The new housing measures that Obama announced at his news conference today amount to more desultory evidence that this president has been, again and again, behind the curve on the Depression-sized crisis caused largely by massive mortgage securitization fraud and the collapse of credit. If there is anything that can give his GOP opponents hope, it is that Obama continues to resemble a New Orleans official who, day after day, keeps adding another layer to the old dike in the middle of Katrina, desperately hoping as the floodwaters slosh ominously over the top, rather than building a new dike. All that early bluster from Tim Geithner about an "economic Powell doctrine" -- using overwhelming force to combat the crisis--was largely nonsense, it turns out.
Instead we get the piecemeal president. At the beginning it was a too-small stimulus,as Noam Scheiber has recorded. Then distraction as Obama went on to other things, like health care. His administration stood against a broad array of fixes, such as the Volcker Rule that would have restored some of the spirit of Glass-Steagall (Obama finally backed it after a year), and broader programs for underwater homeowners (the Geithner Treasury even stood against simple language that would have made TARP money available for legal advice to foreclosed-upon homeowners, a bill sponsored by Sen. Sherrod Brown and Rep. Marcy Kaptur). He continued to take the poor advice of Larry Summers, his chief economic advisor, who was in denial over the deep and systemic nature of the crisis because its roots stretched back to the deregulation Summers oversaw as Bill Clinton's Treasury secretary.
And so today Obama merely added another layer of sandbags to the dike. Today he announced a program to cut "by more than half" refinancing fees, and to help "members of armed forces whose home was wrongfully foreclosed on."
All very nice, but with Obama it always seems to be too little, too late. In December, the president basically admitted he'd been behind the curve his whole tenure. "I think we understood that it was bad, but we didn't know how bad it was," Obama said. Well, how would he, if he wasn't inviting into his administration on a regular basis all the people who WERE telling him, as of Jan. 20, 2009, just how bad it was (among them, Joseph Stiglitz, Ken Rogoff, Paul Krugman, and Paul Volcker, who was kept at arm's length), but instead listening to Larry Summers? Harvard's Rogoff, for one, was prescribing what was needed even before the 2008 election. And he was a guy who advised John McCain!
If Mitt Romney, Rick Santorum or anyone else takes the presidency in November, Summers should get a front-row seat at the inauguration.
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