A broad bipartisan coalition supporting a massive foreclosure rescue beat back GOP efforts to gut it, defying a White House veto threat.
Background information:
NO NO NO NO NO YES NO NO YES
We asked our panel:
Should Congress pass the $300 billion housing bailout bill?
Results:
YES 3
NO 9
The Kudlow Caucus Breakdown
Stefan AbramsManaging Partner, Bryden-Abrams Investment Management
This is another boondoggle which will only interfere with the price discovery process that is necessary in order to reach a clearing price for the housing market.
Joe Battipaglia
Market Strategist, Stifel Nicolaus
It is poorly crafted legislation that allows some of the worst actors in the mortgage drama (I.e. Countrywide) to unload bad loans onto U.S.taxpayers.
Jerry BowyerChief Economist, Benchmark Financial Network
Nancy, just adopt a house rule in which any member must recuse himself from the vote if he has personally benefited from Fannie Mae, either through sweetheart deals or through affiliated campaign donations. Then the bill will fail, and finally the market can clear, and we can all find out what these homes really are worth.
Vince FarrellScotsman Capital Management
The markets need to sort the mess out and there will be winners and losers, but the bill will hang over the market as we wait for the law of unintended consequences to rear its ugly head. And it will. This is an election year bill to pander to voters.
Jim LaCampPortfolio Manager, Portfolio Focus, RBC Wealth Management
Co-Host, Opening Bell Radio Show, Biz Radio Network
This would interfere with normal market forces and most Americans don't want it anyway. It’s election year political grandstanding...pure and simple.NO
Art LafferFmr. Reagan Economic Advisor
Chief Investment Officer, Laffer Investments
Absolutely not. This bill is a terrible misallocation of resources. Taxpayers have done nothing whatsoever to deserve to foot the bill for bad loans undertaken by others.YES
Joe LaVorgnaManaging Director, Chief US Economist, Deutsche Bank Securities, Inc.
Anything that Congress can do that even at the margin helps home prices stabilize is a good thing.
Donald L. Luskin Chief Investment Officer, Trend Macrolytics LLC
Yes, and believe me, I swallow hard before ever advocating government intervention in markets.
So long as the refinancing program is voluntary, in this case there may be a role for government to underwrite risk-taking that no one else will undertake.
Steve MooreSr. Economics Writer, The Wall Street Journal Editorial Board
No, this is an oinker. Corporate welfare. The Republicans would be wise on political and policy grounds to vote this down. Also, the multi-million dollar slush fund for left wing groups like Acorn make this bill entirely unacceptable.
James Pethokoukis
Sr. Writer, U.S. News & World Report (Money & Business)
Ah, the irony. A big government solution to a big government-caused problem. Falling prices are not only increasing affordability for new buyers, they are key to creating an environment for working off the huge supply of homes. And that is what is happening. Markets work. This would also set another precedent for government intervention in the economy. First Wall Street, then housing. Tomorrow might be energy and healthcare.
Robert Reich
Former Labor Secretary
Professor of Public Policy, UC Berkeley
The price tag is small relative to what the nation will be paying if we don't help troubled homeowners -- hundreds of thousands of empty houses that reduce housing values around them, further erosion of credit markets, and a prolonged recession.NO
Gary Shilling
A. Gary Shilling & Co. President
With falling house prices, it would only postpone foreclosures if lenders cooperate, and therefore cost tax payers even more money. It would create false hopes since with securitizations and other technical impediments, lenders are unlikely to cooperate in writing down mortgages.