BLOG VIEW: When Barack Obama was running for president in 2008, he spoke eloquently of vigorous leadership that could shepherd the U.S. into a better future. ‘Change will not come if we wait for some other person or some other time,’ he said. ‘We are the ones we've been waiting for. We are the change that we seek.’
Well, things have changed since the 2008 election. Consider some recent statistics on the economic health of the nation:
- The U.S. Census bureau has reported a 1.5% drop from 2010-2011 in the median income of all U.S. households to $50,054. This is 4.1% below the level when Obama took office, and it is also the lowest level since 1995.
- The Census Bureau also reported the number of Americans in poverty was at 15% percent in 2011. Specifically, that means nearly one in six Americans, or about 46.2 million people, are living in poverty.
- Earlier this year, the Annie E. Casey Foundation reported that 8 million children in the U.S. were living in high-poverty areas in 2010 – a 25% increase from 2000.
- The Federal Deposit Insurance Corp. (FDIC) has determined that 10 million U.S. households – 8.2% of the household population – do not have bank accounts, as of 2011. When Obama took office in 2009, the number of households without bank accounts was 9 million.
- In March, the Consumer Financial Protection Bureau (CFPB) announced that student debt had passed the $1 trillion mark – a $300 billion leap from the third quarter of 2008, when Obama was elected president. It is estimated that two-thirds of today's college seniors graduate with an average student loan debt of $25,250.
In seeking re-election, Obama has called on voters to help his administration ‘finish the work we started.’ Considering what was accomplished in the past few years, and considering the mess he has made (and continues to make) with the housing finance environment, I can hardly imagine what Obama can offer for an encore.
Well, of course, the obvious answer to this catastrophe is to put my chips on Obama's Republican opponent, Mitt Romney. But that is not so easy. While I know what to expect from four more years of Obama, I have absolutely no clue what to anticipate in four years of a Romney administration.
Romney has been attacked by his foes and, increasingly, by some of his supporters for his acute lack of policy specifics. In terms of dealing with housing-related issues, Romney has taken evasiveness to new heights. His long-overdue housing policy proposals were unceremoniously dumped on his website earlier this month, but the specific-free nature of what he was offering – including a promise to ‘facilitate creative alternatives to foreclosure for those who cannot afford to pay their mortgage’ – was so cryptic that it could be easy to mistake his policy proposals for Zen riddles.
In late May, Romney economic adviser Glenn Hubbard told the Wall Street Journal that Romney was planning a series of campaign speeches that will propose a new system for dismantling failing financial institutions that differs from the current Dodd-Frank Act requirements. Hubbard also said that the candidate would put forward a plan to wind down Fannie Mae and Freddie Mac.
To date, there have been no speeches by Romney on these issues, although a vague promise to ‘reform’ Fannie Mae and Freddie Mac is now on the Romney campaign website. Hubbard also vowed that Romney would offer pursue one of two scenarios regarding the future of the Consumer Financial Protection Bureau: (1) the elimination of the agency and the reassigning its powers to existing financial regulators, or (2) realigning the agency within the federal government and making it more accountable to congressional oversight. But Romney has yet to preview what he would do with this controversial agency.
Thus, we have a real puzzle: do we take a chance on four more years of housing finance policies that are not offering positive results, or do we gamble on someone who refuses to offer a clue on what kind of leadership he would orchestrate? Should we support someone with failed policies, or someone who comes to the podium with no proposed policies?
Not surprisingly, much of the political debate that is percolating across the country focuses on why we should vote against a candidate, rather than why we should embrace a candidate. In this scenario, the vote is bestowed by default, with the winner being seen as the lesser of two evils.
That is all fine and dandy, except that it overlooks one tiny truth: the lesser of two evils is still evil.
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to hallp@mortgageorb.com.)
