And Deuteronomy 15:1-2 instructs: "At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lord's release has been proclaimed."
More famously, in the New Testament, there's the Lord's Prayer, exhorting us to "forgive us our debts, as we also have forgiven our debtors."
So, contrary to the tone being taken by most god-fearing GOP presidential candidates, the idea that our reaction to those who are suffering the effects of this crisis should be less punitive and more empathetic is not some hippy-dippy idea being brought back from the 1960s by Occupy Wall Street.
And, make no mistake, the government can do something about the crisis. In September, David Brooks wrote about the "absurd" idea of government many Americans have, that it "has the power to protect them from the consequences of their sins."
Their sins? Really? Brooks' argument was ably swatted down by Matt Yglesias:
"That something along these lines has become something like the conventional wisdom in Washington is, to me, maddening. Here's a story about bus drivers in Clark County, Nevada getting laid off as a result of state/local budget woes. Are those soon-to-be-unemployed bus drivers really suffering for their sins? Is it really true that a federal government currently able to borrow money at a negative real interest rate can't do anything to protect them? The amazing thing about this crisis is the extent to which suffering and responsibility are completely out of proportion with one another."
Having the power to protect people and exercising that power are, of course, two very different things. Instead of Robert F. Kennedy's idea of dreaming of things that never were, and asking why not, we now have an administration that will, at the drop of a hat, list the reasons why not: Greece, China, the tsunami, the Republicans, the Blue Dog Democrats, etc., etc.
I'm not discounting those obstacles -- especially not the obstacle of an opposition party that has essentially become untethered from reality. But even without a congressional consensus, there is a great deal the White House can do to help struggling Americans -- especially those threatened with foreclosure. As Robert Kuttner put it: "Under the Dodd-Frank Act, they have a huge amount of executive power to press banks to give relief to people with underwater mortgages."
Though it's taken a long and very costly amount of time, the White House finally unrolled its "we can't wait" campaign on the president's swing through western states, announcing a series of unilateral measures designed to go around Congressional roadblocks. "I'm here to say to all of you," declared the president, "that we can't wait for an increasingly dysfunctional Congress to do its job. Where they won't act, I will."
He then announced a change to the Home Affordable Refinance Program that would help more people refinance their home loans. But, although welcome, the tweak is not enough to deal with the magnitude of the problem we're facing. When HARP began in 2009, the goal was to save up to 5 million people from foreclosure. To date, it's helped less than 900,000. And the eligibility bar for taking advantage of the new rules is still set much too high. "In terms of its impact on the economy or the housing market, I don't think it will be very noticeable," said Dean Baker of the Center for Economic and Policy Research in Washington.
But as John Geanakoplos has been saying again and again for the last three years, there will be no solution to the mortgage crisis unless we are willing to deal with principal, not just with interest. Yet, the regulator in charge of Fannie Mae and Freddie Mac, which control and guarantee more than 70 percent of U.S. mortgages, remains opposed to allowing underwater homeowners to reduce the principal on their loan -- even as more banks and private mortgage insurers are allowing some measure of debt forgiveness. And although taxpayers have forked over $141 billion to bail out Fannie and Freddie, the White House claims it lacks the ability to force the mortgage firms to do the same.
So the question remains: will the president's new initiatives make a real difference -- or will they be just another marker that allows the White House to be caught trying?
The growing punitive tone of our national debate is not only inhumane, it undermines what needs to be done to turn around the economy for the sake of everyone -- including the 1 percent.
As we head into the thick of the 2012 race, let's be mindful of the chasm between truly trying to make things better and just trying to be caught trying.
Cross-posted from Huffington Post(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
