In the years since the collapse of 2008, the existence of mass unemployment has stopped being something the economic powers that be even pretend to regard as a crisis. To those directly impacted, the economic crisis is an emergency, a life-altering disaster the damage from which will endure for years. But most of those in a position to address it simply have not seen it in such terms. History will record that the economic elite has viewed the economic crisis from a perspective of detached complacency.
Two events from the last week have underscored this disturbing reality. The most widely covered was the Federal Reserve’s announcement that, despite a weakening economy, it still would not take steps to stimulate growth. The Fed may not like mass unemployment, but it dislikes inflation even more, and in its calculus, the hypothetical prospect of the latter outweighs the immediate reality of the former.
Here’s a second case, smaller but even more telling. The Obama administration has tried to prevail upon Edward DeMarco, the acting director of the Federal Housing Finance Agency, to offer lower mortgage rates to underwater home owners through Fannie Mae and Freddie Mac, which he controls. What interests me is not the proposal itself, nor even DeMarco’s obstinate refusal, but an editorial in the Washington Post applauding DeMarco for refusing to implement the program.
The Post is the voice of the Washington centrist establishment, and the logic of the editorial is a telling signpost. The Obama administration had argued to DeMarco that the mortgage relief was a pure win-win. Not only would the lower mortgage rates provide relief to Americans desperate to keep their homes, and secondarily to give them more purchasing power for other things that would provide a small economic stimulus, it would save the government money: with lower mortgage rates, fewer would default on their government-owned mortgages. DeMarco replied that he believed the taxpayers would end up spending money on the deal: not much, but some.
The Post’s thumbs-up editorial of DeMarco endorsed the reasoning that only a relief program that could be assured to cost the taxpayers nothing was worthwhile. It concluded, “with signs multiplying that the housing market may be finally bottoming out without this additional stimulus, perpetuating this particular battle does not strike us as the best use of the secretary’s time.”
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In the world of Romney’s top LDS donors – and Bain Capital.
Is a great newspaper blog that covers coal issues and tries to balance everyone’s interests. This is one of their best posts.