First, Do No Harm: Housing and the Election of 2012
Off to Virginia Beach to participate in the festivities surrounding the annual Clash of the Titans on campus there. After the participants have exhausted themselves in the afternoon’s debates, there will be a fine dinner at which it will be my job to move to show along, not unlike my day job on the radio. Should be fun, and Regent is always a great place to visit with an extraordinary student body and a wonderful faculty and staff.
Breitbart.tv’s Larry O’Connor will sit in for me tomorrow, and I hope Congressman John Campbell gets a chance to explain the housing finance proposals by his colleague Scott Garrett. Garrett’s a smart guy, but I think conservatives have to realize that now is not the time to “reform” the housing finance market when the sector is struggling to make it into recovery mode. Adding a new layer of uncertainty to a key sector via a massive legislative overhaul just doesn’t make any sense at all right now, and the GOP shouldn’t be wasting precious political energy on initiatives which simply cannot move through a Democrat-controlled Senate even if they did have majority appeal within the House GOP, which this ideas don’t seem to have.
The big focus has to be on spending and those measures which can advance the recovery without adding to the deficit. Garrett’s proposals don’t fit those guidelines, and they certainly don’t fit the idea of having housing rejoin the economy after three long years of decline.
One of the participants in Friday’s debate is former Harvard president, Clinton era Treasury Secretary and senior Obama advisor Lawrence Summers. Earlier this week Summers penned a Washington Post article on the housing crisis. He identifies the housing sector as the key to any real recovery, and whether or not you agree with his prescriptions for assisting the start of that recovery, the Garrett approach is not one that can do anything but further diminish the availability of credit for home purchasers, a sort of Smoot Hawley for housing. Like the demands for the end of the mortgage interest deduction that regularly issue from smart people who don’t know housing, the continued attempts to impose pure theory on the American housing market which is deeply intertwined with American values and vision just doesn’t make a lick of political or economic sense right now.
The hard fall of housing has a lot of reasons, and the GSEs are of course culprits. But the key task now is defeating the president and getting the economy and national security into responsible, competent hands. Ideologically appealing “big fixes” are exactly the wrong way to talk to homeowners across the country about their biggest investments and their most valuable tax advantage, and exactly what Democrats will use to cudgel the GOP nominee before audiences of homeowners.
If there is even one conservative political professional who thinks it is a good idea for the GOP to threaten home prices, send me a link.