Krugman On Mortgage Plans: Obama "Cautious," Clinton "Bold And Progressive"

New York Times columnist Paul Krugman writes on the presidential candidates' mortgage crisis proposals:

Barack Obama's speech on the economy on Thursday followed the cautious pattern of his earlier statements on economic issues.

I was pleased that Mr. Obama came out strongly for broader financial regulation, which might help avert future crises. But his proposals for aid to the victims of the current crisis, though significant, are less sweeping than Mrs. Clinton's: he wants to nudge private lenders into restructuring mortgages rather than having the government simply step in and get the job done.

Mr. Obama also continues to make permanent tax cuts -- middle-class tax cuts, to be sure -- a centerpiece of his economic plan. It's not clear how he would pay both for these tax cuts and for initiatives like health care reform, so his tax-cut promises raise questions about how determined he really is to pursue a strongly progressive agenda.

All in all, the candidates' positions on the mortgage crisis tell the same tale as their positions on health care: a tale that is seriously at odds with the way they're often portrayed. ...

Mrs. Clinton, we're assured by sources right and left, tortures puppies and eats babies. But her policy proposals continue to be surprisingly bold and progressive.

Finally, Mr. Obama is widely portrayed, not least by himself, as a transformational figure who will usher in a new era. But his actual policy proposals, though liberal, tend to be cautious and relatively orthodox.

Read the full column.

Comments

[LRM216]

Being bold and progressive is kind of what got us in the position we are now in, isn't it?

[Alessan]

NO, Tax cuts for the rich, and GW BushCheney war in Iraq is what got us into debt, it will
take Hillary Clinton and Bill, to bring fiscal responsibiltity back and a better economic standing
then we now have. It has been proven and done before for 8 years, it can be done again but not
with Obama or McSame.

[BBackSoon]

Not being an economist I only have superficial experience with an economy, but it sure seems to me that cautious might be a good thing here. Do we really need more kneejerk solutions? You know, your driving down the road and you hit a patch of ice, what do you do? Slam on the breaks and jerk the wheel? Or maybe you remain calm steer into the slide and slow the f**k down in the future!!! I think our problems are severe enough that one or two small things are not going to fix them, if they would the Repugs would have done it and big business would have made a profit.

[MiddleRoad1]

Very well said.

[Gordon]

I heard both Obama's and Clinton's speeches yesterday in their entirety. They sound pretty damn similar to me. Krugman is a Clintonite.

[bucagogo]

Finally. Let's look at their actual plans and policies. Are his even written down somewhere or are they still floating around in that loft mind of his. She's had these ideas, which he agrees with and has praised in the past for more than a decade. She just wants to implement them. You people keep spouting "the math" of the delegates. Yeah? What the math of his massive tax cuts versus all his (formerly Hillary's) programs for healthcare, education, etc. She should just do her math and then we'll ask him if he's done his homework or his preacher ate it.

[jstock]

bucagogo: since you obviously have access to a computer, why don't you go to Obama's web site for his very detailed plans. And leave his preacher out of it. Maybe you missed civics class, but our Founding Fathers said that there is to be no religious test for office. To me, that means that whatever church a person goes to (if any) is none of yours or my business. If you don't understand this, or if you have "issues" with Muslims, or if you don't like Blacks or Latinos or woment or gays, you don't belong in the Democratic party. We are a big tent party, but there's no room in here for bigots.

[comeonnow]

"Are his even written down somewhere..."

Geez, you can't take two seconds to do a google search? Sad.
http://www.barackobama.com/issues/economy/

[bucagogo]

well, i was sure he had some outline, geez even i took debate. What i meant is how is he gonna pay for this? Hmm and how is he really going to make the rich pay the taxes they should. Every politician since God has wanted the rich to pay their share, but they know the loopholes. He "will fight" he will "stop:" see there are two other branches of government. I want to see how he plans to get his ideas done with no knowledge of what it takes to get something passed. Why are none of these bills he has proposed on the senate floor?? Doesn't he have a job now. Shouldn't i be able to read the bills he's already written himself?

[JohnTalbutt]

The speech is in text form. If you have read it and you have criticisms, you missed the opportunity to make them.
Krugman is an economist and would be more substantive, if he had legitimate criticisms. What points he does make have to do with his support of the Clinton's Two examples: 1. He recently wrote about the economy and the war but failed to mention that most econmists recognize that a war stimulates at first, but at this point it increasingly depresses an economy. I think he failed to state this because it would be favourable to the candidate that voters believe would end the war quickest.
2. He frequently writes of the surplus collected from the American tax payer over the governments spending during the 1990s as the "Clinton surplus" It would be more accurately referred to as the economic surplus . If he has a bank savings account, I am sure he does not refer to it as Chase's savings. The way he names it we do not feel so sharply that we received no benefit from our surplus tax money. He was in charge of our money and it wound up in Bush's hands. If it really had been Clinton's, I am sure Bush would not have seen a dime.
.

[CaptainObvious]

This plan wasn't her idea. She expressed her support for the Dodd-Franks bill, just like Obama. The difference was, she tried to give the impression that it was her idea.

[MiddleRoad1]

See, you sounded reasonably reasonable until the end. You just couldn't resist the "his preacher ate it" part, could you? Ironically enough it is you Hillary shills who whine about Obama supporters being venomous.

[Ohg]

Who is riding the horse of the American Economy. Is there a time to pull in the reigns?..........
http://thefiresidepost.com/2008/03/28/government-regulation-nascar-horses-economies/

[DazedandConfused]

Gee, I’m supposed to believe Krugman’s POV after his column about Obama supporting President Reagan? He needs to be just a little less obvious in his support of Hillary.
Hillary’s plan calls for freezing subprime rates for 5 years. That isn’t bold – it’s DUMB (and Krugman knows that but fails to point it out). It’s much better to have a pool of money available for work-outs (vs. arbitrarily fixing the rates).
And it might have been nice for Krugman to point areas where Barack's plan was BETTER (or more complete) than Hillary's. This fiasco came about because of a lack of regulation (as well as easy credit from the FED). And what is Hillary's saying / doing about this? Her plan has no mention of regulation reform.

[linchbell]

I agree. Freezing some people's mortgages for five years means higher rates for those who get them later. I haven't found ANYONE who agrees with the five-year freeze. Except here--suspicious.

[crazyv]

what is lost is that Hillary's plan on freezing rates for 5 years is VOLUNTARY!!!
Once again as the master of double speak when challenged she says it is voluntary but on the stump never makes the clarification. The problem with her is when are her plans based on sleep deprivation and when are they truely meant? After all even prepared remarks are now misspoken.

[rgersmrk]

There is a good reason why she doesn't mention regulation reform, her husband signed the banking reform bill in 1998 which essentially deregulated banks and caused all of this predatory loaning.

[dadw5boys]

5 years would teach the lending companys a hard lesson because they would have to hold those loans no one else would want them for 5 years.

No more selling off the loans and making a quick profit and disappearing leaving others to hold bad loans.

[astitious]

Hillary likes to lie. It is no wonder that she is promising more than she is able, or even willing, to deliver.

[Teritt]

I think she promised Krugman Secretary of the Treasury.

[MiddleRoad1]

At the moment all she wants is to land the nomination. She will worry about delivering after the coronation

[aftershock]

Well at least Krugman was less hostile towards Obama in this article. And while Krugman may be right that Obama's plan is the more cautious, shouldn't that be what we're looking for? Radical and bold plans are either a) widely successful or b) huge failures. I don't think anyone caught up in the current mortgage crisis is in the gambling mood. The "pragmatic" tone is going to be more appealing to voters, and probably also more likely to gain support for passage in the house.

[boatbum]

Paul Krugman likes Hillary's plan because it calls for government takeover of the mortgage industry while Obama would like to see more resolution through the free markets with more oversight and regulation with companies who accept gov't backing.

As usual, Obama's plan appeals to a broader swath of people while Clinton's is far more partisan and polarizing.

[lochnessmonster]

How about they both get back to DC and enact some laws that will help people right now? I mean, they could be doing their current JOB and introduce some legislation NOW. Why wait until they get into the WH when they can do it NOW!

[DoYogaFeelGreat]

I have a "bold and progressive" idea -- let's let all those people who purchased houses they could not afford, lose their house to foreclosure. I don't see why the government should step in and bail out people who spend more than they can afford to.

[worldtraveller]

you got my vote...

[BBackSoon]

Then what? That is not an entire plan? So then the lenders weather this storm and start all this shit back up in 6 or 8 years? I agree that there should be no bailout, for both people and companies. Someone needs to shoot the Bear and send the officers to jail (I mean the real ‘Federal F**K me in the A** Prison, not the country club with the razor wire place). Perhaps if we started to send a few of the ultra rich to real prisons we would see better decision making on their part.

[wendelgee2]

Oh, so there are republicans in the house.
Well, guess what, if you have 2 million Americans who lose their homes, that will ripple throughout the economy. It will take down banks. And we'll certainly have a depression that rivals the Great Depression.
Good thinking there. Sit back and be smug and punitive, while the entire economy collapses.

[krisellyn]

You don't own a home, do you.

[iPolitics]

Yeah, yeah. And it's 1929 right.

[outnow]

Paul Krugman is right. Obama has disappointed on not taking more radical steps in this crisis. He is to be urged to support drastic efforts to stop this spreading crisis. I paid cash for my home and I do not stand to gain in any way from being bold. I don't like to bail out corporations, banks or homeowners but we are in recession and headed for a depression. Now is not the time to be cautious or conservative.

[cosmic]

disappointed who? maybe people who didn't read or hear his speech. With respect, I don't think that Obama's speech was in any way vague or cautious or conservative. In fact it was tremendously detailed, and put the current crisis into a progressive historical context. He addressed the structure and roots of the crisis, and committed to resolving it. He did not promise everyone extra money. He talked about the problem and it's solution in a complex and involved way. He did not pander.

That's Hillary's trick: making bold promises and proclaiming solutions when you're in the pocket of the people who caused this crisis and stand to gain from it. And for people who don't take the time to listen and understand, that sounds bold!

[wendelgee2]

HuffPost's Pick

If I were a homeowner in trouble, I'd want help refinancing my home. I was making the payments at one time, and then the interest rate tripled, and now I'm in trouble. So, that's Obama's plan. Help people help themselves. Clinton seems to be: throw money at it. Well...this seems to me like the difference between giving someone a fish and teaching them to fish.

[Veeve]

My friends and I have actually remarked on this very subject and in the very same way. All of Obama's policies reflect the 'teach you to fish' philosophy and all of Hillary's reflect the 'give you fish'.

My biggest beef with Krugman is that for a brilliant economist, he knows absolute jack about human nature.

I voted for Bill Clinton twice on a progressive platform and after 8 years all I got was a FMLA tee shirt. That's it. I understood that we were broke as a nation in '92 so I gave him another shot in '96. Fool me once, shame on you, fool me twice... I'm a frickin' idiot. I will not be fooled by the Clintons and their progressive platforms again. Krugman is an idiot.

[jsinclair]

Hillary's economic plan may be "bold". So was her health care plan back in the day. The problem is that she will never build the support needed to enact it. It's something nice on paper, may get a few votes, but everyone (including Krugman, I'm sure) knows it will never become a reality.

Of course that's not the purpose for her proposals now, is it? (Or for Krugman's 'support' of them.)

[oldrwizr]

And Obama knows it too, that may be why he is more cautious. He is being more realistic and honest as opposed to Hillary who is just trying to say and do anything to get votes.

[harriscrl3]

I really wish I had read this column when I was watching Anderson Cooper last night who said that obama is too liberal to be a president simply because he is voted the most liberal senator. You just gotta love CNN objectivity.

Obama imo is a pragmatist. They are somethings that need BOLD changes particularly in Foreign policy and things that dont need bold changes. The American economy for all its spluttering is basically sound there is no reason to make bold changes to it when its spluttering you tinker with it close some of the loopholes, be more aggressive about enforcing regulations, see if you can rework some of these loans without a massive bailout.

Carol