason for political reporters to follow the lead of the AP and the outlets it cites here, and do what they can to force housing onto the candidates’ agenda. (That goes for coverage of the incumbent in the White House, too.) Partly that’s because of the human suffering and the damage to local and regional economies that results directly from the foreclosure epidemic. More broadly, it’s because the housing crisis is inextricably linked to our ongoing economic struggles. When the bubble popped, a whole lot of people discovered they weren’t as rich as they’d thought, and found their mortgage debt—incurred during the boom years—looming larger than they’d anticipated. Even people who weren’t at immediate risk of foreclosure have sharply cut back on consumer spending to focus on “deleveraging”; that sucks money out of the economy, contributing to widespread job losses from which we’ve yet to recover. Meanwhile, with prices still falling and access to credit for prospective buyers extraordinarily tight, we’re witnessing a historic collapse in new homebuilding, which devastates the construction sector.
It’s true that there are different ways to try to address this debt overhang and restore demand, some of which don’t depend on housing-specific policies. For example, liberal blogger Matt Yglesias recently wrote that he’s not enthusiastic about “targeted debt relief” because it raises “fairness, moral hazard, and time-consistency problems”—that is, all the things that make the politics of housing hideous—“that can be avoided with broader based stimulative ideas.” Instead, Yglesias is a persistent proponent of suddenly fashionable NGDP targeting, an approach to monetary policy that aims for real growth but will tolerate higher inflation, which serves as untargeted debt relief.
While that sort of approach isn’t targeted to distressed homeowners or mortgage debt, it’s responsive to the ways in which the housing crisis is weighing down the U.S. economy. That’s not something that can be said, at this point, of the plans (or non-plans) offered by the GOP contenders. Good catch by the AP, and let’s see more of this over the course of the campaign.
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