Obama's Economist
David Leonhardt's column in The New York Times today talks about some of the economists advising presidential campaigns.
One of the interesting sounding characters in the article was Austan Goolsbee, who is purportedly advising Sen. Obama. And it turns out he IS interesting and for an economist advising a Democratic presidential candidate, well he has published some very interesting market-oriented articles in the popular press.
On the uproar about innovative mortgages, he sensibly observes in a recent New York Times column "Congress is contemplating a serious tightening of regulations to make the new forms of lending more difficult. New research from some of the leading housing economists in the country, however, examines the long history of mortgage market innovations and suggests that regulators should be mindful of the potential downside in tightening too much."
The reasons?
"[T]he historical evidence suggests that cracking down on new mortgages may hit exactly the wrong people. As Professor Rosen explains, 'The main thing that innovations in the mortgage market have done over the past 30 years is to let in the excluded: the young, the discriminated against, the people without a lot of money in the bank to use for a down payment.' It has allowed them access to mortgages whereas lenders would have once just turned them away." And, notes Goolsbee, the innovative lenders have done a fair job at deciding who should get the money.
He also wrote an interesting column about something I've thought about -- the tax risk behind 401(k) investments, which is why I've counseled my wife not to put too much in them.
And the penny? In today's Times column, he says get rid of the nickel, which costs more to make than it is worth. Then since people like pennies, decree they are worth 5 cents.
Hopefully his innovative thinking will get reflected in Sen. Obama's proposals in the coming months. There has been little in his voting record to date to make people think he will offer anything other than the standard liberal line.
Maybe Sen. Obama will take JFK's approach that a "rising tide lifts all boats." We can have the audacity to hope just that.
Posted at David Keating at 1:51 PM | TrackBack
