The Clinton campaign’s offer of the VP slot to Obama is clever politics. Bill pressed the idea more explicitly than before over the weekend, saying that the ticket would be “almost unstoppable“. The idea gels nicely with the Clinton’s argument that Obama is inexperienced: here is his chance for some on-the-job training as number three in the Clinton White House. In due course, they are saying, he might be a pretty good candidate for president.
Best of all, from a tactical point of view, it affirms the idea that Hillary is winning the race — implying there is nothing odd about her offering the VP place to the man who just happens to have the most delegates at the moment, and still will after Pennsylvania. The press mostly went along with this imposture — and so, in a way, did the Obama campaign. Instead of rejecting the overture out of hand, they said that such talk was “premature”. That was a mistake. If I were Obama, I’d be saying that the question of accepting the VP slot on Hillary’s ticket will never arise; if it did I wouldn’t accept it; and that there are no circumstances in which I’d offer her the VP slot on my ticket. (Isn’t it telling that Hillary doesn’t even need to say she’d reject such an offer from Obama?) Even to signal the possibility that he might come around to this idea looks weak.
Good. This is more like it.
Months into the subprime meltdown, economists and policymakers in the US seem no closer to agreement about what, if anything, to do. Last week Hank Paulson, Treasury secretary, and Ben Bernanke, Federal Reserve chairman, were at odds over how to stem mortgage foreclosures. Mr Bernanke called on banks to be more willing to reduce principal. Mr Paulson said voluntary adjustments to mortgage rates and payment schedules were working.
For the moment, both men are merely exhorting – moral suasion, it used to be called. Mr Bernanke is not yet proposing that banks should be compelled to write down loans, and Mr Paulson notes that voluntary writedowns are among the options his “Hope Now” alliance of mortgage lenders and servicers can choose if they wish. Still, the tone of their comments was different. Whether he means to or not, Mr Bernanke continues to signal mounting alarm at the economy’s prospects.
As well he might. February saw the biggest drop in non-farm payrolls for five years – 65,000, more than twice what the market expected. In the fourth quarter of 2007, more than 2 per cent of the country’s 46m mortgages were in foreclosure, and nearly 6 per cent past due date – both sharply higher than a year ago. For subprime mortgages, the numbers were 13 per cent in foreclosure and 20 per cent past due. House prices have much further to fall – maybe another 20 per cent, analysts say. That will drive many more borrowers into negative equity and force the pace of foreclosures still higher.
Continue reading “Column: In the grip of implacable subprime forces”