But before we get to Iraq, one of the most startling, and perhaps troubling, moments during this debate was the little attention paid to one of the most gripping economic issues erupting on the American landscape — the mortgage lending crisis. Questions about it — even with the expert, Senator Christopher J. Dodd of the Banking Committee, standing right there — seemed an afterthought, tucked in at the end between merit pay for teachers and a query about what epiphanic moment led each of the Democratic candidates to the “broad path’’ that reached the debate stage.
The time allotted to this issue seemed, well, paltry, given the state of small rural farms foreclosed on in the last two decades (a topic that resonates in Iowa), and now the problems facing many homeowners across the country, with the markets roiled by hedge fund investments and lending practices that someone like former Senator John Edwards has railed against (although The Wall Street Journal just chronicled how a big hedge fund in which he invested, Fortress Investments, has a business that foreclosed on homes in the “storm-slammed’’ region of New Orleans). And the answers were, well, almost unprepared, surprisingly, for dealing with the crisis. And it was posed as a “yes-no’’ question?
So here’s the transcript on that issue:
Mr. Stephanopoulos: This is — this is basically a yes-no question. We’ve seem all this turmoil in the markets over the last couple of weeks, caused by the credit crunch and the crisis in the mortgage markets. We saw, on Friday, the Federal Reserve lowered the discount rate for banks. Should they lower rates for everyone else, yes or no?
Senator Clinton: I’m glad they did what they did. But it can’t be just left to a bailout for the banks. We’ve got to figure out how we’re going to figure out people facing foreclosures.
And I think a number of us have recommendations on that, that do not lend themselves to an easy yes or no.
Senator Dodd: Yes, I think it will happen in September. But we also need more liquidity. And they ought to be allowing Fannie and Freddie Mac to put more liquidity in the market. It has seized up. You can’t get a mortgage in America today.
Mr. Edwards: I agree with that. But we also need a home rescue fund for all the millions of Americans who are worried about losing their homes.
Mr. Gravel: All I would say is that there’s no answer to that question. Just follow the money of the people on this dais and you’ll see a response.
….. (Hellooooooooooooo)….
Governor Richardson: This is the Katrina of the mortgage-lending industry. The answer to your question is yes, there has to be more liquidity, more funds in the market. What we need is more transparency between those that are making this business happen.
And what we also need to do is to not appoint officials that are in the industry to regulate that specific industry. The mortgage industry, they’ve become — a lot of them — a bunch of loan sharks.
Senator Biden: The answer is yes. But we need, as the governor says, more transparency, particularly with regard to hedge funds and private equity funds. They are the ones that are causing this thing to go under. And there’s no transparency, no accountability. We don’t know how deep this problem is.
Chris will take care of it in the Banking Committee, and I mean that sincerely.
But we don’t know how deep this problem is. But I think it’s much deeper. It’s almost as deep in terms of dollars, not liability, as the savings and loan crisis.
Senator Obama: We do need more liquidity, but we’re going to have to not only help homeowners who are going to be losing their homes as a consequence of this; we’re going to have to go forward and make sure that we’ve got the kinds of tough regulation when it comes to financial instruments to make sure that people who have saved and are trying to get their own home for the first time are not hoodwinked out of it.
And, unfortunately, the reason that we haven’t had tougher regulation in part goes back to the issue of lobbying. This is where special interests have been driving the agenda. We have not had the kinds of consumer protections that are in place.
And that’s why, when we have this debate about lobbying, we have to remind ourselves it has very real consequences for the people of Iowa and the people around the country.
Congressman Kucinich: The answer is no. The Fed is actually looking at bailing out the creditors. And what we’re looking at is a continuation of the problem and a postponement of the day of reckoning.
We need to have a government take strong action where we’ll loan money to those who are in trouble. But we need to do that in exchange for having the power, the money-lending power that the banks have right now, come back to the government; government spends money into circulation; and then government can maintain control over the economy.
Unless we take this action, we’re looking at a situation of the collapse of our economy, and we’re looking at a situation where these hedge funds will try to get a bailout while millions of Americans lose their homes. Save the American homeowners.
That’s it, folks. That’s all they had to say, from America’s heartland, where home ownership, where farm ownership, is all about this land is my land. But you can bet, as this situation unfolds, that not only will the candidates learn how to pronounce “liquidity,’’ they will be offering far more succinct, and emotion-laden, plans. (And there was no mention today, not once, of the tragedy at the Utah mine.)
Who gave the best answer in your opinion? I thought the lower tier answers were much clearer and on point than those of the upper tier.