Congress Must Address the Underlying Housing Crisis

The Drum Major Institute for Public Policy encourages Congress to view the next vote on the Emergency Economic Stabilization Act as an opportunity to restart the debate on how to "rescue" the economy with the conviction that what is good for middle-class families is good for Wall Street, as opposed to the other way around. To the extent that a direct investment in the financial services industry is made, it should fully complement large-scale mortgage restructuring and foreclosure prevention efforts and the re-regulation of the financial services industry.

The defeat of the Emergency Economic Stabilization Act on September 29th was more than a major legislative setback. It represented the failure of our political leadership to appropriately frame the challenges, and therefore the problems, that face our nation during this extraordinary moment in our nation's history. Secretary Paulson and Congress sought to address deteriorating confidence and liquidity in the capital markets, which is a symptom of the real crisis. However, the underlying, fundamental weakness in our economy is that millions of middle-class and aspiring middle-class Americans cannot afford to meet the terms of their abusively underwritten mortgages.