Friday, March 11, 2016

Trump and the Housing Bubble

At RealClearPolitics, Bruce Haynes has a fairly interesting essay about why people are supporting Trump. Some of it makes sense to me, but then this:
Voters perceived the response of those in power to the Great Recession to be the very essence of everything wrong with our political system — clear proof the system is irrevocably broken.

The economy collapses. A government response is needed. What happens?

The big banks, auto companies, and creatures of Wall Street who caused the collapse get “bailed out.” Republicans and Democrats both supported it. Save a precious few, almost no one was held accountable. The wealthy seemed insulated from collapse. It looked like business as usual.

But voters didn’t see a bailout for middle-class America. According to the Institute for Policy Research, “more than eight million Americans lost their jobs, nearly four million homes were foreclosed each year, and 2.5 million businesses were shuttered” during the Great Recession.

Those foreclosed homes were not likely to be in the Hamptons, on the Main Line, or in Georgetown. Middle-class America got crushed. Families lost homes. Workers lost jobs. Housing equity and retirement savings were wiped out, making things like college impossible to borrow for or pay for.

An anvil had been dropped on the head of middle-class America, and it was easy to connect the dots to understand who did it. The big guys blew up the economy, stuck their hands out to Washington, and got bailed out. The little guys lost their jobs and their houses and got nothing.
By and large, this is what happened. But why? It happened because Republicans – all Republicans, as in each and every Republican senator and congressman – insisted that it happen. The Obama administration had a big plan to bail out underwater homeowners, but with zero support from Republicans it had to be greatly watered down to get it through Congress. (Even in its reduced form it put $75 billion into helping people refinance, which is not nothing.)  And why were Republicans so opposed to helping homeowners? Because their most energized voters insisted on it. Remember that the incident that launched the Tea Party was on onscreen rant by Rick Santelli calling for Americans to rise up and stop Obama's plan to help homeowners avoid foreclosure.

The Tea Party has been the most impressive grass roots political movement of this century, and it arose specifically to block the sort of aid to ordinary homeowners that Bruce Haynes says "voters" wanted. Which voters? Certainly not the Republican rank and file. Nor was their opposition to a housing bailout the only way the Tea Party fought plans to ease the recession. Obama wanted a huge stimulus package, but that also had to be watered down so it could pass with no Republican support. Rather than wishing we had had more stimulus and a milder recession, Tea Party groups have insisted that the whole thing was a waste and we should have done nothing.

To support any Republican because you think the government should have helped homeowners instead of banks is nonsense on stilts; people who think that way should be supporting Bernie Sanders. Or Hillary Clinton, who also supported homeowner bailout plans. Organized Tea Party groups don't want the government to do anything to help ordinary Americans, except cut their taxes. If you want the government to work harder to help ordinary Americans, you should vote for Democrats.

I am beginning to think that Trump's campaign is a sort of Rorschach inkblot in which commentators see whatever they think is wrong with America.

1 comment:

Shadow Flutter said...

This is why people support Sanders. Or one reason. I made pretty much the same argument here a while back, but to partially explain young people supporting Sanders, not Trump. Trump's two main sources of popularity: political incorrectness, and trade treaties -- unthinking anger and a desire to get even being the energy source.

I have been thoroughly enjoying commentators addled thinking regarding Trump. Trump has bullied everyone, called everyone awful names, and what do commentators do? They get on Rubio for suggesting Trump peed his pants. You can't win.