The plan for dealing with homeowners struggling to pay mortgages could in an instant reverse a lot of the psychology of fear that has gripped many people —if the terms of the plan are clear and the promise of timely assistance is specific and believable. Simple, direct explanations of who is eligible for what would be a wonderful change from the many plans over the past year that few understood and fewer used. Anything that helps build the bottom on housing powers the recovery. But a repeat of last week’s ambiguity about the banks will add another layer of evidence to the president’s growing reputation for overpromising and underdelivering.
With the car companies, a quick decision to throw in with them or cut them off is much preferred to a long round of deliberations prior to a bankruptcy filing. Again, we don’t need another Hamlet-like performance bemoaning how awful it all is and how it is going to take superhuman effort etc. Get on with it. Quickly.
With Brian Wesbury and others, I expect the recovery to arrive sooner and with more energy than most, but I also believe the starting gun has to go off in millions of minds via clear government signals about the rules of the road. The stimulus was a botched attempt to deliver such a signal because a sophisticated public understood it to be an exercise in rewarding constituencies of the Democratic Party, not a growth measure.
Assistance to homeowners and the car companies are much more clearly non-political interventions and could earn GOP support in Congress –provided the Administration’s proposals don’t attempt to pick winners and losers based upon voting patterns, and provided that the UAW shares in the pain of the restructuring. President Obama gets a second chance to fashion a bipartisan approach to part of the economic problems, and we should hope he doesn’t whiff again.