Politicians are looking into all sorts of ideas for channeling aid to distressed homeowners. All of these plans however give aid and succor to those who’ve made bad decisions.
America already does more to enable mortgages than any other country in the world. Politicians want to do more.
Pols are looking back at Great Depression programs.
Foreclosures have spread way beyond subprime loans.
With no signs of immediate recovery for the economy, it is time to do more to strengthen the beleaguered housing market at the heart of the crisis, according to speakers Thursday at a conference called “The Mortgage Meltdown, Financial Markets and the Economy,” jointly sponsored by UC Berkeley and UCLA.
“We have a long way to go before the credit crunch shows significant healing, and for that reason I think it is worth considering other types of policies to address the crisis,” said Janet Yellen, CEO of the Federal Reserve Bank of San Francisco, addressing about 200 financial professionals, professors and students at UC Berkeley’s Alumni House on the first day of the two-day conference.
Federal Reserve Chairman Ben Bernanke will address the gathering via satellite today. Speaking on a day when reports showed that the nation’s economic output had shrunk by 0.3 percent in the third quarter, Yellen said the current quarter may be even worse. “It appears likely the economy is contracting significantly” in the fourth quarter, she said. She also said the central bank might cut its benchmark rate for overnight bank loans even lower than the current 1 percent but would not reduce it as low as zero.
“The effects of the growing credit crunch have outpaced the easing of policy,” she said.