Week In Politics: Stimulus, Mortgage, Mayors
MICHELE NORRIS, Host:
And we're joined now by our regular political commentators, E.J. Dionne of The Washington Post and David Brooks of The New York Times. Welcome back to both of you.
DAVID BROOKS: Good to be with you.
DIONNE: Thank you.
NORRIS: Well, Mara's given us a preview of the week ahead, but let's take a moment to reflect on the week we just had. We had the signing of the stimulus bill on Tuesday and then the unveiling of the president's program to help struggling homeowners on Wednesday. Some are not happy about what they've heard, particularly with the mortgage relief plan - including CNBC's Rick Santelli.
Santelli reports from the floor of the Chicago Board of Trading. Yesterday, the traders around him became part of his - well, we can almost call it part of theater we saw there on the floor. Let's take a quick listen.
RICK SANTELLI: How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise their hand.
(SOUNDBITE OF BOOING CROWD)
SANTELLI: How about we all - President Obama, are you listening?
NORRIS: E.J. Dionne, if you watched the White House briefing today with Robert Gibbs, apparently, yes, they were listening, and they weren't happy. The White House seems to be very much on the defensive about this.
DIONNE: Right. And I think that it is - Santelli's rant was, really, an attempt to take populism that's now directed against the super rich and try to figure out some other place to direct it. The Obama folks decided as many people - liberal, conservative - had said that we can't get out of this mess if we don't begin to help some of the homeowners to try to get out of the mess they're in.
There are a lot of homeowners who are in the mess not because they bought too big a house or had that extra bathroom, but because they've run into financial trouble like everybody else. This is a very narrowly targeted program. There's a case to be made that it's not big enough. And if the Obama administration had not acted, it would've been attacked for not acting on the core problem.
A lot of Republicans have been saying, you've got to help the homeowners. So that, I think, in the long run, the Obama administration is going to have the better of the argument. Having said that, there will always be people who will say those folks don't deserve my tax money.
NORRIS: But there are still some questions. Questions, for instance, will the administration withhold funds for lenders who knowingly wrote bad loans? David, Santelli points to an issue that is a bone in the throat for Republicans. The notion of the housing relief plan rewards irresponsibility.
BROOKS: Well, there's no question that it does. What it does is subsidizes homeowners, some of whom who bought more home than they could afford. And the people who pay are people who bought less home than they could afford. So, there is that fundamental injustice. And I sort of understand the argument. I guess my counterargument would be - is we're not only individuals, we have a system - a system we all share.
And the system right now is so unsteady that we have no individual responsibility in our own system because the economy is so unsteady. If you deserve a job, sometimes you get laid off. If you don't deserve, sometimes you don't get laid off. And the government's fundamental responsibility right now is to make sure the system is stable.
And that may reward people who took unnecessary risks. But we just have to live with that because the primary responsibility here is not to worry about the moral hazard, it's to keep the stability of the system, as a whole, intact. And I think the housing plan is a pretty moderate and respectable way to go about this.
DIONNE: And also...
NORRIS: Go ahead, E.J.
DIONNE: ...just on David's system point, when a neighborhood has a certain number of houses that are in foreclosure, if that number gets too high, the whole neighborhood goes down. So, even if you are helping someone who may have shot beyond their means, you're also helping all the people in that neighborhood who want to keep their house and having - you're protecting them from having their property values go down unjustly.
NORRIS: Now, David, you talked about the administration's fundamental responsibilities. Some would say that one of their fundamental responsibilities in this period of uncertainty is to explain the way forward. And with every one of these programs, be it TARP, or - the Trouble Asset Release Program - or the Housing Assistance Program or the stimulus package, there are always these questions about details. Not enough details. Where are the details? Does the administration need to do a better job explaining how these programs will work?
BROOKS: Well, they're caught in a bind. The country desperately needs some big bold action. But there's no sense - and I certainly don't believe that ten guys sitting around the White House with legal pads know exactly what to do - and so, they're faced with just this great unknowns. They don't - no one really understands the problem. And I think what they're trying to do, with the best of intentions, is try to balance a lot of pressures.
And so, what they tend to do, and we've already begin to see how they work, they tend not to take the big simple thing that would totally transform the system, like, say, nationalizing the banks, because they don't want to be that interventionist. They want to do something bold, but not something revolutionary. So, they tend to wind up with sort of technocratic solutions, which involve a lot of medium size changing of incentives.
I happen to think that's a pretty moderate approach, but it doesn't give you the big simple plan that could even promise to solve problems. So, what we've got is a country that knows we need to solve problems and the series of quite complicated policies that are basically hard to understand.
NORRIS: E.J., Republican strategist Mark McKinnon wrote a piece this week, and he asked this question: Mr. President, do you have the guts to be an optimist? What sort of tone should President Obama be setting when he goes to Congress next week? Does he need to present another doomsday scenario to let people know that it's really, you know, rough flooding is ahead, or does he need to be more of an optimist?
DIONNE: I think, first of all, solving all these problems is really, really hard and the sooner we face up to that, the better. Secondly, the president has a very difficult balancing act here because he cannot pretend that these problems aren't hard or deep. And he cannot look like someone who is indifferent to the suffering out there and the fear that's out in the country.
On the other hand, he cannot paint such a bleak picture that people don't see hope at the other end. He really - he sold hope in the last election. Hope is very much what he needs to help sell now. I think if he tilts too far one way or the other, he's making a mistake. But if he tries to walk up the middle of those two, he's open to criticism on both sides. In terms of...
NORRIS: That sounds like he doesn't have - there's no good choices there.
DIONNE: Well, no, he does pretty well at balancing acts. He's done well at balancing acts for at least two years, since he announced his candidacy. He can pull it off. It's just harder than doing one or the other. But I don't think he can do one or the other, just in terms of the plans.
I think the problem they ran into on Secretary Geithner's plan - it helped save the banks - is they built it way up, said it was a solution and then there were few details. You can't build something up and then offer so little.
NORRIS: Thanks to both of you. We'll have to leave it there. That's E.J. Dionne with The Washington Post and David Brooks with The New York Times. Thanks to both of you.
DIONNE: Thank you.
BROOKS: Thank you.