Obama’s Speech on the Economy

Full Transcript Here



Mr. Obama has endorsed the best idea currently on the table to prevent foreclosure: amending the law so that troubled borrowers can have their mortgages modified in bankruptcy court. That would give lenders a big incentive to work with borrowers — reducing interest or lowering principal balances — before they opted for bankruptcy protection.

Mrs. Clinton has not endorsed bankruptcy reform. She has called for $30 billion in federal funds to bolster state and local foreclosure-prevention efforts and has proposed a 90-day moratorium on foreclosures and a rate freeze on subprime adjustable mortgages. Those measures also could help, but as the crisis has developed, the problem has become less one of resetting interest rates and more one of borrowers owing more than their homes are worth. Bankruptcy reform is a better way to deal with that problem.

... With foreclosures surging, the last thing the nation needs is another government-hosted meeting where mortgage lenders pledge once again to do their utmost to help distressed borrowers stay in their homes — and then go back to the business of foreclosure.

Yet, a meeting and a round of pledges is exactly what Senator John McCain called for on Tuesday, as if the country had not been down that fruitless road already. The real core of his speech was his argument against government action to help dig distressed homeowners — or the country — out of the mortgage mess.

Mr. McCain's talk therapy will not ease, let alone end, the worst foreclosure crisis since the Depression or the financial crisis that has erupted in its wake. But worse yet is what it says about the presumptive Republican nominee's view of the economy and the government's responsibility to protect and help its citizens.