The new housing measures that Obama announced at his news conference today amount to more desultory evidence that this president has been, again and again, far behind the curve on the Depression-sized crisis caused largely by massive mortgage securitization fraud and the collapse of credit. We don't want to keep harping on this -- I've been writing it for two and a half years now--but it's important to contrast once again Obama's piecemeal approach with the FDR-sized promise we thought we were getting at the beginning. Obama is like a New Orleans official who keeps adding another layer to the old dike each day in the middle of Katrina, hoping and praying as the floodwaters slosh ominously over the top, rather than building a new dike. All that early bluster from Tim Geithner about an "economic Powell doctrine" -- using overwhelming force to combat the crisis--was complete nonsense, it turns out.
Instead we get the piecemeal president. At the beginning it was a too-small stimulus, as Noam Scheiber has recorded. Then distraction as Obama went on to other things, like health care. His administration stood against a broad array of fixes, such as the Volcker Rule that would have restored some of the spirit of Glass-Steagall (Obama finally backed it after a year), and broader programs for underwater homeowners (the Geithner Treasury even stood against simple language that would have made TARP money available for legal advice to foreclosed-upon homeowners, a bill sponsored by Sen. Sherrod Brown and Rep. Marcy Kaptur). He continued to take the poor advice of Larry Summers and Geithner, two men entirely vested in remaining in a state of denial over a deep, systemic crisis whose roots stretched back to when they were deregulatory Clintonites.
And so today our un-FDR, Barack Obama, merely added another layer of sandbags to the dike. Today he announced a program to cut "by more than half" refinancing fees, and to help "members of armed forces whose home was wrongfully foreclosed on."
Very nice, but with Obama it is always too little, too late."I'm not going to stand by and wait for the housing market to hit bottom," the president said, but in effect he's been doing just that. Contrast this with FDR, whose New Deal really did amount to overwhelming force. Here is William Manchester in his magisterial "The Glory and the Dream," describing Roosevelt's first hundred days: "Before Congress adjourned in exhaustion he would have delivered ten major speeches, given birth to a new foreign policy, presided over press conferences and cabinet meetings twice a week, taken the country off the gold standard, sent fifteen messages to the Capitol, and shepherded through its chambers thirteen major pieces of legislation, including insurance for all bank deposits, refinancing of home mortgages, Wall Street reforms, authorization for nearly $4 billion in federal relief, legalization of beer, and laws creating the Civilian Conservation Corps, the Agricultural Adjustment Adminiistration, and Tennessee Valley Authority."
In December, Obama basically admitted he'd been behind the curve his whole tenure. "I think we understood that it was bad, but we didn’t know how bad it was,” Obama said. Well, how would he, if he wasn't inviting into his administration on a regular basis all the people who WERE telling him, as of Jan. 20, 2009, just how bad it was (among them, Joseph Stiglitz, Kenneth Rogoff, Paul Krugman, and Paul Volcker, who was kept at arm's length), but instead listening to Larry Summers? My goodness, Harvard's Ken Rogoff was saying well before the 2008 election just how bad things were going to get. And this was a guy who advised John McCain!
If Mitt Romney, Rick Santorum or anyone else takes the presidency away in November, they should invite Summers to the inauguration. And give him a front row seat.
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