Do candidates fully get subprime woes?

Nancy Marshall-Genzer Mar 26, 2008

Do candidates fully get subprime woes?

Nancy Marshall-Genzer Mar 26, 2008


KAI RYSSDAL: Wall Street’s recent angst has only emphasized the economy’s place at the center of the election debate. Earlier this week Hillary Clinton called on the government to help homeowners more. Yesterday, John McCain warned against too much government action. Today, Barack Obama said McCain doesn’t know what he’s talking about.

We asked Marketplace’s Nancy Marshall-Genzer to look into whether any of them do.

BARACK OBAMA: I want to help keep people in their homes.

HILLARY CLINTON: The government has a number of tools at its disposal.

JOHN MCCAIN: It’s not the duty of government to bail out and reward those who act irresponsibly.

NANCY MARSHALL-GENZER: It’s the talk of the campaign trail, how or whether to help resolve the nation’s mortgage crisis. John McCain said yesterday, the government should only intervene when doing nothing would have “catastrophic effects.” Both Barak Obama and Hillary Clinton have promised billions to prevent foreclosures, but Desmond Lachman, an American Enterprise Institute fellow, says even the $30 billion that Clinton proposed wouldn’t do it, and he says ducking the problem entirely won’t work either.

DESMOND LACHMAN: I don’t think that they’ve grasped the magnitude of the problem and how long lasting it’s going to be.

So, do any of the candidates know what they’re talking about?

LACHMAN:Well that’s always a dangerous question.

University of Texas economist James Galbraith told me the candidates are pretty vague, and that’s because they have no idea what they’d face as president.

JAMES GALBRAITH: A lot of things would have to be negotiated. You’ll get a policy that emerges at the end of the day from a process.

And, they’re a bit shy about making promises. Remember this?

GEORGE BUSH: Read my lips.

Berkeley economist Brad DeLong says the elder President Bush was foolish to promise no new taxes, something he couldn’t deliver.

BRAD DE LONG: Lots of candidates have learned from that.

But that won’t stop the candidates from talking economics anytime soon.

In Washington, I’m Nancy Marshall Genzer for Marketplace

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