Reason for Optimism

by Jackie Speier

San Mateo Daily Journal

February 26, 2009

Three decades ago, San Francisco’s brilliant satirist Art Hoppe, mounted a tongue-in-cheek campaign, “Somebody for President” with the simple slogan, “Somebody do something!”

This should be inscribed on every government building.

The sorry state of our economy is responsible for 19,000 Americans losing their jobs every day. More than 2.3 million homeowners faced foreclosure proceedings last year, up 81 percent from 2007. And of the 52 million American homeowners with mortgages, more than one quarter (nearly 13.8 million) owe more than their house is now worth.

With an economic scenario like this, I wouldn’t blame you for thinking that anyone feeling optimistic was delusional. But I’m not. (Although, granted, if I were delusional I’d likely be the last to know). 

Why, when the rest of the Chicken Littles are insisting that the sky is falling, do I feel hopeful? Because finally, somebody is doing something. 

Many factors have conspired to lead us where we are today. Foremost is the stubbornness of the Bush administration who, despite evidence to the contrary, steadfastly refused to acknowledge our economy was in trouble.

As late as last summer, months after Bear Stearns needed to be bailed out by the Treasury Department and respected economists on both sides of the political divide were declaring we were in a recession, President Bush assured the nation that “our economy is strong.”

He was backed up by Treasury Secretary Hank Paulson — who soon would draft the Troubled Assets Relief Program (TARP) to inject $700 billion into faltering financial institutions — who said the economy was “as strong as I’ve seen it in any time in my business career.”

Had they acted swiftly and responsibly would our economy still be hurting? Most likely. Would we be in the state we are in now? Definitely not.

For close to four years after the 1929 stock market crash, President Herbert Hoover insisted that the free market would take care of itself. Meanwhile, one quarter of Americans were out of work and “Hooverville” homeless encampments sprouted up across the country. Like today, it took the election of a new president, Franklin Roosevelt, who was bold and courageous enough to act.

The recovery package President Obama signed last week and the foreclosure prevention plan he unveiled days later involve an astronomical amount of money. There is no political advantage to advocating this kind of expenditure and I certainly find no joy in supporting such large commitments of taxpayer dollars, but history has shown us that inaction at times like this is not just irresponsible, but disastrous.

I applaud the president’s decisiveness in addressing the most crucial areas of this crisis — jobs and housing. If Americans aren’t working, all the credit in the world doesn’t mean a thing. Likewise, if families are being kicked out on the street, no government program will be enough to shore up failing communities.

The American Recovery and Reinvestment Act puts people back to work, and helps those with jobs keep them, by pumping money directly into local economies. Infrastructure projects and education spending don’t just provide employment for construction workers and teachers, they boost main street businesses that provide materials for the projects and services to the employees.

The foreclosure prevention plan throws a lifeline to the tens of millions of American homeowners who have seen their property values drop precipitously as a result of the economic downturn. Sure, some of these never should have bought a home in the first place or foolishly took equity from their homes to finance other purchases. I am no more excited about my tax dollars being used to help them out than I am paying for the fire department to extinguish a blaze caused by a careless neighbor. In both cases, though, the decision to provide relief isn’t altruistic but self-preservation. Like the fire on your block threatens your own home if not extinguished, so a neighbor’s foreclosed house will have a devastating effect on your own. Figures that I’ve seen estimates that a single foreclosed home on your block reduces your home value by an average of 9 percent.

By no means are these two programs the end of the story. Likewise, we would be wrong to think this is the president’s problem alone. Congress and the American people have an epic responsibility to make sure that this money is spent wisely. For my part, I will use my position on the House Financial Services Committee to demand accountability and transparency for every cent our government commits to these and future projects.

While we are still far from rounding the corner on this crisis, I take comfort in knowing that, after years of absence, competent management is again minding the store.

Somebody is doing something.

U.S. Rep. Jackie Speier, D-San Mateo, represents California’s 12th District in the U.S. Congress.