Media Pundits Ignore Gathering Storm of Housing Crisis
An economic tsunami is coming at us. We already witness the early squalls. Stocks are down. Gas prices are up. Financial houses are writing off billions in losses. The dollar has steadily declined. The head of the Federal Reserve warns that the economy will continue to slow.
At the center of the gathering storm is the bursting of the housing bubble and a spreading credit squeeze: over a million homes in foreclosure this year, another two million threatened next year. Housing prices down generally. The inventory of unsold houses reaching near-record levels.
So when Democrats gathered for the historic debate in Las Vegas last week, what did the CNN anchors ask them about? Campbell Brown started by asking Hillary Clinton to respond to a charge that she engaged in the ''politics of parsing.'' That wasn't enough for Wolf Blitzer, who pursued the charge that Clinton was ''triangulating.'' Not to be left out, John Roberts wanted to know if John Edwards was ''flip-flopping.''
And so it went. Would the candidates support the Democratic nominee? Merit pay for teachers? Does Dennis Kucinich disagree with unions on anything? What is this "boy's club" that Hillary's campaign says is ganging up on her?
Not one question -- not one -- on what the candidates would do on the housing crisis. Not one question -- not one -- on what the candidates would do to deal with an economy that is headed into trouble. The CNN anchors were so busy looking to play "gotcha" that they couldn't be bothered with asking about the economic tsunami that is gathering strength every day.
By the time people vote in Iowa and elsewhere, the economy -- and what we should do about it -- will be at the top of voters' concerns, along with the war in Iraq. It will be more important than immigration, more important than flip-flopping, of greater concern than the politics of parsing.
And what should be done will be -- and should be -- a matter of great debate. Hillary Clinton, embracing the economic priorities of her husband, says the first priority is to balance the budget. But the budget will be in balance if the economy continues to grow. It is the economic downturn that is already beginning to generate larger deficits at the national, state and local level. The key will be to generate growth. Cutting spending or raising taxes to balance a budget in a downturn is exactly the wrong policy.
Republicans say sustain the Bush tax cuts. But whatever stimulus effect the tax cuts had -- and it wasn't much -- is now history. Cutting taxes again at a time when the wealthy are speculating against the dollar and the corporations are investing abroad doesn't make much sense. And cutting taxes on the wealthy at a time of Gilded Age inequality is simply obscene.
We need action. Initiatives now are needed to save homeowners headed to foreclosure. Investments in new energy and conservation, in affordable housing and education can put people to work, generate growth, reduce our dependence on foreign oil, and help kick-start the economy.
As we should have learned with Hurricane Katrina, bold action and clear leadership is vital when a storm is gathering. Lives can be saved; property can be protected. Those who put their heads in the sand are likely to be swept away by the waves and the winds. It is too much to expect the media to supply any answers, but surely we can expect these pundits to ask about the storm that is coming this way.
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