Read on Twitter
In 2012 when I was interning at CAP the housing finance group was worried that it was too ambitious to even suggest mortgage cramdown and THEY LITERALLY JUST DID IT https://twitter.com/matthewstoller/status/1341112094079512579
Cramdown is a policy specifically meant to deal with negative equity!!! Home values are skyrocketing!!! It’s a policy purpose-built for the wrong crisis
When I was interning at CAP we couldn’t even advocate for cutting back the Mortgage Interest Deduction... it was too radical. Nonprofit funders wouldn’t like it. They literally just killed it in the TCJA. With cramdown, the levels of disillusionment I’m feeling, Staggering
*funders wouldn’t like it & neera wouldn’t like it*. God forbid we even suggest good policy because the Clinton and Obama people might not like it
Getting hopping mad about how Obama straight up lied about supporting cramdown
And of course on the ‘facts’ they were just straight up wrong. Assholes like Santelli were hooting and hollering about strategic defaults and it turns out that those are basically irrelevant. To see that all someone had to do was merge 2 datasets https://cpb-us-w2.wpmucdn.com/voices.uchicago.edu/dist/b/1275/files/2020/07/Ganong_Noel_Strategic_July_2020-1.pdf
And the other argument that bank lobbyists/CEOs cried about was that they’d have to raise interest rates to compensate for cramdown risk. Well, rates are lower than they’ve ever been in US, who knows maybe world history. I guess one of us econos will have to write a paper on this
Screenshots from a *2011* article about how cramdown could still save the housing market and avert a double dip recession or historically slow recovery, also referencing what to do about Fannie and Freddie which who knows maybe this covid bill did that too https://www.thenation.com/article/archive/why-mortgage-cramdown-bill-still-best-bet-save-economy/
Same dynamic seems to play out in think-tanks, whole centers and departments exist to get foundation grants, and they write about and advocate for policies that foundations want https://twitter.com/mattyglesias/status/1345836796043735044
