Audit D.C. Notes: Going Against the Meme, Mortgage Madness, Summer Reading

Christopher Beam does a nice job at Slate, throwing cold water on the anti-incumbency meme that’s been dominating election coverage.

Sure, a few incumbents have lost in recent months. But, Beam writes, let’s put this in perspective:

So far this year, 282 federal-level incumbents have been up for re-election. Of those, only six have lost their seats—four in the House and two in the Senate. (Aside from Bennett, Kilpatrick, and Specter, there’s Rep. Alan Mollohan, D-W.Va.; Rep. Parker Griffith, R-Ala.; and Rep. Bob Inglis, R-S.C.) That’s 2 percent of all incumbents. If you count only the 119 incumbents who have faced primary challengers, the proportion who were defeated goes up to 5 percent.

That’s a helpful infusion of data. As John Sides wrote on The Monkey Cage, “Kudos to Beam for actually counting both the numerator and the denominator and then dividing. That bit of simple arithmetic seems beyond a great many commentators.”

But there’s also this killer fact, one that explains so much about how Washington works:

The fact is, even an “anti-incumbent” year isn’t that bad for incumbents. The average rate of re-election for members of the House since 1964 has been 93.3 percent. (Over the last decade, it’s been 96 percent.)

Good work. And something to keep in mind the next time voters go to the polls.

—The Washington Independent takes a smart look at something I didn’t think we’d be seeing so soon: the return of the $1,000-down mortgage.

It sounds too good to be true. But it is true. This offer does not come from a subprime lender, looking to reel in thousands of unqualified and ill-advised homebuyers, only to slap them with add-ons, fees and variable rates. It is not a teaser or a trick. The advertisement references a program initiated by the National Council of State Housing Agencies and Fannie Mae, the taxpayer-backed, government-sponsored enterprise that buys up mortgages from lending banks.

The pilot program is called “Affordable Advantage,” and it has now been adopted by three states — Massachusetts, Wisconsin and Idaho. (Other states, such as Pennsylvania, California and Colorado, have similar state programs.) The initiative is small, reaching just a few hundred people so far. But it is looking to expand. Given the dangers of these types of mortgages and the specter of the housing bubble, where unconventional loans wreaked disaster, it is also raising questions from wary housing experts and legislators.

Those questions are too predictable by now, starting with what happens if the housing market turns down, even a little bit, and the homeowner promptly goes underwater.

This is a good piece by TWI (where I used to work), looking a program before it becomes a problem.

—I’m putting together a vacation reading pile, and thought I’d share the latest addition. It comes via Greg Mankiw’s blog, and it’s something we should probably all read soon: a CBO issue brief entitled “Federal Debt and the Risk of a Fiscal Crisis.”

It’s not too terribly long, but it is terribly important. (And that’s not just because I’m the Peterson Fellow.) And this report is easy to understand, especially for the non-experts among us:

One impact of rising debt is that increased government borrowing tends to crowd out private investment in productive capital, because the portion of people’s savings used to buy government securities is not available to fund such investment. The result is a smaller capital stock and lower output and incomes in the long run than would otherwise be the case.

The effect of debt on investment can be offset by borrowing from foreign individuals or institutions. But additional inflows of foreign capital also create the obligation for more profits and interest to flow overseas in the future. Thus, although flows of capital into a country can help maintain domestic investment, most of the gains from that additional investment do not accrue to the residents.

Maybe there will be a quiz when I get back.

Oh, and one more thing. Any thoughts about what else I should put in the to-read pile?

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Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at