Economic Fears Grow, Is Anyone Listening?

On Friday, there were new indications “that the spiraling subprime mortgage crisis is spreading from home loans to credit cards, potentially engulfing a far broader segment of Americans.” I thought when I heard the news… Wow… they’re catching on to what we already know around here.

How bad is it? Bad enough for Treasury Secretary Henry M. Paulson to say that “the U.S. economy had slowed “rather materially” at the end of 2007 and that “time is of the essence” in launching an economic stimulus package to stave off a recession.”

But please, don’t hold your breath waiting for BushCo to come to the rescue. We all know he’s in bed with the folks who don’t have to worry about the economy and he just doesn’t give a damn about the little people who are struggling and barely getting by.

Sometimes I really wonder if anyone is listening to the concerns of the American people about the economy? We here a lot these days about visions, but where’s the plans to fix the economy? To be honest, in addressing the increasing fears about the economy, I’d like to hear a candidate in this election say something like this:

If you’ve lost your job because construction has slowed down, you don’t care what the economists are talking about, do you? What you care about is who is going to help me?…

If you’ve lost your health care because the insurance company refuses to pay for the problem you and your family have, or they won’t even give it to you in the first place or your employer no longer provides it, it doesn’t matter what somebody in Washington is talking about. What matters is what you are going to do to take care of yourself and your family.

And, I’d like to know that a candidate has some solid ideas like this to fix the economy and that that candidate is listening:

Now here’s what I would do tomorrow if I could. First, I’m proposing a thirty billion dollar fund to help hard-hit communities and distressed home owners whether the foreclosure crisis. Right here, right here in California, you have 95,000 homes in foreclosure right now. Yesterday, Nevada, Nevada has the highest rate of home foreclosures in America. I sat down at a restaurant in Vegas talking to people who have already lost their homes. What happens in Vegas when it comes to foreclosure, can’t stay in Vegas.

We’ve got to talk about it across our country. This fund would give states and communities, it would give the mayor, it would give the speaker, it would give the lieutenant governor, it would give you resources to provide at risk families with desperately need services like financial counseling and legal assistance and help refinancing these unworkable, unaffordable loans and states and communities could also use these funds to offset the costs associated with rising foreclosures. Everything from maintaining vacant properties to service like community policing.

Because sometimes people have talked about his mortgage crisis in a very narrow way. Certain people are at risk of losing their homes or already have without seeing the broad implication of this. If you have home foreclosures in a neighborhood, you are likely in this housing market, to have vacant properties. When you have vacant properties you attract people that you don’t want to be near your kids. You begin to have lower properties tax revenues so services get cut back which makes the problem even worse. I want us to start understanding that on every problem we face in America, we’re in it together. It’s not us versus them, it is all of us together, we have to come up with solutions and I believe we can start by focusing on them.

Second, I’m calling for comprehensive action to end the housing crisis and keep it from dragging down the entire economy. Here’s what I would do: Number one, I’m calling for a 90-day moratorium on foreclosures. No foreclosures for three months. So if the bank is about to foreclose on your home, you’ll have some breathing room to try to figure out how to restructure your mortgage. Because here’s what’s happening, starting last March I said, we’ve had predatory lending practices, we’ve had people who put homeowners into mortgages they couldn’t afford because they got more money for having a higher interest rate mortgage, we have a lot of people who could pay a good interest rate on a mortgage who were pushed into the ajudstable rate mortgages and once they go up, they’re beyond somebody’s’ ability to pay for it.

We have a lot of families who right now could stay in their homes and pay the mortgage they’re paying but a lot of pressure is coming from the investors who bought all of these mortgages. Because you understand it’s not your local bank, its not the fellow who sold it to you who’s now holding the mortgage, it’s somebody sitting in Shanghai or in Dubai or Berlin or in London or somewhere else in the world and what they’re saying is “ok I’m supposed to get an interest rate return up here and if you stop me from getting that then I’m not getting the return on my investment.”

That’s why last month I went to Wall Street, I represent Wall Street and I’m proud to do that because there are a lot of things that come out of there that raise wealth and give people opportunity but on this issue Wall Street is complicitous with the banks and the mortgage brokers and the lenders and everybody who took advantage of Americans in this mortgage crisis.

So if we can get a moratorium then we can get people to come in and say look why would you take somebody’s home away because then you’ve got a vacant property you’re probably not going to be able to sell – they’re paying $700 now you want to jump it up to $1,500 you know they can’t pay that. Do you want some kind of return on your investment or you want a foreclosure with nothing ahead? Then I want to say, look, we have to freeze interest rates for five years. Let’s just say we’re not going to raise the interest rates on our mortgages. We want to convert these unaffordable mortgages into loans that families can afford. So if you have an adjustable rate mortgage that is about to skyrocket, you’ll have the chance to stay in your home and pay affordable payments.

Now we’re going to have to end the abusive practices that got us to where we are. And let me just mention one because it is the one that I get the most upset about and I heard about it yesterday talking to homeowners in Nevada. A lot of people who were first time homeowners or who moved from a very small home with a growing family to a larger one, signed these mortgage papers – I got to tell you, I skimmed my mortgage papers, I didn’t read them. I didn’t know what was all that fine print and those pages and pages of legalese and most people who signed on the dotted line relied on what they were told.

A lot of people who were these first time homeowners, they wanted to do the right thing. They talked to their friends and their families, people said, “You’ve got a house now, if you can pay it off you’ll own it free and clear sooner.” In addition to the interest payment people started putting a little bit more in the check, because they thought they were doing the right thing. What they did not know is that there is a provision in a lot of these mortgages for prepayment penalties. In other words, you tried to do the right thing in your mind and you got hammered with an automatic increase in interest rates because the investors didn’t want you to pay it off any sooner, they wanted to penalize you from trying. There are a lot of people out there who are being punished for doing what we would have thought was the right thing.

Now, next, we’ve got to invest in emergency energy assistance for families with skyrocketing heating bills this winter. Today, nearly 40 million families across America are eligible for this assistance – but only about 16% receive it. A lot of parents and the mayor and I met a lot of people in New Hampshire and in Iowa in the snow, in the below zero chill factor, who were saying us “how am I going to afford to pay my utility bills, I can’t go without the heat how am I going to afford to pay it? Well maybe I won’t take my prescription drugs. Maybe I’ll postpone the mortgage payment and hope that I can catch up with it later.” So we’ve got to do more to get that assistance directly to people. And that’s why I would provide an additional $25 billion in emergency assistance – enough to cover every single person who needs it so we can do the right thing.

Fourth, I would extend and expand unemployment insurance, including doubling the number of weeks people are eligible for assistance. Because if you’re out of work and you’re struggling to find a job, you deserve a little extra help because if the economy is sliding into recession, there might not be a job there for you so what are you and your family supposed to live on and besides if you get that money in your pocket you’ll spend it and that will give the economy an immediate boost which will help us from going deeper into economic troubles

Finally, I told you what I would do to try to solve the problems. Here’s what I would do to seize the opportunity. It has everything to do with what the IBEW is doing along with NECA because this is exactly where I would put money. I would take immediate steps to jump-start “green collar” job growth all across America.

Sometimes when I talk about this I get blank stares to be honest. I really do because people can’t know it if they haven’t seen it. They know about white collar jobs they know about blue collar jobs but the idea of green collar jobs is something that folks are just beginning to appreciate. I teamed up with one of my fellow Senators a few months ago and we passed legislation to put federal dollars into training people for green collar jobs what I want to do is accelerate that money to come to places like here to train more people. These renewable energy jobs are high wage jobs that cannot be outsourced. This is what we ought to be investing in with federal dollars right now.

Number one, I would immediately implement a Green Building Fund to rebuild and renovate public buildings like schools, like municipal buildings, like law enforcement buildings, to make them more energy efficient. We know how to do this and I would do it immediately. I would issue an executive order saying there will not be any new federal buildings built or any one of the 500,000 that we have now renovated unless they become energy efficient and move toward carbon neutrality.

This would create tens of thousands, eventually hundreds of thousands and millions of new good jobs. People would be put to work installing those solar panels on display here and other countries are head of us. But that doesn’t mean anything because we can catch up in a hurry if we put our minds to it. But you’ve got to know.

Take Germany; Germany decided to invest dollars in new energy particularly solar. Last time I looked, I don’t think the climate in Germany is as good as it is here in California but they have put nearly 300,000 people to work in a much smaller economy installing solar panels, making the displays, doing what is necessary to actually move practically and quickly toward renewable energy.

I would also pursue a crash weatherization plan to help people insulate their homes you can save up to 20% on your energy bills if you start today. And that is obviously heating in the cold and cooling in the hot. You can save 20% but a lot of people don’t know how to do that, they don’t understand it. Again here are jobs going into insulate homes, making sure that you have thicker glass, looking for ways to deliver on that 20% savings. I would begin to ask the utilities to in vest in conservation. It is in their long-term interest but more importantly it is in America’s long-term interest that we start saving on energy.

Here I have to applaud California because back in the 1970’s, which some of us can remember, a lot of us waited in line for gas for a long time. Right, Marvin, right? I remember getting my little, crummy car in line at 5 a.m., spending an hour or two having somebody from the gas station walk down the cars and say, “We’ve run out of gas, why don’t you try the station down the road?” When that happened it should have been the biggest wake-up call in American history. We saw some changes; I give credit to President Jimmy Carter. He said, “We’ve got to do better. We’ve got to conserve more; we’ve got to be more energy efficient.”

You know what happened. The price of oil fell and so everybody said, “Thank goodness we don’t have to do any of that stuff.” And we got lulled into a false sense of security. But not California; California took a hard look at gas mileage and began to make some changes, took a hard look at electricity usage and today, on average, a Californian uses 50% less electricity than anybody anywhere else in America. California has led the way, made a difference. And I am strongly supportive of what the state is trying to do to begin to regulate tailpipe emissions. It’s been a big fight with the EPA and the Bush administration but California can be the leader again.

I would also do more to offer tax credits sooner rather than later for consumers who make energy efficient purchases – from upgrading your appliances, to buying hybrid vehicles, to installing new windows in your home.

We all know that this is not only the right thing to do, this is smart. It’ll save you money. I just recently was briefed about a new plug-in electric car that runs on a new battery by an American car maker – because that’s my goal; to have these cars made right here in America.

And after test driving it for six months, they got 15,000 miles on ten gallons of gas. Because think about this: If Henry Ford were to come back today and go out in the parking lot here and ask a couple of the IBEW members to let him look at your car, he’d be amazed at the size and the power, he’d be amazed at the GPS – the fact that somebody would talk to you and tell you where to go, that would be astonishing, that’s science fiction – and then he would lift up the hood, and what would he see? The internal combustion engine. It really hasn’t changed that much since the Model T.

We need to have a Strategic Energy Fund that is looking at how we have new technology like what you are doing right here, with everything from our vehicles to our homes to our businesses to our utilities and make it a comprehensive plan.

If the economy continues to worsen, if all of what I just proposed were put into place as an immediate jumpstart to get economic action going, to get consumers spending again, then I think we should look at providing an additional $40 billion in tax rebates to working and middle class families – not to the wealthy, they have more than gotten their share of our tax dollars.

This relief would follow the same principles as the other initiatives I’ve outlined today. It would provide immediate, short-term help, targeted to those in most in need and it would be fiscally responsible.

Now, will this be easy? No, it isn’t easy, but I think if it were easy some other country would do it. We’re the people who are supposed to do what is hard. We’re the innovation nation. We’re the folks who roll up our sleeves and get to work together. Years from now I hope that our children and grandchildren will look back at this election and say, “Wow, thank goodness. This is when America came back and we came back strong.”

Right now we’re in a big hole; we’ve got to dig ourselves out. I want to pass out shovels to everybody, because I don’t think it’s in America’s interest to borrow money from the Chinese to buy oil from the Saudis.

I am going to do everything I can to make sure that we solve our problems. Elections are not just about speeches, they’re not just about all the cameras showing up. They are about what happens when a leader has to finally make some tough decisions. We’ve got challenges around the world – ending the war and dealing with all of the problems we are going to inherit from President Bush. We have economic challenges, health care challenges here at home. I am listening. I have always listened…

There was only one candidate that gave a speech on the economy on Friday. The candidate who has been listening — Hillary Clinton.

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7 Responses to Economic Fears Grow, Is Anyone Listening?

  1. alrudder says:

    I’m actually not worried about the economy (at the kitchen table level) getting the short shrift. I think when times are tough, it is a law of physics that politicians talk about it.

    I blame the candidates and the media for underreporting what we all know to be titanic moral and policy questions racing the next president:

    1) Extraction from Iraq, and what moral culpability the US Government will owe the people of Iraq
    2) Improvements in homeland security and domestic intelligence gathering
    3) Setting up a legal framework to deal with detained “bad guys”
    4) The government’s own fiscal situation. On the revenue side there is the AMT which is really a class war between the rich and the upper-middle class. The coming explosion in Social Security and Medicare spending.

  2. Darrell Prows says:

    What does “I am proposing” mean? If she means “this is what I would ask Congress to do today if I was the President today”, I’m not impressed. Talk is cheap.

    If she means that she has authored and is sponsoring this as a bill, that is a positive sign, because it means that she’s got enough on the ball to be a candidate and an effective Senator simultaneously. If it also means that she’s going to work this Bill to the max, and she does manage to swing the thing, then I’d say we need to elect her. She will have earned it. Handeling a campaign and spearheading an important piece of legislation at the same time would be a singularly impressive accomplishment.

  3. Darrell

    There’s more details of her plan here. The way I am reading this she’s outlined an economic stimulus plan that she would work to implement when elected. Short term — yesterday she “called on Congress to stand ready to provide an additional $40 billion in direct tax rebates to working and middle class families if the economy continues to worsen.”

    I can check and see if I can find out if she’s actually going to propose legislation when Congress goes back in seesion. I get the impression she is.

  4. Darrell Prows says:

    Maybe I hope for too much but I’d really like to see one of the candidates who was able to work for us at the same time as working to try to get our votes. That would be outstanding.

  5. Darrell

    I distinctly remember Kerry making proposals in ’04 that he backed up with some sort of legislation. And of course Dodd championed fighting the FISA bill while running and put up his legislation. It is of course whether COngress will pass it and whether the fool in chief will sign it!

  6. Alrudder

    I know a lot of people around me worrying about the economy at the litchen table level. I ran into a former employer today who like me owns a small business. Times are tough for small businesses.

  7. alrudder says:

    maybe my phrasing wasn’t right. I know these are tough times and I am sure that all politicians will be talking about it justifiably.
    More to the point, Hillary is doing a much better job of speaking in vivid concrete terms about solutions for people. It appeals to more people than Obama’s high minded speech.