The approach to “the housing crisis” favored by Congresswoman Carol Shea-Porter [D, NH CD 1] is a good example of the bad kinds of “helping” that characterize votes in Congress. Why? Because it is….
Þ A knee-jerk reaction rather than a deliberative response;
Þ Wasteful in overspending and so further increasing our ballooning federal deficit; and
Þ Insufficiently targeted to areas and people of greatest need.
By contrast, Independent Candidate for Congress to represent New Hampshire’s 1st Congressional District (NH CD 1), Economist Dr. Peter Bearse, advocates a very different, much more flexible, less costly and targeted approach that would help people and communities work through affects of the economic recession in a variety of ways, through….
v General revenue sharing and capital investment/development assistance to local authorities to be used for local needs according to local discretion, without any strings attached;
v Targeted assistance to carefully targeted national groups in need, also passed down through appropriate state and local authorities;
A major incentive in Congress, especially among House members running for re-election, is to spend, spend, spend, and to do so in ways designed to maximally spread the goodies around – so that every district and every interest group gets some. So, the “American Housing Rescue and Foreclosure Prevention Act,” which Rep. Shea-Porter voted for, “provides $15 billion in loans and grants to states so they can purchase foreclosed homes…” There are three things wrong with this approach, namely that it…
1) Ignores data that shows that state “home foreclosure rankings” vary over an incredibly broad range, of 500 to 1, from Nevada at the highest [3.376% of total households] to South Dakota at the lowest [0.007%]. Data source: RealtyTrac, Inc. via AARP’s “State News.”
2) Relies on liberally pessimistic data and fears that discount the ability of private markets to help solve the problem. The NH ranking is only 0.212% -- in the bottom quarter among states. Rep. Shea-Porter relies on a Pew Charitable Trust estimate that about 2% (“1 in 49) NH families “will face foreclosure during the next two years” – 10 times the current figure!
3) Also discounts local initiative such as that already displayed in Boston to deal with what Rep. Shea-Porter calls the potential “ripple effects” for foreclosures. Like most factors in real-estate, a business that thrives or fails on “location, location, location”, these are very location-specific - on a neighborhood level even within localities. Thus, the typical liberal-democratic approach put on display by Rep. Shea-Porter’s actions – to assume that the solution to virtually every “national” problem lies with the federal government – is even more in-appropriate here.
The latter does not at all deny that there may be focal points of need that require federal action because they represent problems that are the result of federal action or inaction. Foreclosures faced by NH National Guard veterans of the war in Iraq are one such group. They have been sent to Iraq because of decisions in Washington. Many of their families have had to struggle with significant losses of family income, especially due to extended tours of duty. Thus, some of these are facing foreclosure due to inability to pay mortgages, notwithstanding their other sacrifices. It is amazing, especially in light of Rep. Shea-Porter’s posturing on veteran’s affairs and military matters, that she has not recognized this problem and taken steps to address it before advertising her voting on the “Housing Rescue” bill.
Thus, Rep. Shea-Porter’s vote on “the housing crisis,” like her vote on the “economic stimulus” package, is a vote for initiatives that do more to support the reelection of congressional incumbents than to directly address important issues.
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TO THE EDITOR: I have just learned that the vote to authorize the $15
billion noted in our recent release on "The Housing Crisis" was done via
Congressional approval of the Neighborhood Stabilization Act of 2008 (Vote
Passed (239-188, 6 Not Voting), NOT, as reported by Rep. Shea-Porter's
office, as part of the American Housing Rescue and Foreclosure Prevention
PETER BEARSE, Ph.D.