Visual source: Newseum
The New York Times examines President Obama's new housing proposal and gives it a thumbs up:
At long last, Fannie Mae and Freddie Mac, the government-run mortgage companies, have issued new rules to allow millions of underwater borrowers, who are current on their payments, to refinance their high-rate mortgages into lower-rate loans. President Obama, who pushed for the changes, rightly emphasized the benefits in a speech on Monday in Las Vegas, a city ravaged by foreclosures. Refinancings will lower monthly payments, reduce the likelihood of default and boost consumer spending. [...]
Fewer foreclosures would help to halt the decline in home values, replenishing battered property tax coffers. Restoring home equity is also crucial to getting consumers to spend again. But banks have balked at reducing principal because they don’t want to face up to the losses.
For too long, President Obama has relied on the banks to do what’s right. That hasn’t worked. Strong political pressure and likely legislation may be the only way to get the banks to accept write downs of principal.
Paul Krugman directs us to Joseph E. Gagnon's analysis of the plan:
The annual savings to borrowers would be about 0.5 percent of GDP. Because of the long-lasting nature of these savings, the total effect on household spending would be greater than that of an equivalent but temporary tax cut.4 In addition, the availability of record-low mortgage rates for a fixed period of time likely would spur potential new home buyers into the market and boost home building and sales.
Even more important, if the Federal Reserve supported the refinancing boom by purchasing $2 trillion of new MBS, for example, the existing MBS holders would have to find another market in which to invest $2 trillion. This avalanche of money would surely push up stock prices, push down bond yields, support real estate prices, and push up the value of foreign currencies. All of these financial developments would stimulate US economic activity. Based on a recent Fed study (Chung et al 2011) Fed purchases of this magnitude would increase US GDP by more than 2 percent after about two years, creating nearly 3 million additional jobs. This estimate includes only a small part of the effects operating through the mortgage refinance channel discussed above, so that the total effects on the economy would be even larger, perhaps creating 4 million extra jobs or more.
Shifting now from helping homeowners to focusing on those without homes...Barbara Ehrenreich looks at homelessness through the Occupy Wall Street lens:
What the Occupy Wall Streeters are beginning to discover, and homeless people have known all along, is that most ordinary, biologically necessary activities are illegal when performed in American streets—not just peeing but sitting, lying down and sleeping. While the laws vary from city to city, one of the harshest is in Sarasota, Florida, which passed an ordinance in 2005 that makes it illegal to “engage in digging or earth-breaking activities”—that is, to build a latrine—cook, make a fire, or be asleep and “when awakened state that he or she has no other place to live.”
It is illegal, in other words, to be homeless or live outdoors for any other reason. It should be noted, though, that there are no laws requiring cities to provide food, shelter or restrooms for their indigent citizens.
The current prohibition on homelessness began to take shape in the 1980s, along with the ferocious growth of the financial industry (Wall Street and all its tributaries throughout the nation). That was also the era in which we stopped being a nation that manufactured much beyond weightless, invisible “financial products,” leaving the old industrial working class to carve out a livelihood at places like Walmart.
New York Magazine outlines the Karl Rove "blueprint" for stopping the president's jobs bill:
Karl Rove’s organization American Crossroads, which functions as a kind of privately run Republican Party organization, has a memo laying out how the party ought to oppose President Obama’s jobs bill. It’s a telling window into the contours of the jobs debate. The specifics of Obama’s proposal are all highly popular, and the Republican challenge is to oppose it anyway. The memo offers a fascinating look at the mechanisms of political spin in general, and the particular dilemma of the Republican Party as it blocks economic action in the face of crisis.
The key fact to understand about the bill, delicately left unmentioned by the American Crossroads memo, is that Americans want to do all the things Obama proposes. By a twenty-point margin, they favor funding new road construction and a payroll tax cut. By a 30-point margin, they agree with higher taxes on the rich to cut the long-term deficit. They support helping stave off layoffs of police officers, firefighters, and teachers by a 50-point margin. How do you fight that?
You redefine the issue as a generalization. People don’t like firing police officers and teachers? Fine, just call them “union workers”[.]
Richard Cohen defends Occupy Wall Street against right-wing smears of anti-Semitism:
Reckless Jew that I am, I muscled my way into the Occupy Wall Street encampment in Lower Manhattan despite multiple reports of virulent and conceivably lethal anti-Semitism. Projecting an unvarnished Semitism, I circled the place, encountering nothing and no one to suggest bigotry — not a sign, not a book and not even the guy who some weeks ago held up a placard with the instruction to Google the phrase “Zionists control Wall St.” Google “nut case” instead.
This was my second visit to the Occupy Wall Street site and the second time my keen reporter’s eye has failed to detect even a hint of the anti-Semitism that had been trumpeted by certain right-wing Web sites and bloggers, most prominently Bill Kristol. He is a founder of the Emergency Committee for Israel, which has been running cable TV ads alleging a virtual hate rally at the Occupy Wall Street site and calling on President Obama and other important Democrats to denounce what is — as it happens — not happening there. The commercial ran on Fox News the very day I was at the site.
Steve Kornacki argues that even with the seemingly inevitable nomination of Mitt Romney, the Tea Party isn't fading from influence:
[T]here’s another reason Romney may end up coasting, and why next year’s GOP congressional primary season might not be nearly as wild as that of 2010: The Tea Party has already won.
Its victory has mainly been a psychological one. The defeats of Sen. Robert Bennett and Reps. Mike Castle and Bob Inglis along with the GOP primary triumphs of Sharron Angle, Joe Miller, Dan Maes and Rick Scott sent a clear signal to Republican elected officials and party leaders that their base was absolutely serious about ideological purity — and absolutely opposed to any kind of compromise with President Obama and other Democrats. If they didn’t show that they understood this message, and if they didn’t back it up with action, they could be next on the hit list. Basically, the Tea Party got in their heads.
And fear of arousing a Rush Limbaugh/Red State-fueled backlash among the party base — which is essentialy synonymous with the Tea Party — has clearly shaped the actions of the Republican establishment since last year’s uprising. John Boehner set the tone for the 112th Congress when he refused over and over in a “60 Minutes” interview last December to use the word “compromise.” Since then, Boehner has presided over one manufactured crisis after another, forced to continuously prove to Tea Party purists that he’s not about to sell them out in any kind of compromise with Obama. Even when the president offered the prospect of a “grand bargain” with significant cuts to Medicare and Social Security and only modest revenue hikes, Boehner felt compelled to walk away.
Jonathan Alter takes a close look at the scandal cycle:
Barack Obama was not in office for more than a couple of minutes, it seemed, before conservatives began trying to cover him in muck. Yet for almost three years, the administration has been scandal-less, not scandalous. In a capital culture that over generations has become practiced at the art of flinging mud pies, Republicans and a few reporters have been tossing charges against a Teflon wall.