Let me say upfront that I was and am an ardent President Obama supporter. But I have been very disappointed that we are not hearing enough about the housing crisis. I have a personal interest as our home has been on the market for months. We are not in foreclosure, thank goodness. But we have had to move to another state for family reasons. We are renting in our new state and still paying our mortgage on our home that is up for sale in our old state. Needless to say we are struggling. I was so hopeful that President Obama would attack this housing crisis immediately with passion and determination. I have not seen it and I am very dismayed. Housing is at the root of this economic decline. I am no economist but surely there are brilliant economic minds that can come up with a plan to try to straighten out this housing mess. Reduce interest rates to 4 or 4.5% - buy up the bad loans - do something - NOW!!! I want to see some urgency in the Obama Administration on housing. In my humble opinion this is the core issue which must be dealt with immediately. HOUSING should be the PRIORITY issue in any stimulus package!
Summers Time
What Obama's economic adviser is up against
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Larry Summers wants to know the odds. It's how his mind works, maybe because he's a son of economists. In his cosmos, certainty doesn't exist, but likelihoods do, and all of them—from supernovas to super bowls—are quantifiable.
I had lunch with Larry a few years ago at The Palm, the noisiest, most exuberantly political restaurant in the capital. But rather than schmooze the tables, he focused on grilling me about the odds of this or that candidate winning this or that election.
I was honored, but a little nonplussed when he pressed for specific numbers: 60-40? 55-45? Barack Obama? He never came up.
I'm remembering this about Larry because a friend of his in the Senate told me that Summers has begun to worry aloud (but not in public) about the dollar's potential deterioration as the world's leading currency.
A rapid fall could, among other things, be matched by soaring inflation.
I'm wondering what odds Summers is placing on, say, a 50 percent decline in the dollar against the euro and yen over the next five years if, as now looks quite possible, the federal government borrows (or prints) another, say, three trillion between now and then.
His odds-calculating brain has to be working overtime right now, for the credibility of the dollar is the major risk that must be balanced against Obama's just-begun effort to spend and lend us back to prosperity.
Step back from the headlines and consider some numbers for a moment:
The Troubled Asset Relief Program, the bank (and other sector) bail-out program, will soon have committed its full $750 billion. These are loans, in theory, but in fact are obligations unlikely to be paid back soon, if ever, in many cases.
Congress by February is likely to enact a nearly $1 trillion "stimulus" package, with huge spending increases and tax cuts equivalent to an extra, full year's "discretionary" federal budget.
Obama will soon unveil another credit-revival plan, this one calling for direct government acquisition of perhaps a trillion dollars or more in "bad" assets, taking them off the books of ailing banks.
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