McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators. Washington PostTo bolster his contention that the economy is not as bad as everyone says it is, and not as bad as the credit crisis would suggest, he says:
A housing "slump," a housing "crisis"? A "severe" price decline? According to the latest report from the National Association of Realtors, the median price of an existing home is up 8.5 percent from the low of last February. And according to the U.S. Census Bureau, the median price of a new home is up 1.3 percent from the low of last December. Home prices may not be at all-time highs -- and there are pockets of continuing decline in some urban areas -- but overall they've clearly stopped going down and have started to recover. So why keep proclaiming a "crisis" after it's over? Washington PostTwo years ago, articles in USA Today and other national newspapers were pointing to increasing foreclosures and predicting a crisis. But Luskin argues, incredibly, that the mortgage crisis is not that bad because it is mostly limited to America's poorest people, "urban" neighborhoods, [and color groups]:
According to the MBA (Mortgage Bankers Association), 6.4 percent of mortgages are delinquent to some extent, and 2.75 percent are in foreclosure. During the Great Depression, according to Wheelock's research, more than 50 percent of home loans were in default. Moreover, MBA data show that today's foreclosures are concentrated in that small fraction of U.S. homes financed by subprime mortgages. Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. This suggests that today's mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time.So, Luskin was still lauding and defending the predatory sub-prime mortgages that led to the current crisis, and could not be expected to oppose them even after all that has happened. Moreover, he thinks it is not cause for concern that 6.4 percent of mortgages are delinquent (and perhaps 6.4 percent of American homeowners are at some risk of losing their homes.) And he still hasn't understood that a cancer spread in America's poorest neighboorhoods has metastasized to a full-blown catastrophe for the nation as a whole.
Luskin's insistence that the housing mortgage crisis is limited to "some urban" (where Blacks live), and therefore is not really a crisis at all, is (a) not reassuring for Blacks who wonder whether a McCain Administration would show concern for us, and (b) still shows no understanding for the potential for bad loans in one sector to cause a generalized decapitalization and "run on the bank" in other sectors.
Anyway, how much cherry picking of statistics did Luskin have to do to compare the media price of homes now to the low of last December and declare that all is well? And Luskin cites, of all people, the Mortgage Bankers Association for the comforting belief that "today's foreclosures are concentrated in that small fraction of U.S. homes financed by subprime mortgages." After all that has happened, should the lobbyists for the Mortgage Bankers Association still be relied upon to determine when Bankers' abuses are grevious enough to require regulation, and whether the economy is threatened by their behavior or not?
The fact that John McCain's advisers were still talking like this on September 14 says that McCain is more concerned with reassuring his lobbyists and their mortgage lender clients than he was with preventing a meltdown in the American economy as a whole.