The Progressive Pledge: Help Main Street, Not Just Wall Street

A few days ago, I blogged about the progressive pledge:

In 2009 and beyond, I will be part of the movement that pushes Democrats to be bold progressives -- and that helps pass a bold progressive agenda into law."

Bold progressives will push Barack Obama and Democrats to press for help for Main Street, not just Wall Street. Specifically, bold progressives will press Barack Obama to adopt HOLC. Fake Bold Progressives will talk about being bold progressives and not say a word about HOLC.

By Big Tent Democrat, speaking for me only

< April 2008: McCain On Helping Homeowners | On HOLC: We Got The Republican; Can We Get The Democrat? >
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    You said it! (5.00 / 3) (#1)
    by Robot Porter on Wed Oct 08, 2008 at 10:09:22 AM EST
    Specifically, bold progressives will press Barack Obama to adopt HOLC. Fake Bold Progressives will talk about being bold progressives and not say a word about HOLC.


    As I said earlier this will separate the issue Dems from the blind partisans.

    I didn't sign that pledge (5.00 / 2) (#2)
    by Militarytracy on Wed Oct 08, 2008 at 10:10:58 AM EST
    I'm signing yours

    Sorta dangerous (none / 0) (#3)
    by samtaylor2 on Wed Oct 08, 2008 at 10:14:57 AM EST
    Signing pledges that mean X is dangerous.  Hopefully there are mutliple ways out of this mess.  Sounds like HOLC has its merits, but I would like to see other "progressive" plans and here about their up sides and down sides as well.   Hopefully this bail out can give us the time to find a lasting solution.  

    I have every confidence in HOLC (none / 0) (#4)
    by Militarytracy on Wed Oct 08, 2008 at 10:25:37 AM EST
    The current meltdown has so many things in common with what we call the great depression.  HOLC stabilized things for many families then and it can do it now.  Stability is the base from where we will "recover".  All the hot air economists say we have to find the bottom of the market and then it can recover.  The same thing is true for Main Street though.  Main Street is taking a hit, there is no way around that.  If you take a look at what our basic needs as human beings are and realize that one of them is in peril for many families then we have a major instability in the only real asset our society has.......the people living in it.  If our human basic needs are met we then have a base to build the rest of it from again and until the vast majority of the population has that confidence again our recovery will not be sound.

    Completely (none / 0) (#6)
    by samtaylor2 on Wed Oct 08, 2008 at 10:37:58 AM EST
    Agree.  I would just like to see other options.  This only option thing makes me uneasy.  It sounds like a very good solution though.

    I think part of my discomfort with such a huge solution, is that I don't have a complete defintion/ understanding of the  problem.   Is is just people can't afford their morgages, is it these securities (which I don't understand- nor do the people that traded in them it sounds like), is it "de-regulation" and of what, what combo is it of all of them?

    Other questions-
    I understand the HOLC in principle, but what cap do you put on homes in terms of cost?  Different regions even differnt area codes right next to each other are so vastly different price, how do you decide on what the cap is?

    Do you stop promoting home ownership as a goal?


    FDR created HOLC ... (none / 0) (#7)
    by Robot Porter on Wed Oct 08, 2008 at 10:41:41 AM EST
    and it worked.

    Why search for other plans, when we have one that we know works.


    Times have changed (none / 0) (#9)
    by samtaylor2 on Wed Oct 08, 2008 at 10:57:20 AM EST
    I don't think it makes sense to just adopt something because it worked in the past.   Though the effects might be similar, the cause of the Great Depression and now are different.   Does that mean it won't work- I don't know.  It is a valuable exercise, at least in terms of building consenses, to list what the similarities and differences between the 2 disasters.  What worked and what didn't work about the HOLC?

    I am not attacking the plan- I don't know enough about it to attack it, but at the same time I don't know enough about it (other then it sounds good) to agree to giving X billion dollars to some government organization.


    De-regulation and non-regulation (none / 0) (#10)
    by gyrfalcon on Wed Oct 08, 2008 at 11:00:33 AM EST
    are the original sins that led to all of this.

    But there are two related but distinct problems here  that it's important to keep in mind.  The weirdo securities have become toxic because of crashing home prices and mortgage problems.  The government getting in there and shoring up mortgages would eventually solve the problems created by the toxic securities-- but nowhere near fast enough to solve the immediate short-term problem, which is that because of the uncertainty of teh value of those securities, the short-term commercial credit system on which a huge number of businesses and even state and local governments rely to fund operations, has almost entirely frozen up.

    The frozen credit market has to be opened fast, like yesterday, or there will be a terrible cascade of business failures, layoffs, etc., leading to a potentially spectacular overall economic crash like the Great Depression.

    The so-called "bail-out" is a sort of short-circuit of the underlying bad mortgage problem.  It's intended to forestall the above scenario by getting the worst of the toxic securities out of the financial system and into the hands of the government.  Let's hope it gets implemented in time and that it works.

    Your question about HOLC is what gives me the shivers about the idea, although I do think it's necessary.  Just imagine the brigades of bureaucrats it will take to look at every bad mortgage situation, the finances of the home owners, assess the market value of the home and set the terms of the mortgage bailout for each individual.

    At least it would provide government jobs for all those legions of now unemployed mortgage underwriters and brokers, I guess.


    FL Sen. Bill Nelson (none / 0) (#5)
    by ruffian on Wed Oct 08, 2008 at 10:26:49 AM EST
    sent me this today.  I wish everyone talking about a HOLC-like program would call it by name, but I think he is on the right track.

    Thank you for contacting me about the $700 billion to bail out Wall Street. I voted against it because I believed it lacked meaningful relief for homeowners facing foreclosure, and it left taxpayers with the short end of the stick.

    Still, make no mistake: I understand the severity of this financial crisis. The bottom line is that until we stem the record number of home foreclosures, this crisis will continue to worsen.

    That's why I've proposed a three-part plan to address the financial crisis, including help for homeowners.

    First, I'm working on legislation to create new ways for homeowners to refinance their mortgages and stay in their homes. My proposal will require Fannie Mae and Freddie Mac to retool mortgages that they hold on their books. It will also establish a direct loan facility within the Federal government to require lenders and other financial institutions that benefit from the bailout to refinance or modify mortgages in danger of default or foreclosure.

    Second, I am calling for an investigation into the business practices of major credit rating agencies that helped foster the enormous growth of the mortgage-backed securities industry. Investors relied on and trusted in those credit ratings, and the public deserves to know how these rating agencies concluded that such risky investments could receive high credit ratings.

    And finally, we must better regulate all aspects of the financial markets. Today's financial crisis results from years of inadequate oversight that has been far too tolerant of excessive risk taking.

    Meantime, I'll continue to press Congress to act quickly to keep people in their homes and put our economy back on track.

    Bold progressives (none / 0) (#8)
    by Steve M on Wed Oct 08, 2008 at 10:43:10 AM EST
    decided to wait until "2009 and beyond" for a reason.  Not that it's a reason we all have to agree with.