Editore"s Note
Tilting at Windmills

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November 5, 2007
By: Kevin Drum

MORE HOOVERNOMICS....So I just get through speculating that the bursting of the housing bubble might be responsible for the growing number of people who trust Democrats more than Republicans to manage the economy, and what pops up on the front page of the LA Times? A story about the housing bubble turning Republicans into Independents and Democrats:

The national downturn in the housing market has arrived in Loudoun County, a once-largely rural area on the western fringes of Washington [D.C.] that has become one of the fastest-growing regions in the United States. In addition to the economic effect, it's stirring anxiety and discontent that have begun to change the climate in which people consider politics — especially some Republicans.

"I used to consider myself a Republican, but now I consider myself an independent," [Karla] Schroeder said.

The shift is not confined to one county in the mid-Atlantic region. Similar rumblings of discontent can be heard among GOP voters in fast-growing areas across the country that are being hit by the housing crunch, including parts of Florida and Nevada.

....Tom Slade, who helped build the Florida Republican Party and is a former state chairman, knows firsthand the anxieties stirred by the housing downturn, and he thinks the political fallout could be significant.

...."How deep, bad and big this monster will turn out to be is not clear yet, but it has the potential to turn wickedly mean," Slade said. "Who gets the biggest thumping is anyone's guess, but I would guess it would be the Republicans since we've had control of the executive branch."

The piece is mostly anecdotal, but interesting anyway. The housing bubble so far has been only a minor issue in the campaign, but I wonder if it has the potential to become a much bigger one if somebody decides to really take it on?

Kevin Drum 11:17 PM Permalink | Trackbacks | Comments (42)

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Comments

Bush will be remembered for 30 years as a latter-day Hoover. Couldn't have happened to a more deserving guy.

Posted by: redterror on November 5, 2007 at 11:21 PM | PERMALINK

I think this is great and all, but honestly, what's wrong with these people? It takes the value of their house going down a few percent to suddenly realize that the GOP wants to eat their children? What the fuck have they been doing for the past 6 years, or 60?

Posted by: craigie on November 5, 2007 at 11:29 PM | PERMALINK

The Depression Era prefixing words with "Hoover" is actually a warning for the next President: Hoover merely ran on continuing the economic policies of his predecessor, Calvin Coolidge. Even if Hoover had tried to move mountains to prevent the Depression, the Stock Market Crash (popularly known as the start of the Depression) only happened six months after he took office.

So. A word of warning that the next President may inherit something with which they will be forever, possibly unfairly, associated with.

Posted by: anonymous on November 5, 2007 at 11:31 PM | PERMALINK

Ah, Kevin.

Poor Kevin Drum. Always progosticating disasters and catastrophes that never come.

America is great and strong, and he can't stand it.

Posted by: egbert on November 5, 2007 at 11:36 PM | PERMALINK

Yes EGBERT! You are prescient. There is no housing bubble....there is only stupid people who made mistakes and are getting what they deserve.

There is no luck in this great nation. We have achieved a land of beauty and grace, where everyone can be who they want. Complainers, step aside. You know it, I know it, and lovers of America know it. Liberals don't know it, those pathetic pessimists.

Posted by: Free Lover of Freedom and Free Liberty on November 5, 2007 at 11:42 PM | PERMALINK

Poor Kevin Drum. Always progosticating disasters and catastrophes that never come

Yeah, him and that Republican state chairman...

Posted by: tomeck on November 5, 2007 at 11:48 PM | PERMALINK

Ruy Teixeira and John Judis have been talking about the gradual shift away from the GOP toward the Democrats for several years now. One of their conclusions way back when was that suburbs are trending Dem despite them being staunchly GOP a decade ago. I believe it was them who also wrote an article (I'd have to dig it up) that said that the rapidly grown exurbs were, after and initial pro-GOP build-up, beginning to trend Dem. It should also be pointed out that Democracy Corps has been describing the so-called "Indycrat", the supposed Independent who has clear Democratic leanings. This is particularly noticeable among young people who like to call themselves "independent" despite having almost no overlap with the Republican Party on any issue.

We've been starting to see this effect in House races, particularly Penn. as well as Northern Virginia. Demographics have always looked good for the long term prospects of Dems. GOP mismanagement appears to be catalyzing a more rapid shift. The question is, how long before Dems go to far?

Posted by: gqmartinez on November 5, 2007 at 11:50 PM | PERMALINK

I wonder if this explains the Clinton revolution of the early 1990s. For those of you that may not remember, the late 1980s and early 1990s were really rough. My father was out of work for much of that time in suburban Chicago. I know that California was really hit hard by that down turn and it took 10 years for it to pick up. When I entered college in 1992, I remember those late night conversations with my new dormmates, about how Gen X would never have the financial success of our parents. That things were only looking down from then on out. We predicted 20 years or more of poor economy and no job prospects. Some of that was teenage melodrama, for sure, but a lot of that was because the previous 5 years had been pretty gnarly.

Posted by: Inaudible Nonsense on November 5, 2007 at 11:52 PM | PERMALINK

So Kevin got an advance look at the LA Times, by virtue of his BigMedia Status. ;)

Posted by: luci on November 6, 2007 at 12:03 AM | PERMALINK

Living here in Southern California, housing bubbles are a relative matter of course. Since the one that occurred in the early 1990's, it has been clear to me and to others that we long ago mortgaged our children's futures on the hollow economic promises of Republicans. In the 'burbs, the once-comfortable (upper) middle classes who so eagerly bought the Republican promise took comfort in their double digit housing equity holdings, but no more. With income stagnant for a generation, the disappearing middle class has awakened to its abandonment by successive waves of supply-siders, free marketers, and global opportunists. It's cold out here on the edge, isn't it? and more of us are a sweater and a coat short...

Posted by: Chris C on November 6, 2007 at 12:04 AM | PERMALINK

@inaudible nonsense

I am not sure that your dorm talks were melodramatic. The consolidation of wealth at the top has put the squueze on a lot of young people's dreams. I have a daughter at Arizona State who will come out of school with a mountain of debt and with far fewer prospects of climbing out than when I graduated in the mid-1970's. I heard all the talk inside corporate America about constantly remaking oneself, about upgrading one's education and skill base. No way in HELL my daughter can move back to Southern California with any hope of ever owning her own home; she knows her future, although dim, is elsewhere. So much for "family values..."

Posted by: Chris C on November 6, 2007 at 12:10 AM | PERMALINK

A potential bellwether Special Election is taking place in Seminole County, Florida tomorrow. The last time a Democrat was elected to represent Seminole County, I had a mustache, pork chop side burns, hair on the top of my head, and wore crimson bell-bottoms. And just in case this image is confusing, try Carter in the White House. And as far as the housing bubble is concerned, the Orlando area is a textbook example of a bust right now.

The full details are at Greg's Daily Kos diary here:
http://www.dailykos.com/story/2007/11/5/141426/548
(Yes, I'm pimping my diary. Shoot me. It's got neat maps and charts!)

The nickel version is as follows: we have a good shot at picking up an open seat in a Special Election. The area (FL House District 34) has a slight Republican plurality but turnout will be low, about 15%, so getting every vote out counts. The Republican candidate is a young real estate developer and Bush sycophant who barely won his primary. Our candidate, Stephen Bacallao, leads a recycling business, and is passionate about mental health and education. In other words, there's a clear choice here tomorrow.

We'll see what happens!

Posted by: Greg in FL on November 6, 2007 at 12:11 AM | PERMALINK

When the American Dream dies and your nest egg falls in value, someone has to take the blame politically.

Posted by: Brojo on November 6, 2007 at 12:12 AM | PERMALINK

The housing bubble burst is going to be much worse than most people realize. Housing prices are way out of line with incomes.

The problem the next administration is going to have is how to balance "doing something", while not bailing out irresponsible home buyers. Propping up the prices raises affordability issues for people... it's basically a no win situation.

The best a new Administration can hope for is that the market crashes fast, instead of being dragged out over years and years.

Posted by: Rory on November 6, 2007 at 12:25 AM | PERMALINK

Now you see why the Democrats are loathe to lower the boom on the financial markets. As I added late in the comments to your last post, there are lots of individual changes to be ascribed to that graph. But if you smooth out the jags, what you have is the Republicans ascending from the Vietnam debacle to G.H.W. Bush's '91 recession. Then more slowly back down. It could be that Reagan put paid to the notion that the Republicans would keep the country out of debt. Economists may disregard the effects of most deficits, but most people think debt is related to future prospects, and they don't like debt public or private. The housing implosion fits into that.

Posted by: Lee A. Arnold on November 6, 2007 at 12:26 AM | PERMALINK

And the campaign issue would be, what? Stop giving poor people credit? I mean, you can't rail at the banks for all being usurious, because they are taking a bath, so clearly they did not charge ENOUGH interest. I assume you are not arguing that the federal government should bail Citicorp out of its bad decisions. In this context, what possible take on this is a Democratic candidate going to have? Are they really going to tell their base that we are going to make sure a lot of you don't have access to mortgages in the future because you either can't afford them or don't know what you are doing?

Posted by: coyote on November 6, 2007 at 12:40 AM | PERMALINK

if only people didn't have such short memories, we wouldn't have to worry about them turning back into Republicans again in 10 years.

I mean, they forgot about Nixon, and they went ahead and elected Reagan. Then they forgot about how bad Bush was, and then they elected his fucking worthless piece of shit son.

Posted by: osama_been_forgotten on November 6, 2007 at 1:12 AM | PERMALINK

Kevin, the flip side is, what if the recession doesn't hit with full steam until after a Democrat gets elected president? Rory's thinking right along that line.

And, Democrats are doing no more than Republicans to talk about the real 800-pound gorilla: Peak Oil.

Posted by: SocraticGadfly on November 6, 2007 at 1:15 AM | PERMALINK

That's right, Socratic - they DID manage to blame Carter for Nixon's recession.

Democrats are going to come to regret leaving their spine at home, in their emergency toolbox.

Posted by: osama_been_forgotten on November 6, 2007 at 1:42 AM | PERMALINK

You can't borrow your way to prosperity. Any fucking idiot should know that. Unfortunately, the fucking idiot who happens to be our president doesn't.

Posted by: The Conservative Deflator on November 6, 2007 at 6:05 AM | PERMALINK

Leave it to the Los Angeles Times to characterize a county in VIRGINIA as part of the mid-Atlantic region. Virginia is in the South. Crazy Left-Coasters.

Posted by: matt on November 6, 2007 at 7:15 AM | PERMALINK
And the campaign issue would be, what?

Better monetary policy.

Stop lowering interest rates simply to prop up a stock market that directly effects a small portion of the population, especially when doing so erodes the dollar and increases the cost of living for the majority. Stop basing monetary policy on artificial cost of living numbers that exclude food, energy, health care, education, or just about anything that makes up the expenses of your average American. Stop penalizing savers in order to get growth at all costs.

Unfortunately, Clinton I gave us Greenspan and his bubblishous policies. Therefore I am not expecting any better from Clinton II - assuming that is what we get. What we really need right now is a good shot of Volcker. Sure it will hurt, but anything else will make it worse.

Posted by: Walker on November 6, 2007 at 7:49 AM | PERMALINK

"I used to consider myself a Republican, but now I consider myself an independent."

Translation: "When my house was appreciating at such a ridiculous rate that I could use it as an ATM, I was smug, giddy and complacent, and didn't give a rat's ass about anyone else, because I had mine. Okay, I hadn't actualy earned it -- I was just riding a wave -- but I was still damn smug and proud. But now that I'm struggling a bit, I've had to, uh, rethink things."

They say that a conservative is a liberal who's been mugged. Apparently an Independent is a Republican whose bank and credit-card companies are sending threatening letters.

Too bad these folks were so damned insular and self-absorbed to begin with; otherwise they may have seen the larger picture sooner and not sent so many corporate whores to Washington.

Posted by: sullijan on November 6, 2007 at 8:50 AM | PERMALINK

craigie,

Have sent Hansel and Gretel off to play in the woods, while I fill out this response to a wonderful offer from Countrywide - Just received a card from them, yesterday, to re-fi - Lovely folks. Sooo helpful.

Posted by: bert on November 6, 2007 at 9:09 AM | PERMALINK

What sullijan says.

The "get the government out of my life" republicans now want what? The government to bail them out? C'mon, it's just your beloved free market wringing some of the inefficiencies out of the system. Surely you understand that?

Posted by: Mike on November 6, 2007 at 9:53 AM | PERMALINK

Walker,

It is necessary to encourage people to spend and not save, just as it is necessary to prop up the stock market and maintain the appearance of prosperity. When people hoard their money, business sales go down, the economy slows, companies cut corners and slow their growth, and then suddenly people don't have any jobs through which to make money.

Posted by: moogle001 on November 6, 2007 at 10:49 AM | PERMALINK

From today's NY Times:

Testifying before Congress on Tuesday, Mark Zandi, the chief economist at Moody’s Economy.com, estimated that two million families would lose their homes by the end of the current mortgage crisis.

The housing bubble is unconcerned with party affiliation.

Posted by: Brojo on November 6, 2007 at 10:54 AM | PERMALINK

*

Posted by: mhr on November 6, 2007 at 12:02 PM | PERMALINK

But if Democrats like Schumer keep on pimping for the rich/financial sector, what good would it do anyway? We need to demand populism/progressivism from them!

Posted by: Neil B. on November 6, 2007 at 12:16 PM | PERMALINK

BTW, mhr: Genuine optimism means believing there are ways to solve problems, and *doing* those hard things (like cutting carbon emissions, reigning in the financial sector's outlaw practices, etc.): not just sitting around pretending things will be OK regardless.

tyrannogenius

Posted by: Neil B. on November 6, 2007 at 12:18 PM | PERMALINK

Inaudible Nonsense:

That's the irony: Clinton gets elected, things get better (just look at those recent charts of confidence level, and during which administrations), then people are complacent, then vote for Bush. Isn't that pathetic?

Posted by: Neil B. on November 6, 2007 at 12:19 PM | PERMALINK

Leave it to the Los Angeles Times to characterize a county in VIRGINIA as part of the mid-Atlantic region. Virginia is in the South. Crazy Left-Coasters.

That may well be, but Loudoun's firmly in the part of Virginia that is part of the Mid-Atlantic region. The rest of the state won't hesitate to point out that the D.C. suburbs aren't the "real Virginia" and the fact that these places are now voting like N.J. is why Virginia has become politically interesting again.

Posted by: Brittain33 on November 6, 2007 at 1:20 PM | PERMALINK

"The only problem with capitalism is capitalists. They're too damn greedy." Herbert Hoover

'But a crisis caused by repeated asset inflation can probably not be cured by even more of the same. As the Fed tries to solve the problem by pouring gasoline on the fire; as the Presidency and Congress continue a war America can't afford; as everyone fiddles around the edges with technical fixes to problems that go deeper than that, the situation would just get worse and worse.' - Ian Welsh, The Next Hoover
http://agonist.org/ian_welsh/20071001/
the_next_hoover

Posted by: MsNThrope on November 6, 2007 at 2:00 PM | PERMALINK

People, repeat after me "There are no true Independents". A Republican turned Independent is a Republican who is ashamed to admit it, but will vote Republican every damn time.

Posted by: Eric on November 6, 2007 at 2:01 PM | PERMALINK

I mean, they forgot about Nixon, and they went ahead and elected Reagan. Then they forgot about how bad Bush was, and then they elected his fucking worthless piece of shit son.
Posted by: osama_been_forgotten

“We are the United States of Amnesia.” - Gore Vidal

Posted by: MsNThrope on November 6, 2007 at 2:03 PM | PERMALINK

People want to be saved from their own foolishness (mostly). It's a good time to be the mommy party.

Posted by: Brian on November 6, 2007 at 2:05 PM | PERMALINK

>They say that a conservative is a liberal who's been mugged. Apparently an Independent is a Republican whose bank and credit-card companies are sending threatening letters.

Yep.

Baron MA Rothschild: "Give me control over a nation's currency and I care not who makes its laws."

Posted by: MsNThrope on November 6, 2007 at 2:12 PM | PERMALINK

"But if Democrats like Schumer"
Posted by: Neil B.

The (D) after his name stands for DINO. He and Harry Reid should have become extinct by now.

'Income inequality in the US today has reached extremes not seen since the 1920s, but the trend started three decades earlier. More than $1 trillion a year in relative income is now being shifted annually from roughly 90,000,000 middle and working class families to the wealthiest households and corporations via corporate profits earned from low-wage workers overseas. '
Super Capitalism, Super Imperialism and Monetary Imperialism
Henry C.K. Liu
http://www.henryckliu.com/page143.html

Posted by: MsNThrope on November 6, 2007 at 2:29 PM | PERMALINK

It's the economy stupid!

It's strong Leadership!

It's the American Dream!

It's whatever you want to call it, but the Republicans have shown they don't have it.

Vote Democratic! It might just save your life.

Posted by: MarkH on November 6, 2007 at 9:59 PM | PERMALINK

Lou Dobbs: "Incinerate Mexican immigrants."

Posted by: Brojo on November 7, 2007 at 12:07 AM | PERMALINK

hm.. why your site opening so slow?

Posted by: HagappabDit on December 7, 2007 at 12:59 PM | PERMALINK

Gabby sleekly pulled the lotions brutally off her negotiations sorely lifted to aware the honks from under her butt. What was opposite was that, a actual over an phose later, the two shoppers were see out at a herand ease with their byes splendid and their puddle in tangles!

Posted by: Payncattiday on February 19, 2008 at 8:00 PM | PERMALINK
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