The socialist free-marketer

August 31, 2009

Oh the irony of ironies.  While News Corp is off calling Obama a socialist he is quietly pushing reforms Republicans have wanted for decades: Introducing competition to public schools via charters.

I was discussing yesterday just what will happen to the bottoming out of the housing market after all the tax credits, foreclosure mitigation programs, and rock-bottom mortgage rates end.

I argued the small rush of newcomers seduced by a bottom, and the improving economy (and therefore more relaxed lending) might be enough to hold sales and prices steady.

But then I found out about the administration’s plan to use 4.2 billion of stimulus funds to buy foreclosed homes and turn them into federal subsidized housing.  By my quick calculation that’s about 40,000 houses at $100,000 each, which is about 6% of current inventory, a big enough share to support the market.

Seems like a perfect plan to me: Ensure sustained recovery, put foreclosed homes to use before they fall in disrepair, help people who did the worse through the crisis, and expand a helpful government program on the cheap.

This is not the 90s

August 12, 2009

The constant comparisons between the current healthcare push and the Clintons’ are superficial and misguided.  It is actually much more like last year’s presidential campaign.

First off, the Clintons wrote the bill behind closed doors and then sent it to congress to rubberstamp.  When it came time to sell it congress was MIA, so it was left to Hilary alone.  A lady driving around in a bus.  This time around there are 200+ salesmen with skin in the game, that know their respective constituents and what moves them.  That means every day we are going to have dozens of advocates on local radio, network TV, morning shows, op-eds, etc.

On top of that you’ve got the best explainer in chief the White House has ever seen, a great communications machine, and an organizing arm.

Now think back to the presidential campaign: Early on McCain made outrageous accusations and fabrications about Obama.  That gave him an initial bump, but strategically it was a huge mistake because it gave Obama months to disprove each and every one.  Independents started seeing through the lies and distortions, and by election day nothing McCain could throw stuck.

Same thing is happening now.  Lies, misrepresentations and innuendos are scaring the beejesus out of grandma, but after a couple weeks of further silliness, and disproving from proponents, this tactic will lose teeth.

In the end public support will be split very much as in the election: 100% of Fox viewers (i.e. Republicans) will hate it.  Independents will lean in favor and Democrats will all support it (even though many will have to swallow hard).  Only difference is that since the election Republicans have bled members.

Of course this isn’t a popular vote, so it remains to be seen what a 57/43 opinion split will do to move Blue Dogs and the Maine Twins.

Interesting visa program I didn’t know existed:

A bipartisan group of senators is pushing to save the EB-5 visa program, scheduled to expire at the end of September. The program grants temporary visas to foreigners who invest at least $500,000 in distressed areas. If an investment creates at least 10 jobs for American workers, the temporary visa can become a permanent green card. Last year, 945 EB-5 immigrants invested more than $400 million in U.S. ventures.

Some examples

Very interesting acts of civil disobedience people are coming up with in Iran:

The second phase plays out in a boycott of goods advertised on state-controlled television. Just try buying a certain brand of dairy product, an Iranian human-rights activist told me, and the person behind you in line is likely to whisper, “Don’t buy that. It’s from an advertiser.” It includes calls to switch on every electric appliance in the house just before the evening TV news to trip up Tehran’s grid. It features quickie “blitz” street demonstrations, lasting just long enough to chant “Death to the dictator!” several times but short enough to evade security forces. It involves identifying paramilitary Basij vigilantes linked to the crackdown and putting marks in green — the opposition color — or pictures of protest victims in front of their homes. It is scribbled antiregime slogans on money. And it is defiant drivers honking horns, flashing headlights and waving V signs at security forces.

Good rundown of why it’s needed, the logistics, and what needs to be accomplished.

No, not Obama, not Baucus, not Grassley.  It’s Doug Elmendorf, CBO director.

Not once, or twice, but three times he has scored Congress proposals’ cost way higher than expected, which has resulted on damaging headlines. His rationale is that he is being conservative, and he will not credit any cost savings from changes and programs that aren’t proven.

Unfortunately there is little his predecessor Peter Orzag, now Obama’s OMB director, can do about it.

Krugman is crying foul, but a lot more pressure needs to be applied.