Foreclosure-Gate and the Economy: Doing Something Stupid Isn’t Smart

08-29-2011 • NakedCapitalism.com/

The Administration appears to be gearing up to try to Do Something on the housing and general economy front. Readers have no doubt wised up to the fact that Doing Something, Obama Administration version, generally consists (at best) of largely cosmetic measures accompanied by lots of handwaving. The latest sightings include yet another effort to push the 50 state attorney general settlement over the line by the phony deadline of Labor Day and more chatter among by members of the Democratic hackocracy in favor of an expanded Fannie/Freddie refi program as a way to fix the housing market. That idea appears to be moving front burner, since Baghdad Bob Ezra Klein has decided to weigh in. Adam Levitin did such an effective takedown that it obviated the need for yours truly to say anything. On August 25, Levitin, in “Financing Malarkey,” said: It looks like the Obama Administration is about to endorse some version of the Hubbard-Mayer plan of letting everyone (or at least everyone with an agency mortgage) refinance at today’s low rates, regardless of whether they are delinquent or underwater… I fail to see how such a plan will accomplish much.