Today we saw a fine display of presidential leadership on an economic problem--the kind we would have expected from President Bill Clinton, not President George W. Bush. Yes, the administration is avoiding the "b" word, as in "bailout." And yes, in theory the new mortgage terms for homeowners facing upward resets represent a "voluntary" agreement by their creditors.
But make no mistake: this deal represents a decision by a Republican administration NOT to let the market work its will.
The deal may be justified in the name of protecting the broader economy from a worsening housing crisis at a time when the threat of recession has markedly risen. If it works, it could help the president's woeful approval rating and lighten one more load that the Republican presidential field would rather not carry next year.