Prodded in part by some of the nation's biggest banks, the Bush administration and Congress are considering costly new proposals for the government to rescue hundreds of thousands of homeowners whose mortgages are higher than the value of their houses.
Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater. That is more than double the percentage just a year ago, according to a new estimate of the damage by Moody's Economy.com.
Administration officials say they still oppose any taxpayer bailout for either people who borrowed more than they could afford or banks that made foolish loans during the height of the speculative bubble in housing.
But with the current efforts to arrest the housing collapse so far bearing little fruit, Washington is being forced to explore new ideas, among them the idea of a federal mortgage guarantee for troubled borrowers.
We had all better hope that the descent into snide is not a reverse indicator, welcoming us to hard times with ad campaigns based on a hardening spirit, a lack of tolerance and an egocentric meanness that characterizes so much of today's advertising. Ultimately, historians will look at TV advertising as an original art form, one that, for better or worse, helped shape the modern American mind. This being the case, it behooves marketing professionals to understand the difference between subtle irony and idiot snideness and aim for an advertising denominator cognizant of the maxim that expansive, confident consumers part with their cash far more readily than do angry, fearful ones.
In the centre of Xi'an, the ancient Chinese capital, there is a gleaming concrete and glass Starbucks. Although a caramel macchiato costs more than a slap-up lunch for four in any of the city’s traditional cafes, this has not stopped it from doing brisk business.-- TAYLOR CLARK
[Peter] Schiff's Chicken Little take on the
economy -- that it is on the brink of collapse -- isn't new. He's been serving up the same spiel for a decade. But these days he's getting more applause than eye-rolling from jittery investors. He's also getting a lot of attention from financial media outlets, in part because he has mastered the delivery of three-alarm sound bites. ("The consumer is in great trouble!" "Things are worse than in the 1970s!") U.S.
Schiff perfected his rant in stock newsletters in the late 1990s, when few investors had heard of him or Euro Pacific. He posted commentaries on his Web site and started sending them to CNBC. His first big media hit came in April 2005, when CNBC asked him to appear on Squawk Box. Schiff faced a hostile panel when he said the dollar would lose half its value -- which still hasn't happened. That first interview ended with the host, Mark Haines, saying: "I don't know whether to shoot him or shoot myself."-- MICHAEL MAIELLO
If the next president is a Republican, he will be captive to the doctrine that tax cuts are the answer to all problems, and therefore won’t seek an effective response to the economy’s troubles.
And even if the next president is a Democrat, any serious stimulus plan would face intense, ideologically motivated opposition in Congress. Will the next president be prepared to fight for an effective plan? Or will we end up with a compromise like the one Congressional Democrats agreed to this year, legislation that assuages conservative objections at the cost of undermining the plan's effectiveness?
Until recently, I thought the biggest political struggle facing the next president was likely to be over health care reform. But right now it looks as if the first thing on the next administration’s plate will have to be dealing with a weak economy.
And if effective action isn’t forthcoming, the next president will suffer the fate of Jimmy Carter, who began his administration with words of uplift — "Let us create together a new national spirit of unity and trust" — and ended up delivering America into the hands of the hard right.
-- PAUL KRUGMAN