Over at Andrew Sullivan's blog, a great example of how the administration is having trouble convincing the public that the new housing plan is a good idea. An irate reader writes in to complain about near $900,000 condos in his city that his family chose not to buy because they knew the mortgage would be too much -- why should we bail out the people who decided to take a risky bet? But clearly, the reader, just like Rick Santelli -- and presumably Sullivan himself -- hasn't read the plan. For starters, as HUD Secretary Donovan noted in his remarks the day of the plan's announcement, the maximum mortgage that the plan applies to is around $700,000, depending on the area of the country. So don't worry, fella, your neighbors' condos aren't up for a rescue! Sullivan indulges himself in a little conservative populism, glad to point the finger at people who cashed out home equity at the expense of responsible home economics. But what does he have to say about the families who took out responsible 30-year fixed-rate mortgages and diligently paid their weekly bills, only to see the housing market crash and wind up losing their equity through no fault of their own -- the prototypical "underwater" mortgage holder this plan is trying to reach. No doubt some people will get help they don't deserve as people in need are reached, but stopping foreclosures will also help stabilize the housing markets. I wonder if the gentleman who wrote to Sullivan complaining about his neighbor's new car will be pleased when he is living next to an abandoned home and his own property value starts dropping -- maybe he'll be the next homeowner underwater. It's very easy for Sullivan to stoke populist anger about hypothetical irresponsibility from where he sits. It's harder, though, to understand a complex plan addressing a serious economic challenge that doesn't have easy answers. I suggest he give it a try. But what about people whose job isn't understanding public policy? That's where the administration hasn't been making its best sell, although Obama's speech on the day of the roll out was quite good. But like the stimulus bill, which initially faced some public opposition but has become nationally popular thanks to diligent salesmanship, this housing plan will require some more explanation to the American people. As Noam Scheiber noted the other day, HUD Secretary Shaun Donovan did a good job explaining the plan to reporters last week. Actually, all three officials present at that briefing -- Donovan, Treasury Secretary Tim Geithner and FDIC Sheila Bair -- worked together really well; look for a column on the three officials later in the week. While Obama sells the budget this week, perhaps Donovan should be doing a public relations tour on the mortgage plan.
-- Tim Fernholz
