Policy

Left Behind by the “Rescue”

At week’s end, there’s not much good news, but instead a world of pain to report. As of today, Americans have a “rescue plan” that doesn’t rescue millions of people […]

At week’s end, there’s not much good news, but instead a world of pain to report.

As of today, Americans have a “rescue plan” that doesn’t rescue millions of people sinking under the waves of a turbulent economy.

Today’s announcement by the Bureau of Labor Statistics reporting that the U.S. economy lost 159,000 jobs in September — the steepest losses in five years — spells the ninth straight month of a downward slide in U.S. jobs.

As the foreclosure crisis continues unabated, it rains down new forms of misery on the people caught in the maelstrom. On Sept. 30, NPR’s All Things Considered reported on the sharp rise in homeless kids who are denied access to their school district — despite the fact that the McKinney-Vento Homeless Assistance Act “guarantees students from homeless families the right to stay in the school they were attending.”

Even as the bad news flows freely, though, we should regard this week’s congressional work product as something to be superseded by better strategies and more effective policies for giving a helping hand to people in desperate need of a boost onto economic terra firma.

And there are some stirrings from a variety of quarters to indicate that innovative ideas are flowing along with the tide of misery.

In yesterday’s Wall St. Journal, former member of the Bush administration’s Council of Economic Advisers R. Glenn Hubbard, now a Columbia University professor of finance and economics, and his Columbia colleague Christopher J. Mayer, published an article putting forth a far-reaching plan for direct help to homeowners as a method for genuinely buoying the economy:

We propose that the Bush administration and Congress allow all residential mortgages on primary residences to be refinanced into 30-year fixed-rate mortgages at 5.25% (matching the lowest mortgage rate in the past 30 years), and place those mortgages with Fannie Mae and Freddie Mac. Investors and speculators should not be allowed to qualify.

Wow. These two gentlemen are conservatives, and yet they get the root of the economic morass we’re in, as Peter Dreier wrote in his most recent Rooflines post: Most Americans can’t pay for their mortgages.

Today, there was a full-page ad in the Business section of The New York Times supporting the Hubbard/Mayer approach, paid for by Thomas Peterffy, founder and CEO of Interactive Brokers. I don’t know Peterffy’s politics, but his profile as one of Greenwich, Connecticut’s masters of the universe makes him an unlikely proponent of such a plan, doesn’t it?

As for George Soros, he’s a master of the universe who supports the Democratic Party. And he has his own plan for getting the credit markets flowing again to help the “householders” who are hurting, as he told NPR’s Chris Arnold on a piece aired today on Morning Edition.

If these four all recognize that stabilizing the housing market is the only cure for what ails our nation’s economy, what’s the matter with our elected officials?

Should housing advocates get behind the Hubbard/Mayer plan? The Soros plan? Some combination of the two?

Share your thoughts about these possibilities for helping those left behind by the “rescue.”

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