BLOG VIEW: If Mitt Romney is going to be the Republican nominee for president, he will need to do a much better job of formulating a serious strategy that addresses the ongoing housing crisis. And there is very little time to lose – his opponents are already using housing as an issue to sink his presidential ambitions.
Throughout his campaign, Romney has been intentionally vague in explaining his vision for improving the state of the housing market. During the recent Republican presidential debate in Michigan, Romney received a point-blank question from CNBC's Maria Bartiromo on why there was almost no mention of housing in his 59-point jobs plan proposal. Romney's answer was delivered with an unctuous smile: ‘Because it's not a housing plan; it's a jobs plan.’
Romney, to date, has only discussed housing at any great depth in a videotaped Oct. 17 interview with the Las Vegas Review-Journal. During this interview, the former Massachusetts governor announced that he was opposed to federal loan modification programs designed to keep distressed homeowners in their residences.
‘Let it run its course, and hit the bottom,’ Romney said about the foreclosure situation. ‘Allow investors to buy homes, put renters in them, fix the homes up and let [the market] turn around and come back up.’
Romney's view is hardly unique, nor could it be considered radical. Many economists have complained that the continued overhang of the so-called shadow inventory and judicial backlog in foreclosure-related lawsuits have prevented the housing market from finding any degree of stability. But in election-year politics, anyone who is seen as favoring the abstract notion of market forces over the human drama of eviction can easily be painted as a villain.
And it has already happened. Yesterday, The New York Times ran an editorial entitled ‘Mr. Romney on Foreclosures’ that eviscerated the candidate's statements on the subject, incorrectly stating that he was advocating a ‘let-it-crash argument.’ However, the newspaper also arrogantly stated in its editorial that it was perfectly acceptable for banks to ‘take a hit on principal write-downs’ and investors in mortgage-backed securities to ‘take a hit on refinancings’ – perhaps we should be grateful they didn't go for an Elizabeth Warren-worthy triple play and bemoan that wealthy people aren't paying enough in taxes.
The Democratic National Committee (DNC) has also gotten into the act with a website called RomneyHousingPlan.com that uses Romney's ‘run its course’ quote from the interview against a video montage of unflattering photographs of the candidate. The DNC has a similar advertisement on YouTube aimed specifically at Arizona voters. That video concludes by saying, ‘Mitt Romney's message to Arizona: You're on your own.’
Unfortunately, the Romney campaign is pretending that the attacks do not exist. When specifically asked about the DNC efforts, Romney spokesperson Eric Fehrnstrom, told the Boston Herald, ‘We're keeping the focus on our strong pro-jobs message and the fact that President Obama has utterly failed to turn around the economy. We think it's time to let Mitt Romney use the skills he learned as a businessman to put the country back on the right track.’
Of course, you'll notice that Fehrnstrom never used the word ‘housing’ in his putdown. To date, Romney has avoided any in-depth interview relating to the subject, and his campaign is not highlighting the issue.
But Romney cannot run away from the subject, nor can he run away from his political record on the subject. There is a website called Myclob's Mitt Romney Encyclopedia that includes a section with links to a surprisingly large number of housing-related press releases published during Romney's single term as governor of Massachusetts.
What is striking about these press releases was that then-Gov. Romney's administration trumpeted affordable-housing development as a means of strengthening the Bay State's economy. Romney also made a fairly healthy use of state funds to support affordable-housing goals.
Romney foes will smile and Romney fans will cringe at the possibility of yet another flip-flop by the candidate – in this case, his advocacy of government funding for housing solutions when he was governor of an overwhelmingly politically liberal state and his 180-degree turn into eschewing government intervention in housing as a presidential candidate playing to an overwhelmingly conservative constituency.
Romney is not the only Republican presidential candidate with considerable housing-related baggage: Newt Gingrich laughed all the way to the bank with $1.8 million in ‘consulting’ fees from Freddie Mac, while Ron Paul is ready to take a blowtorch to the U.S. Department of Housing and Urban Development.
But with so many people insisting that Romney will be the Republican candidate, it is hard to imagine how he will be able to use the housing crisis to his advantage. Really, what can you say about a candidate who is now proclaiming that housing should ‘run its course, and hit the bottom’ but, back in 2004, insisted that it is ‘important that we continue to target our state resources into programs which bridge that financial gap and increase affordable homeownership opportunities for families’?
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
