Mitt Romney better be happy the Michigan Republican presidential primary is tomorrow. If it was much later, his series of mistatements and gaffes and empty-stadium moments might eventually sink him.

A few days ago Mitch Potter of the Toronto Star heard Romney deliver a stirring tribute to his memories of Detroit’s celebration of the 50th anniversary of the first automobile, and did a little research:

When Mitt Romney regaled a Michigan audience this week with childhood memories of a landmark moment in Detroit history, it was a rare instance of emotional candour.

And, perhaps, an even rarer example of time travel.

Romney recalled he was “probably 4 or something like that” the day of the Golden Jubilee, when three-quarters of a million people gathered to celebrate the 50th anniversary of the American automobile.

“My dad had a job being the grandmaster. They painted Woodward Ave. with gold paint,” Romney told a rapt Tea Party audience in the village of Milford Thursday night, reliving a moment of American industrial glory.

The Golden Jubilee described so vividly by Romney was indeed an epic moment in automotive lore. The parade included one of the last public appearances by an elderly Henry Ford.

And it took place June 1, 1946 — fully nine months before Romney was born.

Yeah, primary day can’t arrive too fast.

An awful lot of politicians, and through them, an awful lot of Americans, have come to belief an awful lot of unfounded assertions and boldface lies about the Affordable Care Act of 2010. Accordingly, MIT economist Jonathan Gruber, an advisor during the development of ACA who was also involved directly in the design of Mitt Romney’s Massachusetts health reform initiative, has decided to provide an EZ guide to myths and realities, via a 152-page comic book on the subject. Here’s a description:

The intent of the new book, Health Care Reform: What It Is, Why It’s Necessary, How It Works, is to explain in simple and clear language the complexities of the Affordable Care Act and what it means for the average person and business owner.

The arguments of critics are acknowledged in the book, and the author aims to present the facts in a clear and balanced way. Judging from glowing reviews by customers on Amazon.com, the book seems largely to have achieved its purpose.

If a comic book on health reform sounds simplistic, consider that it’s an effort to correct such authoritative “sources” as Sarah Palin’s Facebook page. Compared to that, it’s the Summa Theologica.

Below is Gruber’s overview of the book.

Making the conservative rounds today is a column from Francis Cardinal George, the Catholic Archbishop of Chicago, that in the guise of a discussion of Lenten sacrifice, presents the now-familiar argument that the Obama administration is trying to destroy Church-affiliated institutions:

This year, the Catholic Church in the United States is being told she must “give up” her health care institutions, her universities and many of her social service organizations. This is not a voluntary sacrifice. It is the consequence of the already much discussed Department of Health and Human Services regulations now filed and promulgated for implementation beginning Aug. 1 of this year….

What will happen if the HHS regulations are not rescinded? A Catholic institution, so far as I can see right now, will have one of four choices: 1) secularize itself, breaking its connection to the church, her moral and social teachings and the oversight of its ministry by the local bishop. This is a form of theft. It means the church will not be permitted to have an institutional voice in public life. 2) Pay exorbitant annual fines to avoid paying for insurance policies that cover abortifacient drugs, artificial contraception and sterilization. This is not economically sustainable. 3) Sell the institution to a non-Catholic group or to a local government. 4) Close down.

This flat statement is rather odd insofar as several of the most important organizations representing Catholic hospitals, universities and social services agencies have gone out of their way to suggest they can live within the guidelines of the new regulations, particularly if something can be worked out to accomodate Catholic institutional employers that are self-insured (i.e., that are both employers and insurers). After reading Cardinal George’s ukase, I consulted the web page of the Catholic Health Association and saw no news of any impending closures of Catholic hospitals, though CHA does, naturally, suggest it needs to see what the administration is planning for self-insurers before making any final sign-off.

Perhaps acceptance of the administration policy is the contingency Cardinal George is referring to in his Doomsday Option 1 above: “breaking its connection to the church, her moral and social teachings and the oversight of its ministry by the local bishop.” It would appear the real action there would be by the “local bishop,” who would refuse to continue to exercise overight with respect to any Catholic institution that did not join the hierachy’s culture-war against the administration and the provision of contraceptives to employees. In other words, bishops would order Catholic institutions fully willing to continue functioning under the regulations to shut down or treat themselves as “secularized.” It’s pretty clear who the aggressor would be in this sort of action.

In weighing this threat and its gravity it is probably helpful to consider Cardinal George’s general views about the horror with which he considers any dimunition of episcopal power. In 2010, he prophesied:

I expect to die in bed, my successor will die in prison and his successor will die a martyr in the public square.

Like some of the conservative evangelicals who wail each Chrismas season of martyrdom for having to suffer the agony of seeing “Happy Holidays” emblazoned on Department store facades, Cardinal George seems to confuse limitations on his secular power—in this case, the power to prevent insurance companies from offering the option of contraceptives to employees of Church-affiliated but not Church-operated institutions—with active persecution. And he’s threatening to share his terrible suffering with the beneficiaries of Catholic hospitals, colleges and charities.

There’s been a lot of talk—dating back at least to the Iowa Caucus stretch-run—that Ron Paul is doing his devious best to help Mitt Romney destroy his other GOP opponents. There is no question Paul spent a fair amount of money in Iowa helping Mitt demolish Newt Gingrich, though the fact that Paul was chasing Gingrich in the polls in that state made the tactic entirely unmysterious. It’s a bit less obvious why the Paul campaign seems to be doing the same number on Rick Santorum right now.

In any event, Judd Legum of Think Progress has documented an even more thorough-going Mittophilia in Paul’s approach to the GOP candidate debates, in which the ratio of attacks on everybody-but-Mitt and Mitt is a nice round 39-0.

Theories as to why Paul would want to help the most conventional of his opponents range from the pedestrian (it’s the shortest and easiest route for Paul to maintain first-tier candidate status, given Romney’s superior money and Establishment support) to the patriarchal (Ron wants to give Rand a shot at second-place on a ticket with Romney, or at least a seat-at-the-table in a Romney administration). But whatever the rationale, it is pretty clear Ron Paul is not interested in launching Rebel Alliance missiles at the Death Star.

As regular readers have probably noticed, I believe the $64,000 question of contemporary U.S. politics is why one of the two major parties made the historically unusual decision to react to consecutive electoral landslide defeats in 2006 and 2008 by moving rapidly away from the vicinity of the political “center.” My theory has been that this strange phenomenon is probably best explained by the convergence of a long-term trend—the decades-long conquest of the GOP by “movement conservatism”—and a short-term challenge—the need for conservatives to disassociate themselves from the Bush era without repudiating their own ideology.

But my esteemed friend and former colleague Jonathan Chait offered a different, if not entirely inconsistent, theory in an important column at New York published yesterday. Chait’s analysis is that Republicans are deeply aware they are doomed demographically, and are gambling everything on a last-ditch, all-or-nothing, confrontational appeal to White Identity Politics:

If they can claw out a presidential win and hold on to Congress, they will have a glorious two-year window to restore the America they knew and loved, to lock in transformational change, or at least to wrench the status quo so far rightward that it will take Democrats a generation to wrench it back.

Chait and I point to a lot of the same phenomena to chronicle the unlikely and unmistakable nature of the rightward shift in the GOP’s agenda and message after 2008:

Following Obama’s win, all sorts of loose talk concerning the Republican predicament filled the air. How would the party recast itself? Where would it move left, how would it find common ground with Obama, what new constituencies would it court?

The most widely agreed-upon component of any such undertaking was a concerted effort to win back the Hispanic vote. It seemed like a pure political no-brainer, a vital outreach to an exploding electoral segment that could conceivably be weaned from its Democratic leanings, as had previous generations of Irish and Italian immigrants, without altering the party’s general right-wing thrust on other issues. George W. Bush had tried to cobble together a comprehensive immigration-reform policy only to see it collapse underneath a conservative grassroots revolt, and John McCain, who had initially co-sponsored a bill in the Senate, had to withdraw his support for it in his pursuit of the 2008 nomination.

In the wake of his defeat, strategists like Karl Rove and Mike Murphy urged the GOP to abandon its stubborn opposition to reform. Instead, incredibly, the party adopted a more hawkish position, with Republicans in Congress rejecting even quarter-loaf compromises like the Dream Act and state-level officials like Jan Brewer launching new restrictionist crusades. This was, as Thomas Edsall writes in The Age of Austerity, “a major gamble that the GOP can continue to win as a white party despite the growing strength of the minority vote.”

None of this is to say that Republicans ignored the rising tide of younger and browner voters that swamped them at the polls in 2008. Instead they set about keeping as many of them from the polls as possible.

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Here are some flash-fried lucheon nuggets for your delectation:

* Jamelle Bouie looks at two new and sharply divergent presidential general election polls (one from Gallup/USAToday and another from Politico/GWU) and shrugs, which is pretty much my reaction as well.

* New Q-Poll of Ohio shows Santorum maintaining previous 7-point lead over Romney.

* Speaking of the Buckeye State, there was a school shooting today in Chardon Township, in NE Ohio, that left one student dead and four wounded.

* Iranian regime hails Best-Foreign-Film Oscar for “A Separation” as a triumph over Israel, despite director’s denunication of the politicization of cinema and culture.

* Sarah Posner profiles Philadephia archbishop who may well be Rick Santorum’s mentor in his denunciation of JFK’s Houston speech on church-state relations.

* My latest column at TNR explores the unwillingness of Republicans to criticize each other from any direction other than the Right.

More bloggy goodness on the way.

Late-entry fantasists who keep lofting up the names of possible GOP saviors that a “brokered convention” might nominate have a basic problem: most of those names are of pols who have repeatedly said they are not interested, and/or have tangible handicaps that would cause big problems with key segments of the party they are supposed to save. You know: Jeb Bush is a squish on immigration, Chris Christie has mocked Islamophobes, Mitch Daniels has proposed a “truce” on cultural issues, and so on and so forth.

So some scribblers have taken to writing about saviors who haven’t disclaimed interest in a candidacy and whose shortcomings have not already been analyzed, because nobody in his or her right mind would suggest them in the first place. That’s the only appropriate reaction to Adam Winkler’s Daily Beast column floating an extremely flimsy trial balloon for Supreme Court Justice Clarence Thomas.

I won’t go through Winkler’s full argument, which is so fundamentally silly that some readers have suggested it might be a parody. But here’s its real clincher of an “argument:”

Yes, it is hard to believe that Clarence Thomas would ever be the Republican nominee. Then again, most people thought an inexperienced African-American often mistaken for a Muslim could never defeat presumptive nominee Hillary Clinton, much less be elected president.

That depends on your definition of “most people.” Barack Obama was being hailed as a possible future president from the very moment he delivered his famous speech at the 2004 Democratic National Convention—and some people thought so even earlier. And if the unlikelihood of some abstract “type” of a nominee becomes a credential for everyone else who is “unlikely,” then why stop at Clarence Thomas? Why not some county commissioner from North Dakota? Why not a Democrat? That would be a shocker, wouldn’t it?

I think we need a moratorium on all late entry speculation until such time as turnout in Republican primaries drops 70% or at a minimum, Newt Gingrich has negotiated his third return from the dead this cycle and tops national polls once again.

Expectations-management is a familiar part of the political game. But it was raised to a new level today by a “senior advisor” to Rick Santorum:

“We have already won,” Santorum adviser John Brabender told CNN. “No matter what the results are, we’ve won. This is Romney’s home state.”

Now to be fair, there is a plausible strategic theory embedded in Brabender’s anticipatory spin: Team Mitt has had to spend a lot of money in an effort to win two states (MI and AZ) tomorrow that were earlier assumed to be Romney strongholds. This will reduce his firepower going into Super Tuesday. But Brabender does carry the that-which-does-not-kill-us-makes-us-stronger POV to some remarkable lengths:

“We have survived the Romney attack machine,” he said. “Romney and Ron Paul have tried to hurt us jointly, but the polls still show us tight with Romney. We have certainly survived it to a much bigger extent than anybody else has so far.”

The other way to look at it, of course, is that conservative voters have given try-outs to an amazing number of non-Romneys in this cycle, and they keep crashing and burning, sometimes repeatedly.

Carried to its logical conclusion, Brabender’s argument would make all the primary results irrelevant, insofar as Romney has already undershot the repeated elite GOP expectations that he would cruise to the nomination and then to the White House. Problem is: the only beneficiary of that perpetual demonstration of Mitt’s weakness would be Barack Obama.

There’s a new Gallup survey out on the proposed repeal of the Affordable Care Act of 2010 that helps illustrate why the exact numbers on issues that divide partisans are a bit irrelevant. Here’s Gallup’s Jeffrey M. Jones:

Americans divide evenly when asked if they favor (47%) or oppose (44%) a Republican president’s repealing the 2010 healthcare law if elected this November. Republicans overwhelmingly favor repeal (87%) and Democrats overwhelmingly oppose it (77%). However, Republicans hold their views much more intensely than Democrats, with 56% of Republicans strongly favoring repeal and 39% of Democrats strongly opposing it.

Since every single Republican in Congress voted against the legislation, and the GOP presidential candidates have differed only in terms of the vehemence with which they denounce it as a socialist threat to fundamental American freedoms (and/or as quasi-genocidal), it’s a bit beside the point to figure out exactly what percentage of GOP voters favor repeal. It’s not as though there is some “sensible center” among Republican office-holders that “the base” must discipline in order to keep them from tolerating this approach to health reform once supported by quite a lot of GOP leaders and thinkers.

It is germane that self-identified independents oppose repeal by a 47-40 margin. And in the event Republicans do win the White House and/or control of both Houses of Congress, it may well become important to determine whether voters really do support a return to the status quo ante, including the right of insurers to deny coverage to people on grounds of pre-existing conditions (not a popular position among any category of voters in the past). But like a lot of other measurements of “intensity,” the exact percentage of Republican voters favoring their party’s monolithic position on “ObamaCare” isn’t quite the big deal it is often made out to be, unless the question is whether the statute will be publicly burned after it is repealed.

Though it was not an original remark, like Romney’s coziness with NASCAR owners rather than fans, Rick Santorum did double-down on a statement made last fall that reading John F. Kennedy’s famous 1960 Houston speech on church and state made him “want to throw up.” Once again, as Romney appears determined to come across as a sort of cartoon villain from a late nineteenth-century populist tract, Santorum seems locked in a perpetual casting-call for the Da Vinci Code (it doesn’t help that he sent two of his sons to a DC high school closely associated with the shadowy right-wing Catholic group Opus Dei).

It’s not surprising, of course, that Santorum is nauseated by the idea of church-state separation, the Jeffersonian “myth” that undergirds the “secularism” he has ascribed as Barack Obama’s “phony theology,” and as the primary instrument of Satan’s plan for the conquest of the United States. But Rick has certainly got his history wrong here:

Kennedy for the first time articulated the vision saying, ‘No, faith is not allowed in the public square. I will keep it separate.’ Go on and read the speech. ‘I will have nothing to do with faith. I won’t consult with people of faith.’ It was an absolutist doctrine that was abhorrent at the time of 1960.

Uh, sorry, Rick, but far from articulating an “abhorrent” doctrine “for the first time,” JFK was telling his conservative Protestant interrogators in Houston precisely what they wanted to hear. While some conservative Catholics were indeed alarmed by what they perceived as Kennedy’s neo-Americanist heresy, conservative evangelicals in 1960—and particularly Southern Baptists—generally held views on the Establishment Clause that were difficult to distinguish from those of the ACLU.

That’s all radically changed since 1960, but JFK was hardly out of the American mainstream at the time. And despite some clerical horror at his Houston speech, Kennedy’s version of what it meant to be a Catholic politician in the United States certainly did not bother Catholic voters, who supported him at levels approaching 80%. When the liberal Catholic scholar Fr. Andrew Greely suggested in 1967 that JFK should be declared a “Doctor of the Universal Church” for his embodiment of what it meant to be a modern Catholic, he was simply exaggerating a fairly prevalent sentiment among American Catholic lay folk.

I am quite sure that characterization of Kennedy would make Rick Santorum hurl profusely. But it’s a reminder of what makes Santorum’s views on church-state issues, and on all the related “social issues,” so unusual. He is engaged not in a defense of Christian common-sense values against secular-socialist hordes in service to the Father of Lies, but an intra-Christian war in which hyper-traditionalist Catholics and hyper-conservative evangelicals come together to impose their views on believers and unbelievers alike. It’s a strange preoccupation for a professional politician, but then this is a strange year in Republican presidential politics.

As you may have heard, Mitt Romney made a surprise appearance at the (subsequently suspended) Daytona 500 yesterday, and made another one of his patented gaffes that draw attention to his wealth and elite status, as Sarah Boxer of CBS reports:

Mitt Romney went to the Daytona 500 NASCAR race Sunday for what should have been a chance to show he’s one of the guys. Instead, in casual conversation with an Associated Press reporter at the Florida track, he reminded people once again that he is not exactly a regular Joe.

Asked by the AP reporter if he follows NASCAR, Romney responded, “Not as closely as some of the most ardent fans. But I have some great friends who are NASCAR team owners.”

Earlier in the day on Fox News Sunday, Chris Wallace asked Romney how he’d respond to people who say he doesn’t “connect” with regular people, and played him a clip of his boast last week in Michigan that he owned four American cars, two of them Cadillacs. Here’s how Mitt responded:

You know, I can’t be perfect. I just am who I am….

If people think there’s something wrong with being successful in America, then they’d better vote for the other guy. Because I’ve been extraordinarily successful. And I want to use that success and that know-how to help the American people.

Frankly, the Popeye defense (“I am what I am and that all what I am,” the sailor man often said) isn’t a real good one for Mitt Romney, particularly when it is combined with claims that anyone wondering if a guy like him understands what it’s like to experience real economic insecurity.must either be an envious would-be looter or one of those class-warfare socialists. The loud-and-proud I’m-better-than-you posture is also a bit problematic for someone trying to become the presidential nominee of a party that relies heavily on the argument that Barack Obama is an out-of-touch elitist.

But given a wide-open chance by Chris Wallace to “correct a misconception” about himself yesterday, Romney did not address any of this, but instead talked about the misconception that someone representing Massachusetts couldn’t be a teeth-grinding, hippie-hating conservative, so to speak. That’s his message in the primaries, and he’s sticking to it.

Ezra Klein tells us that Hill staffers are starting to call January 1st, 2013 “Taxmageddon” because of the legislated expiration of the Bush tax cuts, the introduction of higher Medicare taxes as part of the Affordable Care Act, and the expiration of the newly-extend payroll tax cut. One interesting wrinkle to Taxmageddon is that it will occur during a Congressional lame-duck session that could very well be in the last month of the Obama administration. This is a little strange, because things would be much simpler if the tax cuts expired a little after the new Congress took their seats, and so the winners of the 2012 elections could simply decide how to split up this giant pot of money bequeathed to them by their successors.

Anyway, very few people think that all the scheduled tax increases will go into effect, and so whoever is in power should be able to work from whatever revenue level they can and then move on from there with the rest of their proposed legislation. What this means is that everything else — major changes in spending and the tax code — should have to wait for a resolution on the revenue side. This puts into stark relief all the wrangling we saw in 2011 over the debt ceiling and spending cuts along with President Obama’s proposed tax reform — and makes it all look a bit silly.

There was always something mildly farcical about Obama going for a grand bargain on taxes and entitlement spending when, if he wins the election and then just vetoes everything that comes out of Congress, a substantial chunk of the near-and-medium term deficit will evaporate. There is something similarly goofy about the White House’s proposed corporate tax reform. It’s strange in a few ways. It combines the basic rate-lowering-and-base-broadening beloved by wonks with new preferences and tax-advantages for domestic manufacturing.

What’s producing this discordance is, I think, a recognition that this corporate tax reform framework is unlikely to be implemented before the 2012 elections, and so will have to wait for a resolution to Taxmageddon.

So, it makes more sense right now to propose some wonky reform and mix it with some stuff that will make for good soundbites on the campaign trail. If you actually wanted to reform the corporate tax code, it would make a lot more sense to do so after there was some sort of legislative consensus on what the upper bound for revenues will be for at least the next four years, and then to go after the entire tax code in a revenue-neutral fashion.

Reforming the corporate tax code on its own makes it more tempting to put in distortionary preferences for particular industries and, even more importantly, makes it tempting to do the reform with the goal of getting more revenue specifically from corporate taxes.

If you start with a revenue level that’s based on the tax rates that will go into effect on January 1, 2013, and then go after everything at once, the result will likely be cleaner and more efficient.

Alec MacGillis has a long piece in the Washington Post defending the politicization of public policy; or at least the idea that it’s appropriate to consider the electoral and political consequences of policy decisions. And while I think he’s right, one point that’s often lost when we talk about this stuff is figuring out which policy questions actually matter the most politically.

No one doubts that a more robust economic recovery would have helped Obama and the Democrats substantially in 2010 and would help them in 2012. And yet, from accounts of policymaking in the Obama administration, we learn that the decision to start talking about the long-term deficit was not entirely made by the economists in the administration. Although Peter Orszag, the now-departed OMB chair, was a true-blue deficit hawk, it was the political team that, in early 2010, wanted to pivot towards austerity. Ryan Lizza’s January New Yorker piece describes their thinking:

After a year of intense policymaking and legislating, Obama’s political advisers were attempting to reassert authority over the economic team. The recommendations were heavy on public relations and attempted to reposition Obama to appear less hostile to the concerns of the anti-government right. “Democratic Presidents rarely address small businesses in their message,” they advised Obama, “but you could use the opportunity to discuss what small businesses mean for the freedom to be your own boss, to pursue your own ideas and for our spirit of innovation.”

Axelrod and other Obama political advisers saw anti-Keynesian rhetoric as a political
necessity. They believed it was better to channel the anti-government winds than to fight them.
…

Obama’s State of the Union speech, his aides said, “was an opportune moment to pivot to themes of restraining government spending.” They advised him to consider “freezing or cutting the discretionary budget,” instituting a senior-level government pay freeze, and cancelling some federal programs. They even noted that his government-reform efforts were “the most dramatic since Reagan’s conservative downsizing.”

So here we have political advisers who are concerned with the political consequences of what the president decides to emphasize and propose. What they got wrong, it seems, it not so much that it’s important to consider the political consequences of an administration’s policy actions, but misunderstanding what drives the president’s political standing. As we’re seeing now, and as we already know, whether or not the macroeconomy and the labor market are perceived as improving has a huge bearing on a president and incumbent popularity and ability to win elections. Not only is effective recovery and stabilization policy clearly the “right” thing to do, it’s also the thing to do even if you’re only concerned with maintaining your standing in the polls and winning reelection.

The best way for the administration to have gotten the politics right, it seems, would have been to listen to their economists. Or at least Christina Romer.

A paper written by four economists released this past Friday,”Housing, Monetary Policy, and the Economy,” has been garnering a fair amount of attention. The entire thing is interesting and makes a strong case that “more than half the underperformance in this recovery” can be attributed to brutal decline in housing and related sectors. One part of the paper deals with monetary policy and how the crash in home values and the tightening of credit standards have impaired the Federal Reserve’s ability to stimulate the economy through lowering interest rates.

Usually, mortgage rates are one of the main channels for the Fed’s interest-rate policy to have an effect on the real economy. Basically, when the Fed lowers rates, mortgage rates come down in turn, and homeowners can refinance at the new lower rates, reducing their mortgage payments and freeing up that money to do other things like spend or invest. And while the Fed has been successful in lowering mortgage rates, there are still millions of homeowners paying above-market mortgage rates because they are underwater and can’t refinance. The authors of the paper describe the problem this way:

We have presented circumstantial evidence consistent with diminished transmission: banks report tighter lending standards; builders report increased difficulty of borrowing; since many homeowners are significantly underwater, they cannot refinance into lower rates. Clearly households will display diminished sensitivity to changes in market interest rates if they simply cannot obtain loans at those rates. Further, in our analysis of cross-state data we presented strong evidence that states with particularly moribund housing markets have performed particularly poorly. Households in these states have not been able to refinance into lower interest rates. This, too, is consistent with the notion that in such states monetary policy has had diminished effect.

This is clearly a huge problem for effective macroeconomic stabilization . And it’s something that’s gotten the attention of Congress, the Fed, and the White House. The Home Affordable Refinance Program, which allows underwater homeowners with mortgages guaranteed by Fannie Mae and Freddie Mac to refinance, has had nearly 1,000,000 successful refinancings, and with reforms to the program, that number should go up a bit faster. New York Fed chair William Dudley has also supported more aggressive action to expand refinancing, as have Democrats in Congress. President Obama put forward a plan to allow underwater homeowners without Fannie and Freddie mortgages to refinance.

The problem is that despite the White House, Congressional Democrats, and the Fed all wanting to get more involved in refinancing and fixing the transmission channel for monetary policy, the best they have been able to do is convince the Federal Housing Finance Administration, which oversees Fannie and Freddie, to agree to reforms of the original HARP program. Congressional Republicans, of course, have been very skeptical of any government-sponsored refinancing efforts supported by Democrats. The FHFA is largely seen as an obstacle to mass refinancing for underwater homeowners. Their primary concern, it seems, is to minimize taxpayer exposure to Fannie and Freddie.

What the housing policy problem reflects more broadly is how difficult the politics of recovery and stabilization have been. Before the Great Recession, it was assumed that the Fed would be able to stabilize the economy through interest rate policy, and if things got really bad, “unconventional” policy measures. But then a housing market collapse touched off a financial crisis and a historically deep recession. But unlike other asset-bubbles whose popping brought about economic hardship, the housing crash (unlike, say, the stock market decline following the tech bubble) actually affected the very means the Fed uses to prevent brutal, sustained downturns in the first place.

And now since the political branches have to get involved in order to fix things, any effort to assist the housing market gets caught up in intensely partisan size-of-government debate which have more-or-less doomed government efforts that would require taxpayer dollars.

These circumstances, it seems, should call into question the institutional set-up we have to deal with monetary policy and responding to economic downturns. They can also illuminate why the recovery has been so slow and uncertain.