Brad Delong has a great post:
More Jobs and Higher Middle Class Incomes as Economic Policy Job #1: Housing Policy Edition
Years late and terabucks short blogging…
Four years ago, Obama pivoted to the Axelrod-Geithner line that the decline had stopped, economic recovery was on the way and could handle itself, and that economic policy job #1 was stabilizing the long-term finances of the federal government.
Now, after four largely wasted years spent mostly talking about the deficit, he may be pivoting back:
“I want to make sure that all of us in Washington are investing as much time, as much energy, as much debate on how we grow the economy and grow the middle class as we’ve spent over the last two to three years arguing about how we reduce the deficits”, Mr. Obama said. He called for a shift “away from what I think has been a damaging framework in Washington.”
This is most welcome. Let us hope that it is indeed permanent.
Now the first step is to strike a deal to get the Republicans in the Senate to confirm Mel Watt as head of FHFA, and then for FHFA and the GSEs to offer a conforming loan-rate refi (with equity kickers attached for those underwater) to every mortgage holder in America. That policy to clean out the credit-channel mess created by the housing finance disaster and housing bubble crash of 2004-2008 would have been good policy in 2009. It would have been good policy in 2010. It would have been good policy in 2011. It would have been good policy in 2012. And it would be good policy today.