Mitt Romney On Foreclosurers: ‘Any Owners Who Lose Their Homes Are Getting What They Deserve’
Since the housing bubble began to burst six years ago, prices nationwide have fallen by a third. Nearly $7 trillion of home equity has been wiped out. Currently, some 14.7 million homeowners owe $700 billion more on their mortgages than their homes are worth. Going forward, prices are likely to fall further as banks put a backlog of foreclosed properties on the market. As home prices fall and more homeowners sink underwater, there will be more foreclosures and more price declines.
So what is Mitt Romney’s response? Bring it on.
In interviews and in the Republican presidential debates, Mr. Romney has said that the cure for foreclosures is for the government to get out of the way and let the process run its course. Once prices hit bottom, investors and want-to-be homeowners would presumably swoop in and prices would stabilize.
The argument might have some red-meat appeal, playing off the notion that any owners who lose their homes are getting what they deserve. It is wrong on several counts:
Efficiency.
Mass foreclosures are a rotten way to stabilize the market. They impose huge costs on neighbors, communities and local governments, and on the broader economy, as falling prices erode equity, depress consumer spending and mire the housing market in a deep hole.
Logic.
Who does Mr. Romney think will buy up millions of foreclosed properties? Borrowers who lose their homes to foreclosure or who sell their homes for less than the balance on their mortgages can be denied credit for years; many will never be homeowners again.
Many college graduates, unable to find jobs, are moving in with their parents, not starting careers, not starting families and not becoming first-time home buyers. High school graduates are despairing of any economic toehold. Investors are inclined to buy distressed properties only if they believe home values will rise, a confidence that is hard to come by in a market that is threatened by more foreclosures and renewed price declines.
Danger.
With the economy still weak and vulnerable to shocks, more foreclosures and the resulting price declines would only weaken the economy further.
Fairness.
The let-it-crash argument conveniently ignores that the housing bubble was the result not only of overborrowing but of reckless lending too. When the bubble burst, the banks were bailed out, while speculators and uncreditworthy borrowers — whom lenders had aggressively pursued during the boom — quickly began to lose their properties. But the economic damage went far beyond the “bad” borrowers, as evidenced by deep recession, ensuing slow growth, high unemployment and crashing home values — all of which has now harmed millions of homeowners who never went near a subprime mortgage. They are the collateral damage of the banks’ binge and bailout. They deserve help, not scorn.
That is not to say that every troubled borrower can be saved. Of the estimated 14.7 million underwater borrowers, 1.6 million are lost causes, according to Moody’s Analytics. Many have already abandoned their homes, leaving them vacant, or are hopelessly behind on their payments, often because of long-term unemployment. This group needs policies to help convert homes to rentals.
Another 1.6 million underwater borrowers have missed payments because of a setback, like job loss, that may prove temporary. They could be helped with forbearance, allowed to make no or reduced payments for a time, and make up the difference later, or with loan modifications that result in meaningfully smaller payments.
The remaining 11.5 million underwater homeowners are current in their payments, but are at high risk of default, since they have no equity to cushion a financial setback and no incentive to keep paying, especially if prices go down again.
Loan modifications that reduce principal balances are the best solution, because they restore equity and reduce monthly payments. The banks would take a hit on principal write-downs. So be it. Refinancings, which the Obama administration is in the process of expanding, also help, because a new loan with a lower rate makes staying in the home more affordable. Mr. Romney has said refinancing is “worth further consideration.” Investors in mortgage-backed securities will take a hit on refinancings. So be it.
At a recent debate, Mr. Romney was asked why he was willing to risk further huge losses in home equity by pushing foreclosures. “What would you do instead?” he replied. “Have the federal government go out and buy all the homes in America?”
No one is suggesting that. What is needed is a set of policies — rentals, forbearance, principal write-downs and refinancings — on a scale that tackles the problem.
By: The New York Times, Editorial, November 26, 2011
Restrictions On Birth Control Hurt Everyone
Restricting women’s access to birth control hurts everyone. It hurts women by limiting their ability to get an education or become self-sufficient, and risks their health when they can’t plan or space their pregnancies. It hurts children born into families not ready or able to care for them. And it hurts families by robbing them of the ability to decide whether and when to have a child.
That is why independent physicians, nurses, and other health professionals agree that providing access to contraception is good medical and economic policy. And yet – surprisingly – birth control is under attack. Anti-women groups, and some members of Congress, are pressuring the Administration to roll back some of provisions of the Affordable Care Act (ACA). The ACA guarantees access to important preventive health services without expensive co-pays. This includes contraception for women. But if anti-women forces get their way, thousands of employers will be allowed to refuse to cover contraceptives in their employer-sponsored health plans. These forces are attempting to directly interfere with the individual health needs of millions of women by limiting the type of care they can get.
A woman already knows how important family planning is to her health and well-being. She knows that the decision of whether and when to have a child is extremely personal, and she makes that decision based on many factors, including: her age, the presence of a partner, the size of her family, her physical and mental health, and her personal values.
A woman knows that if she has a chronic disease, pregnancy prevention is critical in reducing poor birth outcomes. She knows, for example, that she risks her health and the health of her fetus if she has diabetes and becomes pregnant before getting her glucose levels under control. She knows that if her blood pressure is uncontrolled during pregnancy, she could develop Pre-Eclampsia, a condition that can require immediate delivery even if the fetus is not full-term. And she knows that if she becomes pregnant while taking any number of commonly prescribed medications contra-indicated for pregnancy, fetal development may be impaired.
That’s why women overwhelmingly support birth control. Indeed, contraceptive use is nearly universal: 99 percent of women 15-44 years of age who have ever had sexual intercourse with a male have used at least one contraceptive method. The overwhelming majority of sexually active women of all religious denominations who do not want to become pregnant are using a contraceptive method.
Refusal clauses fly in the face of women’s needs, scientific evidence, and medical standards of care. Refusal clauses undermine and ignore the personalized decisions that all people make about their health.
The Administration should respect the decisions of women and their families, and hold firm on its commitment to improve the health of all Americans by basing its health care decisions on science and medical practice – not politics.
By: Emily Spitzer, National Health Law Program, The Hill Congress Blog, November 24, 2011
Eating Fruits And Vegetables Is Not A Job Killer
Major food manufacturers are readying their next attack on nutrition by calling proposed food marketing guidelines “job killers” that will devastate the American economy.
Earlier this year, the Federal Trade Commission, along with three other Federal agencies, proposed voluntary guidelines for marketing food to children to reduce sugars, fats and salts and increase fruits, whole grains and vegetables in the diets of American kids. In 2008, led by Senators Sam Brownback (R-Kan.) and Tom Harkin (D-Iowa), Congress asked for the recommendations to address the nations’ growing obesity crisis.
Studies show that one third of all children aged 10 to 17 are overweight or obese. In the past three decades rates have more than doubled among kids aged 2 to 5 and more than tripled among those ages 6 through 11.
A coalition of major manufacturers of processed foods, fast-food chains, and the media industry that depends on their advertising dollars are spending millions to derail the proposed guidelines. The FTC has already started to trim the proposal in response to the lobbying blitzkrieg but industry wants to go ever further. They want to use an industry-designed scheme that would declare Chocolate Lucky Charms, Marshmallow Pebbles and Cookie Crisp cereals as healthy.
Despite industry claims, these guidelines aren’t mandatory; they are voluntary guidelines developed by an independent committee of nutrition experts about how we can improve children’s health. They are sensible, science-based recommendations.
That hasn’t stopped industry predictions of economic disaster. According to comments filed by General Mills’ to the Interagency Working Group “the economic consequences [of the guidelines] for American consumers and American agriculture would be devastating.” They also predict “severe” economic consequences for the media industry and their employees.
They argue the voluntary guidelines would cause consumers to eat more fruits and vegetables produced in other countries and therefore fewer grains grown in America. According to research funded by the Grocery Manufacturers of America “demand for fruits and vegetables would increase by 1009% and 226% respectively” resulting in almost $500 billion more spent on imported food and $30 billion less on domestically grown grain.
Even if the voluntary guidelines were that effective and their study accurate, it’s audacious marketing spin to turn an overwhelmingly positive victory for public health into a big government, job killing attack on freedom.
Another industry-funded study claimed that the voluntary guidelines would result in the loss of 74,000 jobs. An analysis by the Economic Policy Institute, found the study riddled with “implausible” assumptions, historical inconsistencies and incomplete analyses of potential impacts to both the industry and economy as a whole. For example, the industry study assumes, without justification, a 20% decline in advertising and completely ignores the likely scenario in which companies shift advertising to other products or audiences. It also ignores the fact that there has been no negative economic impact since industry adopted its own guidelines in 2006. In fact, EPI concludes that the guidelines could have no impact on jobs or could even lead to job growth in other parts of the economy.
Finally, General Mills adds that the $1.6 billion in food advertising expenditures “would go up in smoke.” “$1.6 billion in economic activity cannot disappear without an impact on people’s jobs and livelihoods” they wrote.
While it’s likely food conglomerates would redirect their advertising dollars, media companies would also look for and find plenty of buyers. In fact, they’ve done it before. When Congress banned tobacco ads on TV and Radio in 1970 media companies stood to lose $220 million in annual cigarette advertising. Like their counterparts today, the networks, and broadcasters associations lobbied hard alongside big tobacco against the ban.
The media industry did fine. Total TV and Radio advertising sales has increased every year before the ban and after. According to media analysts, in 1969 ad expenditures on TV and radio were $4.85 billion. In 1972, they were $5.7 billion.
For decades, industries have opposed laws, rules and even basic consumer information that have made us all healthier. They always predict disaster but, in fact, they respond with new ideas and innovations and we all benefit. These voluntary guidelines merely suggest a path that industry should embrace.
By: David Cohen, Director, Cry Wolf Project, published in The Hill Congress Blog, November 23, 2011
The GOP “Wet Blanket” Fetish
The six Republicans from the failed super-committee, in an op-ed today:
The 2001 and 2003 changes to the tax code reduced marginal rates for all taxpayers as well as the rates for capital gains, dividends and the death tax. For technical reasons, all of these provisions expire at the end of next year — meaning that if Congress does not act, Americans will face the largest tax increase in our history. This prospect has put a wet blanket over job creation and economic recovery.
House Speaker John Boehner (R-Ohio), three weeks ago:
“I think the budget deficit and our debt serves as a wet blanket over our economy.
Sen. Susan Collins (R-Maine), in late September:
“Business owners are reluctant to create jobs today when they’re going to need to pay more tomorrow to comply with onerous new regulations. That’s what employers mean when they say that uncertainty generated by Washington is a big wet blanket on our economy.”
Former Sen. George Allen (R-Va.), seeking a comeback, in mid September:
” [T]ax hikes that President Obama has been pushing since he was elected and they will put a heavy, wet blanket on an economy.”
So, to review, Republicans believe the possibility of potential tax increases, regulations, the debt, the deficit, and uncertainty are all a “wet blanket.” I can only assume some focus group somewhere told pollsters they like this metaphor, which is why it’s being used so incessantly.
Let’s make this plain, shall we? The laws of supply and demand are not subject to a Republican filibuster. The economy is struggling because businesses don’t have enough customers. We have high unemployment and depressed wages, which lead to less demand, slower growth, and fewer new jobs. It’s really not that complicated.
Republicans, who should be able to understand these basics, are eager to make matters worse, undermining demand when we should be doing the opposite. And that’s the real wet blanket we should be talking about.
By: Steve Benen, Contributing Writer, Washington Monthly, November 26, 2011
“What’s His Name” Romney Still Waiting For The GOP Love
Moderator Wolf Blitzer opened Tuesday’s Republican debate by introducing himself and adding, for some reason, “Yes, that’s my real name.” A few moments later, the party’s most plausible nominee for president said the following: “I’m Mitt Romney, and yes, Wolf, that’s also my first name.”
But it’s not. Mitt is the candidate’s middle name. His first name is Willard.
And people wonder why this guy has an authenticity problem?
The debate, held at Washington’s historic DAR Constitution Hall, was focused on foreign policy. The subject matter seemed to offer Newt Gingrich, a former speaker of the House, the opportunity to highlight his experience and perhaps begin consolidating his sudden front-runner status. But if he expected to dance rings around the others in the minefields of international politics, he was mistaken.
Gingrich made only one mistake, but potentially it was a big one: He declined to pander on immigration. Instead of parroting the draconian party line, he stated the obvious fact that we’re not going to expel millions of illegal immigrants who have been in this country for years and become pillars of their communities.
You will recall that Rick Perry was leading in the polls when he, too, stumbled by saying reasonable things about immigration. Perry called immigration hard-liners heartless, while Gingrich encouraged the audience to be “humane.”
Romney, as usual, took the right position to appeal to Republican voters. He said Gingrich was wrong because “amnesty is a magnet” that attracts more illegal immigrants.
Ron Paul had smart and important things to say about the Patriot Act, calling the law “unpatriotic because it undermines our liberty” and arguing that “you can still provide security without sacrificing our Bill of Rights.” Gingrich, by contrast, argued that the Patriot Act might need to be strengthened. Asked which side of this debate she favored, Michele Bachmann said she was “with the American people.” I thought Gingrich and Paul were citizens, but never mind.
Bachmann then pulled the pin on one of the more nonsensical rhetorical grenades that she regularly lobs at President Obama: that he “has essentially handed over our interrogation of terrorists to the ACLU.”
The record shows that Obama does not coddle terrorist suspects with the niceties of liberal jurisprudence. Instead, he blows them to pieces with missiles fired by Predator drones. It’s possible to disagree on whether the administration’s program of targeted assassination is wise or effective, but no one can claim it’s soft.
Rick Santorum argued that we should be profiling Muslims for extra scrutiny at airports and sparing travelers who are deemed to present lower risk. Herman Cain said he favors a policy of “targeted identification” of potential terrorists, a concept so subtle that it defied Cain’s further attempts at explanation.
Romney got it right again, pledging “to protect the life, liberty and property of American citizens and defend them from foes domestic and foreign” without being specific about how this would be accomplished.
Perry had an interesting night. He stood by his promise not to send “one penny, period,” of U.S. aid to Pakistan until officials of that nation demonstrate “that they have America’s best interests in mind.” Bachmann called this position “highly naive,” pointing out that Pakistan is “too nuclear to fail.”
But Perry was undeterred. He went on to show a breathtaking lack of understanding of what’s happening in that part of the world, at one point saying that “we’ve got Afghanistan and India working in concert right now to leverage Pakistan.” That one sentence succinctly captures Pakistani officials’ deepest fear — being sandwiched by two enemies — and why they continue to support Taliban-affiliated militant groups that attack U.S. and Afghan forces.
Go home, Governor. Please.
Jon Huntsman had his best performance of the many debates held thus far, laying out a vision of U.S. foreign policy that was informed, nuanced and reflective of the real world rather than the make-believe world in which the campaign is taking place. Maybe he’ll be the next candidate to see a meteoric rise and fall in his poll numbers. Pretty soon, though, we’re going to run out of meteors.
Which leaves Romney still waiting for his party to show the love. He knows the issues. He says all the right things. So why do Republicans keep getting infatuated with these fire-breathing suitors who always, in the end, break the GOP’s heart?
Maybe voters just wonder about a guy who’s willing to tailor everything to please his audience. Even his name.
By: Eugene Robinson, Opinion Writer, The Washington Post, November 24, 2011
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