Network News

X My Profile
View More Activity

Wonkbook: 57% worry about mortgage; midterm might cost $4 billion; to triangulate or not to triangulate?

What's amazing -- and, for the Democrats, terrifying -- isn't just that 57 percent of Americans are "somewhat" or "very" concerned about making their next mortgage payment. It's that two years ago, when the macroeconomy was in worse shape, that number was a comparatively modest 37 percent. Most Americans, in other words, have gotten more insecure over that period, at least on this metric.

There are all sorts of ways to explain this, of course. Unemployment drives foreclosures, and it's a lagging indicator. The financial crisis was driven by the expectation of this housing insecurity, not just the foreclosures that had happened in late-2007. Financial crises always take a long time to work through, and if you're a Reinhart and Reinhart fan, you know that housing crises and credit bubbles take years, not months, to work through.

But that's all cold comfort to the 57 percent of Americans who walk around with a knot in their stomach. They're hurting now. And they're about to vote.

Welcome to Wonkbook.

Top Stories

With outside groups included, this election cycle's cost could hit $4 billion, reports Dan Eggen: "There are three general tides of money swamping this year's elections, according to CRP's data: House and Senate candidates, who have reported raising $1.7 billion; the political parties, with about $1.1 billion; and outside interest groups, which have raised at least $400 million. That adds up to $3.2 billion, but the numbers are incomplete amid the frenzy of ad buys and other activity in the week before the election...Donations from Wall Street, medical and insurance firms, energy conglomerates and other corporations have shifted decisively toward Republicans over the past year because of policy disputes with Democrats and anticipation of a possible GOP takeover in Congress."

Democrats are amping up their secret campaign spending:

Most Americans say they worry about making mortgage or rent payments, report Ariana Eunjung Cha and Jon Cohen: "In all, 53 percent said they are 'very concerned' or 'somewhat concerned' about having the money to make their monthly payment. Worries are the most intense among those with lower incomes and among African Americans... there's now even more unease about making next month's rent or mortgage payment than there was two years ago. Back then, 37 percent of respondents said they were somewhat or very concerned about their monthly housing costs. Since that time, the economy has modestly improved."

To triangulate or not to triangulate, that is the White House's question, report Laura Meckler and Peter Wallsten: "Strategists in both parties see two options for President Barack Obama. He could seek deals on issues including trade, taxes and spending, following the model of President Bill Clinton, who after losing Congress in 1994, compromised with the GOP to overhaul welfare...Mr. Obama could also follow the model of Harry Truman, who dug in and successfully portrayed an opposition Congress as obstructionist. That would lay the foundation for a 2012 reelection campaign where the president could draw contrasts with his opponents... White House Chief of Staff Pete Rouse, in investigating the various options, is consulting with people who worked for Mr. Clinton in the mid-1990s."

Special guest interlude: Belle & Sebastian and Jenny Lewis play "Lazy Line Painter Jane".

Still to come: Sen. Kent Conrad is sticking up for TARP and the stimulus; Matthew Yglesias thinks Obama's biggest economic mistakes came in neglecting the Fed; Milton Friedman would support quantitative easing; and There Will Be Blood as a Super Nintendo game.


Kent Conrad is leading a defense of TARP and the stimulus, reports Lori Montgomery: "Over the past week, Conrad, a Democrat from North Dakota, has crisscrossed the state, delivering speeches to college economics classes and lecturing skeptical editorial boards, in addition to making his pitch on national television. On Thursday morning, thousands of North Dakota newspaper subscribers awoke to a full-page ad with colorful charts and graphs about the improving economy, alongside a vigorous defense of the bailout and the equally reviled 2009 economic stimulus package. The ad describes the perilous economic conditions that prompted a terrified Congress to approve the $700 billion bailout - officially, the Troubled Assets Relief Program, or TARP - just before the 2008 presidential election."

The administration is concerned that the foreclosure mess will hike up home prices, reports Sewell Chan: "Revelations about paperwork shortcuts and so-called robo-signed affidavits, as well as the likelihood of protracted legal battles by homeowners and inquiries by state and federal officials, will hinder foreclosure proceedings and discourage prospective buyers, a Treasury Department official said. 'Together, these two factors may exert downward pressure on overall housing prices both in the short and long run,' said the official, Phyllis R. Caldwell, chief of the homeownership preservation office at the Treasury."

Obama praised Larry Summers' tenure on The Daily Show:

Opponents of higher taxes for the rich are fewer, but care more, writes Larry Bartels: "The sizable minority of people who want the tax cuts for affluent taxpayers renewed seem to attach much more weight to this issue than the slim majority who want them to expire. In a statistical analysis taking separate account of prospective voters’ broader partisan attachments, those who support President Obama’s position on the tax cuts are only 6% more likely than those who are unsure about the issue to say they will vote for a Democratic House candidate. Even those who want to let all the tax cuts expire are only 9% more likely to vote Democratic. By comparison, those who want to keep the tax cuts for affluent taxpayers in place are 22% more likely to say they will vote for a Republican House candidate."

Milton Friedman would support quantitative easing, writes David Wessel:

The Obama administration is suffering because it paid the economy too little attention, writes Matthew Yglesias: "A party whose leaders realized that economic results were the most important driver of public opinion wouldn't have renominated a conservative Republican to head the Federal Reserve. Even more astoundingly, having given Ben Bernanke a second term in office, the Obama administration didn't get around to nominating anyone to fill the other vacant posts on the Federal Reserve Board until April 2010...Similarly, the extent of stimulus possible in the American Recovery and Reinvestment Act was famously limited by the need to gain Republican support. Given that, shouldn't someone have put reconciliation instructions into the budget resolution that would have allowed for additional stimulus to be undertaken by majority vote?"

Obama's economic agenda works for women, writes Neera Tanden:

British austerity measures are incoherent, writes Brad DeLong: "Cameron’s government used to claim that its policies would produce a boom by bringing a visit from the Confidence Fairy that would greatly reduce long-term interest rates and cause a huge surge of private investment spending. Now it appears to have abandoned that claim in favor of the message that failure to cut will produce disaster...But if you ask the government’s supporters why there is no alternative to mammoth cuts in government spending and increases in taxes, they sound confused and incoherent. Or perhaps they are merely parroting talking points backed by little thought."

Athletics interlude: The world's most awesome sports montage clip.


The White House is defending the choice to push health care reform before climate change legislation, reports Darren Samuelsohn: "'We really felt like it was a walk and talk, walk and chew gum' situation, said Melody Barnes, director of the White House Domestic Policy Council. Barnes said the White House believes the country can still tackle climate change without Congress passing legislation that caps greenhouse gas emissions, noting the push for executive agencies to curb emissions, coupled with efforts at the state and local government levels...'We’ve been absolutely thinking about this at every level,' Barnes said, citing the Environmental Protection Agency and Energy Department programs, as well as federal grants to help local governments build more sidewalks, light rail lines and street trolleys."

The inventor of SuperSoakers is revolutionizing solar power:

Action on climate change could require a cultural shift analogous to the turn against smoking, reports John Broder: "Professor Hoffman likened the widespread skepticism about the reality of climate change to the gradual acceptance of the link between smoking and lung cancer and other diseases. It was only when the public accepted the overwhelming scientific consensus on the dangers of tobacco use did policy tools like the banning of indoor smoking become socially and politically possible, he said...He said that the development of a feasible, low-cost alternative energy source to fossil fuels could also change the economic and public opinion equation relatively quickly."

Nanotech could stop electronics not in use from hogging electricity:

There are more politically viable alternatives to a carbon tax, writes Jeffrey Sachs: "A feed-in tariff subsidizes the low-carbon energy source rather than taxing the high-carbon energy source. In our example, the government would pay a subsidy of $0.10/kilowatt-hour to the solar-power plant to make up the difference between the consumer price of $0.06 and the production cost of $0.16. The consumer price remains unchanged, but the government must somehow pay for the subsidy. Here is another way. Suppose that we levy a small tax on existing coal power plants in order to pay for the solar subsidy, and then gradually raise consumers’ electricity bills as more and more solar plants are phased in."

16 bit interlude: There Will Be Blood, the SNES game.

Domestic Policy

The FTC is backing off its privacy probe of Google, report Cecilia Kang: "The federal government has ended an inquiry into a privacy breach involving Google's Street View service, satisfied with the company's pledge to stop gathering e-mail, passwords and other information from residential WiFi networks as it rolls through neighborhoods. Wednesday's decision by the Federal Trade Commission is a sharp contrast with the reaction of regulators in Europe. The United Kingdom has launched a new investigation into Google's collection of unencrypted WiFi data, exposing the company to potential fines. Germany told Google to mark its Street View cars that take pictures of neighborhoods and homes. The Czech Republic banned Google from expanding its mapping software program."

Cuts in federal building costs could save billions:

College tuition is rising in tandem with Pell Grants, reports Stephanie Banchero: "The average price of tuition and fees for in-state students at public four-year institutions is $7,605 this school year, a 7.9% increase over last year. At private nonprofit colleges and universities, the average price is $27,293, a 4.5% rise. Two-year state colleges saw a 6% rise to $2,713. But the federal government gave out $28.2 billion in Pell grants to students in the 2009-10 school year, almost $10 billion more than the previous year. Pell grant numbers for the current school year are not yet available, but are expected to rise."

Citizens United helps unions more than corporations, writes Daniel Henninger:

The National Archives are failing to keep government records properly, reports Lisa Rein: "Four out of five federal agencies are also at risk of illegally destroying public records, and the Archives has a huge backlog of documents that need to be preserved, the Government Accountability Office found. Two reports by Congress' watchdog arm found that many agencies do not follow proper procedures for disposing of public records as they assess whether to preserve or destroy them. And the Archives, as it preserves records electronically, has also left itself open to hackers. Among the findings of the year-long audits are that the Archives did not protect its computer networks with a strong firewall to keep out unauthorized users."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

By Ezra Klein  | October 28, 2010; 5:43 AM ET
Categories:  Wonkbook  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Reconciliation
Next: Programming note


With mortgage rates at all-time lows, now may be a great time to refinance -- if you meet new stringent criteria. Search online for "123 Mortgage Refinance" they got me the 3.21% rate even with my not so good credit history.

Posted by: brodynick28 | October 28, 2010 6:41 AM | Report abuse

Most of Clinton's mistakes were due to compromises with the GOP.

Anytime you agree to anything the GOP wants, it will hurt you and the country.

Things are going to get even uglier in the next few years.

Obama's legacy will be defined how he handles this juvenile GOP Congress coming into power. He will be seen either as the country's savior from these nihilists or as their roadkill.

Given that corporate America and transnational businesses (and the media) are firmly behind these laissez faire, robber-baron tea swindlers, my expectation is that Obama is going to be massacred.

Posted by: Lomillialor | October 28, 2010 6:44 AM | Report abuse

Kendrick Meek should pull out of Florida's Senate race against Charlie Christ and Marco Rubio.

Meek is not a viable candidate.

Meek is double-digits behind Rubio.

The ONLY way to keep that nihilist Rubio from waking into office is to pull out and throw his support to Christ.

Christ is a much better choice than the extremist Rubio. With Meek's support, Christ would defeat Rubio.

Why national Dems continue to support Meek is a mystery and only shows their political incompetence.

Posted by: Lomillialor | October 28, 2010 6:54 AM | Report abuse

From Henniner's opinion cited above: "Freed to spend their own funds, AFSCME, the SEIU, and the National Education Association have spent $171.5 million, compared to political outlays of $140 million by the U.S. Chamber of Commerce, American Crossroads and Crossroads GOP."

And from the cited WaPo piece: "America's Families First Action Fund, a 'super PAC' that can raise and spend unlimited money, has dumped more than $5 million into 19 House races over the past two weeks, with plans to spend more than $10 million by Tuesday. [...] The super PAC's funding also includes $1 million from a nonprofit affiliate, America's Families First, which does not have to report its donors publicly."

Note the names in the WaPo report -- America's Families First and America's Families First Action Fund are distinct corporate entities which can cross-finance ("launder") just like Center for American Progress and Center for American Progress Action Fund have done for a decade.

This sort of electioneering via money laundering requires attention; however, Social-Democrats have historically relied on such schemes and therefore have historically opposed reform efforts.

Posted by: rmgregory | October 28, 2010 7:31 AM | Report abuse

"White House Chief of Staff Pete Rouse, in investigating the various options, is consulting with people who worked for Mr. Clinton in the mid-1990s."

Two results of that rapprochement are Gramm-Leach, and the CFMA, which guaranteed our current financial crisis. Consulting Clinton administration veterans on anything financial is a recipe for complete disaster. Rubin and Summers were the two greatest "moles" ever planted within government by Wall Street.

Posted by: 54465446 | October 28, 2010 9:56 AM | Report abuse

Post a Comment

We encourage users to analyze, comment on and even challenge's articles, blogs, reviews and multimedia features.

User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions.

characters remaining

RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company